In 1938, in their third session, the 75^th Congress first defined the term “trade or business” when used in Title 26, the Internal Revenue Code:

This definition unexpectedly only included “the performance of the functions of a public office” or doing the work of government. This definition of the term for income tax purposes has remained unchanged since 1938 and is now found in 26 U.S.C. § 7701(a)(26).

A few months later in their next session, Congress first defined “trade or business” when used in the Code of the District of Columbia for D.C.-only income taxes.

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This definition, in addition to“the performance of the functions of a public office” or doing the work of government, includes what most people would expect a definition of the term“trade or business” to include: “any trade, business, profession, vocation or calling, or commercial activity”.

This definition has not changed significantly since first written by Congress in 1939. Currently the definition can be found in the Code of the District of Columbia, § 47–1801.04. General definitions: