Delaware does not impose a sales or use tax
Delaware is one of five U.S. states that does not impose a state or local sales tax. No sales tax is collected from consumers at the point of sale, and no use tax applies to purchases made outside Delaware and brought into the state for use.
Source: Delaware Division of Revenue — Doing Business in Delaware
Unlike Alaska, which also has no state sales tax but permits local jurisdictions to impose their own, Delaware prohibits sales tax at every level of government. There are no county, municipal, or special-district sales taxes in Delaware.
Source: Delaware Division of Revenue — Doing Business in Delaware
Remote sellers shipping goods to Delaware customers have no obligation to register for, collect, or remit sales tax on those transactions. Delaware has no economic-nexus rule for sales tax because it does not impose a sales tax.
Gross receipts tax is not a sales tax
Delaware does impose a gross receipts tax (GRT) on businesses operating in the state, but GRT is a fundamentally different tax. GRT is levied on the seller's total gross revenues from goods sold or services provided in Delaware, regardless of profitability. It is paid by the business out of its receipts—not collected from customers at checkout.
Source: Delaware Division of Revenue — Step 4: Gross Receipts Taxes
GRT rates range from 0.0945% to 1.9914% (or as high as 2.4218% on petroleum products), depending on business activity. The tax applies to businesses with physical nexus in Delaware—such as an office, employees, inventory, or a warehouse. Purely remote sellers with no physical presence in the state are generally not subject to GRT.
Source: Delaware Division of Revenue — Step 4: Gross Receipts Taxes
The Delaware Code provisions governing business licenses and gross receipts taxes are found in Title 30, Chapters 21, 23, 25, 27, and 29.
Source: Delaware Division of Revenue — Doing Business in Delaware
Use tax on leases of tangible personal property
Delaware imposes a 1.9914% use tax on lessees for the use of leased tangible personal property within the state. The tax is collected and remitted by the lessor. Exemptions apply to motor vehicles, household furniture and furnishings, hospital and medical equipment, and certain agricultural equipment.
Statutory rate
30 Del. C. § 4302(a) imposes the use tax at a rate equal to 1.9914% of the rent under a lease of tangible personal property (other than the enumerated exempt categories). Subsection (b) imposes the same 1.9914% rate on leases of motor vehicles. Although motor vehicles are subject to the tax, they are reported separately from other tangible personal property.
Source: 30 Del. C. § 4302
Agricultural equipment and other exemptions
30 Del. C. § 4302(c) exempts from the use tax rents on leases of equipment, machinery, fixtures, buildings, and nonregistered vehicles used in the business of raising crops or animals in agricultural production, as well as reusable pallets and containers for use by food processors. A reusable pallet or container is defined as any pallet or crate under an arrangement for repeated return to its initial purchaser for long-term reuse. While leases of these exempt items do not generate a lessee use tax collection obligation, the lessor's gross receipts from such leases remain subject to Delaware's lessor gross receipts tax.
Source: 30 Del. C. § 4302
Nature of the tax
This narrow lease tax is Delaware's only use tax; the state does not impose a general use tax on purchases of tangible personal property made outside Delaware and brought into the state for use. The lessee use tax is imposed on the lessee but collected and remitted by the lessor as trustee for the state. The lessor is personally liable for the tax imposed, collected, or required to be collected.
Source: 30 Del. C. §§ 4302, 4303, 4304
Note on Division of Revenue guidance
The Delaware Division of Revenue publication "Tax Tips for Lessors of Tangible Personal Property" contains an internal inconsistency: one section states the lease tax rate as "1.92 percent (0.0192)," while another section of the same document correctly states the rate as "1.9914%." The statutory rate of 1.9914% under 30 Del. C. § 4302 is controlling.
Who must pay Delaware's gross receipts tax
Businesses that engage in business in Delaware by selling goods or providing services in the state are required to pay gross receipts tax. The tax is imposed on the seller, not the consumer, and applies to total receipts without deductions for costs or expenses. Physical presence—such as an office, employees, inventory, or warehouse—creates the obligation. Purely remote sellers with no physical presence in Delaware are generally not subject to gross receipts tax.
Source: Delaware Division of Revenue — Gross Receipts Tax FAQs
Gross receipts tax exclusions reduce taxable receipts
Most businesses subject to Delaware's gross receipts tax may exclude a portion of their receipts before calculating tax. Exclusions are applied monthly or quarterly depending on filing frequency. Retailers, contractors, and most occupational and service businesses may exclude $100,000 per month or $300,000 per quarter. Wholesalers may exclude up to $1,250,000 per month or $3,750,000 per quarter. A business operating through multiple branches or entities with common ownership is entitled to only one exclusion per activity, not one per location.
Source: Delaware Division of Revenue — Gross Receipts Tax FAQs
Gross receipts tax rates by business activity
Delaware's gross receipts tax rates range from 0.0945% to 1.9914% depending on the business activity, with petroleum products taxed at composite rates as high as 2.4218%. General retailers pay 0.7468%, wholesalers pay 0.3983%, restaurants pay 0.6472%, and grocery supermarkets pay 0.3267%. Each business activity has a specific rate established in Title 30, Chapters 20 through 29, and Chapter 43 of the Delaware Code. The Division of Revenue publishes a detailed rate schedule listing all business categories and their corresponding rates.
Source: Delaware Division of Revenue — Detailed List of Licenses and Tax Rates
Gross receipts tax filing frequency and due dates
Delaware businesses subject to gross receipts tax file returns either monthly or quarterly, depending on their gross receipts during a "look-back period." The Division of Revenue determines filing frequency annually by reviewing each taxpayer's historic receipts during the 12-month period between July 1 and June 30 immediately preceding the taxable year. Businesses with higher receipts during the look-back period file monthly; businesses with lower receipts file quarterly. All new businesses are automatically assigned quarterly filing status when they first register.
Monthly filers must file and pay gross receipts tax on or before the 20th day of each month for the receipts of the immediately preceding month. For example, a monthly filer's January receipts are due on or before February 20.
Quarterly filers must file and pay on or before the last day of the first month following the close of the quarter. Quarter 1 (January–March) is due April 30; Quarter 2 (April–June) is due July 31; Quarter 3 (July–September) is due October 31; Quarter 4 (October–December) is due January 31 of the following year.
Source: Delaware Division of Revenue — Gross Receipts Tax FAQs
The look-back period is defined at 30 Del. C. § 2122. The statute provides that the Director may waive quarterly filing for taxpayers with no taxable gross receipts in the quarter, but in no event may a taxpayer file less frequently than annually.
Source: 30 Del. C. § 2122
Mandatory electronic filing
Effective January 1, 2021, Delaware mandates online filing for all gross receipts tax returns through the Delaware Taxpayer Portal at tax.delaware.gov. Taxpayers file and pay electronically using a credit or debit card or bank transfer. To register in the portal, businesses need their Federal Employer Identification Number (or Social Security Number for sole proprietors) and their Delaware Business License Number. The Division of Revenue may permit paper filing only in rare cases involving specific technical or accessibility issues, and such exceptions must be approved by the Division.
Source: Delaware Division of Revenue — Gross Receipts Tax FAQs
Penalties and interest
Returns filed late are subject to a penalty of 5% per month, plus interest of 0.5% per month from the original due date until paid. Additionally, failure to pay (in whole or in part) the tax liability shown on a timely filed return triggers a separate penalty of 1% per month, not to exceed 25%. These penalties are codified at 30 Del. C. §§ 533 and 534.
Source: Delaware Division of Revenue — Gross Receipts Tax FAQs
Gross receipts tax filing-frequency thresholds by business activity
Delaware assigns gross receipts tax filing frequency (quarterly vs. monthly) based on a business’s gross receipts during a statutory lookback period, compared to a threshold that is both set by statute and annually adjusted for inflation.
CY 2026 Inflation-Adjusted Thresholds—Material Change The Delaware Division of Revenue has published the threshold amounts for tax year 2026, reflecting annual inflation adjustments in accordance with 30 Del. C. § 515. For calendar year 2026:
- Retailers, Contractors, Manufacturers (including Automobile and Clean Energy Device), Wholesalers, Food Processors, Occupational, Professional and General Service Providers, Restaurant Retailers, Grocery Supermarket Retailers:
- Quarterly filing: allowed if gross receipts during the lookback period do not exceed $2,007,000.
- Monthly filing: required if lookback period receipts exceed $2,007,000.
- Commercial Feed Dealers and Farm Machinery Dealers (and some specified categories):
- Quarterly filing: allowed up to $4,015,000; monthly required above that.
These thresholds reflect statutory base amounts (typically $1,500,000 or higher, depending on industry) multiplied by the annual threshold adjustment factor based on the CPI-U, as provided by law. Adjusted threshold amounts are published by November 15 prior to each calendar year; the new thresholds are effective for tax periods beginning after December 31 of that year.
Authority & Mechanism
- Baseline threshold statutes: 30 Del. C. § 2301(d)(2) (Retailers), § 2502(c)(2) (Contractors), § 2702(b)(3) (Wholesalers/Manufacturers), § 2902(c)(2) (Services), and sub-categories per Chapter.
- Annual adjustment method: 30 Del. C. § 515 (calculation and publication of CPI-U factor).
- Applied thresholds for specific business activities and subcategories appear in the official annual threshold publication by the Division of Revenue.
Lookback Period and Assignment The lookback period for determining filing frequency is the 12-month period from July 1 through June 30 immediately preceding the taxable year (30 Del. C. § 2122). All new businesses are assigned quarterly filing status until they have a full lookback period. The aggregation and single-exclusion rule for combined business entities continues to apply (see Delaware Division of Revenue FAQs).
Practitioner Note Thresholds change annually; practitioners should consult the official published schedule for the applicable year when determining filing status. The CY 2026 increases are material changes from prior years’ numbers.
Source: 30 Del. C. § 515 Source: Delaware Division of Revenue — 2026 Gross Receipts Tax Thresholds Source: 30 Del. C. § 2122 Source: Delaware Division of Revenue — Gross Receipts Tax FAQs
Registration and license requirements for gross receipts tax
Businesses that become subject to Delaware's gross receipts tax must obtain a Delaware business license from the Division of Revenue before engaging in or carrying on any trade or business in the state. The license is required at the time business commences in Delaware, and the license fee must be paid in conjunction with the registration.
License registration process
Businesses register online through Delaware's One Stop Business Licensing and Registration Service, which allows simultaneous registration with the Division of Revenue and other state and federal entities. The One Stop system generates a temporary business license that may be printed immediately upon completion of the registration. A permanent license certificate is then mailed within 10 working days. Businesses may also obtain a temporary license in person at a Division of Revenue Public Service Office.
Source: Delaware Division of Revenue — Business Licenses FAQs
License fees
The annual license fee for most business activities is $75 for a first location. License fees are set by statute in Title 30, Chapter 23 of the Delaware Code (which enumerates fees by specific business activity classification). The fee is pro-ratable for the first year of activity based on the number of full calendar months remaining in the year. A separate license is required for each separate business activity at a location, and additional locations require additional licenses.
Source: Delaware Division of Revenue — Step 2: Requirements for Delaware Businesses
The statutory fees for specific business classifications are codified in 30 Del. C. § 2301 (occupational licenses), § 2502 (contractors), § 2702 (wholesalers and manufacturers), and related sections.
Source: 30 Del. C. § 2301
License term and renewal
All Delaware business licenses are issued for a term of one year and expire on December 31, regardless of the date of initial issuance. After the first year, businesses may renew for either one year or, at their option, three years. The cost of a three-year license is not discounted; businesses pay three times their regular annual fee.
Source: 30 Del. C. § 2106
The Division of Revenue sends renewal notices annually (or every three years for three-year licenses), but licensees are responsible for renewing by December 31 whether or not they receive a notice. Renewals may be completed online through the Division of Revenue portal at tax.delaware.gov.
Source: Delaware Division of Revenue — Business Licenses FAQs
Statutory licensing requirement
30 Del. C. § 2101 provides: "No person shall engage in or carry on any trade or business for which a license is required by this part without first having obtained a license therefor from the Department of Finance and paid therefor the fee or tax prescribed in this part." The license requirement is separate from and in addition to the obligation to file gross receipts tax returns and remit tax.
