D.C. residents infamously suffer taxation without representation, but congressional Republicans have now ensured that even the taxation part of that second-class reality won’t be easy.
The Senate on Thursday passed a resolution repealing a tax bill approved by the D.C. Council, following a similar vote in the House last week. The measure — which city officials say could lead to chaos for local taxpayers — heads next to President Donald Trump, who has indicated that he will sign it.
The move represents only the fifth time in D.C.’s 50 years of home rule that Congress has repealed a local law, and the first time it has targeted local legislation setting tax policy for the city’s residents.
Late last year, the council passed a law decoupling the city’s tax code from 13 provisions of the federal tax code that were changed by Trump’s One Big Beautiful Bill, the massive tax-cut package approved by Congress. The move stopped some of the tax cuts — those exempting some tips and overtime work from taxation — from applying under the local tax code, which officials said would have cost an estimated $600 million in lost revenue over four years.
Instead, the council repurposed some of that revenue to expand the city’s match for the Earned-Income Tax Credit and to create a new Child Tax Credit, a decision that advocates say could benefit moderate- and low-income residents and families in the city.
The council’s decision to decouple wasn’t an outlier; at least a dozen states have similarly done so, but only in D.C. can Congress overrule such decisions. (Virginia and Maryland are among the states that chose to decouple.)
“The elected representatives of D.C. looked at the big economic challenges… and they decided to shore up the city’s fiscal health and bring down poverty at the same time. Who are you to overrule them?” argued Sen. Ron Wyden (D-Oregon) during a debate on the Republican resolution on Wednesday evening.
But Republicans countered that D.C. lawmakers were denying residents and businesses the benefits of some of Trump’s tax cuts, forcing them to step in.
“Congress is D.C.’s legislative body,” said Sen. Rick Scott (R-Florida). “This means we have a constitutional responsibility to fight for those living here just like any legislature should fight for people living in their state.” (Though unless Scott moves to Florida Avenue, there’s no way for D.C. residents to vote for or against him.)
Still, some uncertainty remained on Thursday as to the fate of the Republican effort to repeal D.C.’s tax bill. Earlier in the day, Council Chairman Phil Mendelson contested whether or not Congress had acted in time, posting a document on the council’s website indicating that the 30-day period that Congress had to repeal the bill had actually ended on Wednesday night — before the Senate voted. (Every bill passed by the council heads to Congress for a 30-day review, or 60 days if it involves changes to the city’s criminal code.)
According to Mendelson’s office, the bill was sent to Congress on December 30, thus kicking off the 30-day review period — which would have ended on February 11. But the bill didn’t appear in the official congressional record until January 7, when some congressional officials say the actual 30-day countdown begins.
The last time this was a point of contention was in 2023, when Mendelson and Republicans feuded over the 30-day congressional review period on a bill allowing non-citizens to vote in local D.C. elections. (The bill became law.) Later that same year, D.C. Attorney General Brian Schwalb sided with Mendelson’s interpretation, arguing that the law “unambiguously” says that the 30-day countdown starts as soon as the council sends a bill over to Capitol Hill.
But as of Thursday afternoon it remained unclear whether D.C. would decline to acknowledge the bill’s repeal — a move that could spark litigation. Sources tell The 51st that part of the hesitation could be coming from D.C. Chief Financial Officer Glen Lee, who has a more practical reality to contend with: the fate of the ongoing tax-filing season.
In repealing the council’s bill, congressional Republicans will likely force Lee to pause tax-filing for residents and businesses — potentially for months — in order to redo tax forms and reissue guidance to tax preparers and services like TurboTax and H&R Block. In a letter to congressional leaders this week, Mayor Muriel Bowser and Mendelson said the Republicans’ move would create “huge administrative challenges” for the city.
For individual taxpayers, it could mean longer waits for refunds they were relying on, says Richard Marea, a D.C.-based attorney, accountant, and tax preparer.
“A lot of people will just be left in limbo for a long time, whether it’s an average resident trying to get a refund, low-income residents who depend on refunds and tax credits to get a payment, or tax preparers who have to sit there and wait and have hundreds of clients who have to wait until everything is updated,” he told The 51st.
As of Wednesday, 42,264 residents had already filed their local tax returns. That includes D.C. resident Larkin, who asked that we not use their last name to protect their privacy. They filed their tax returns on January 31, and are expecting a $500 refund from D.C. “I would be frustrated if I had to pay my tax preparer again,” they said. “It just seems like everything is up in the air.”
That was the same concern echoed by Bowser earlier this week.
“I just can’t even imagine what it’s like to tell thousands of filers, ‘You did what you were supposed to do, but oops, do it again,’” she said. “And for everyone else, ‘We know you’re used to filing in April, but now file two months [later].’”
The D.C. business community raised similar worries in a letter sent to Congress this week, in which organizations including the D.C. Chamber of Commerce, Apartment and Office Building Association, and D.C. Hotel Association warned that “a reversal of decoupling would create chaos in the middle of tax-filing season.”
In the meantime, Lee’s office says tax-filing season remains open and “the Office of Tax and Revenue continues to process returns under current District law.”