Source: 30 Del. C. § 2101
Registration information required
To complete the One Stop registration, businesses must provide their Federal Employer Identification Number (FEIN) or, for sole proprietors with no employees, their Social Security Number. If the business is a corporation, limited liability company, limited partnership, or other entity formed under Delaware law (or a foreign entity authorized to transact business in Delaware), the business must first register with the Delaware Division of Corporations and obtain entity authorization before applying for a business license from the Division of Revenue.
Source: Delaware Division of Revenue — Step 2: Requirements for Delaware Businesses
Temporary physical presence and gross receipts tax nexus
Delaware does not distinguish between temporary and permanent physical presence for gross receipts tax nexus purposes. The Division of Revenue has confirmed that "temporary or permanent presence" of employees or property creates nexus, and Delaware statutes require any person engaging in business in the state to obtain a license before commencing that activity, without regard to duration. Delaware has published no de minimis threshold, minimum-duration requirement, or safe harbor for short-term physical presence.
Statutory licensing requirement
30 Del. C. § 2101 provides: "No person shall engage in or carry on any trade or business for which a license is required by this part without first having obtained a license therefor from the Department of Finance and paid therefor the fee or tax prescribed in this part." The statute does not differentiate between temporary and permanent activity. Any person who "engage[s] in or carry[ies] on" a trade or business in Delaware must obtain a license before beginning that activity.
Source: 30 Del. C. § 2101
Division of Revenue guidance on temporary presence
The Delaware Division of Revenue has explicitly addressed temporary presence in its Vapor Products FAQs. The Division states: "Nexus is created if your company or any of its affiliates maintain a temporary or permanent presence of employees or property (inventory, offices, warehouses) in Delaware." The Division's use of the disjunctive—"temporary or permanent"—indicates that the temporal nature of the presence does not limit nexus. This guidance, while published in the context of vapor product excise tax and business licensing for vapor product dealers, is consistent with the general licensing requirement in 30 Del. C. § 2101 and the Division's broader position that physical presence, not duration or sales volume, determines gross receipts tax nexus.
Source: Delaware Division of Revenue — Vapor Products FAQs
Examples in Division guidance
The Vapor Products FAQ identifies "temporary or permanent presence of employees or property (inventory, offices, warehouses)" as nexus-creating activities. The Division does not enumerate every scenario or provide bright-line rules for what constitutes "engaging in" business for temporary-presence purposes. Businesses uncertain whether a specific temporary activity—such as attending a trade show, performing a short-term installation or service project, or storing inventory on a seasonal basis—creates nexus should consult the Division's Nexus Questionnaire, which allows businesses to submit their fact pattern for a Division determination.
The Division's Business Licenses FAQ advises: "If you are unsure of whether or not you have substantial presence in Delaware to be subject to licensing and taxation, complete and submit our Nexus Questionnaire and the Delaware Division of Revenue will provide guidance." The FAQ uses the term "substantial presence" but does not define it or quantify it. The Vapor Products FAQ's explicit inclusion of "temporary" presence suggests that "substantial" does not impose a temporal floor.
Source: Delaware Division of Revenue — Business Licenses FAQs
No economic nexus for gross receipts tax
Delaware has not adopted an economic nexus standard for gross receipts tax. Purely remote sellers with no physical presence in Delaware are not subject to the tax, regardless of their Delaware-sourced sales volume. Physical presence—temporary or permanent—remains the sole nexus trigger. An out-of-state business with substantial Delaware sales but no employees, property, or other presence in the state has no gross receipts tax obligation. Conversely, a business with even brief physical presence in Delaware during a tax period must evaluate its licensing and gross receipts tax filing obligations for that period.
Retroactive compliance and penalties
Delaware business licenses must be obtained before commencing business in the state. A business that discovers it had physical presence in Delaware during a prior period without a license should register with the Division of Revenue, file any required gross receipts tax returns for the period of nexus, and pay applicable license fees, tax, penalties, and interest. 30 Del. C. § 2119 authorizes fines up to $3,000 and imprisonment up to two years for carrying on a licensed occupation without a license, although the statute does not specify how the Division applies these penalties in practice.
Source: 30 Del. C. § 2119
Historic sales and use tax rate history in Delaware
Delaware has never imposed a state or local sales tax at any point in its history. The Delaware Code contains no provision for a general sales tax or use tax, and statutory bans at the state level prevent counties, municipalities, or special districts from enacting local sales taxes. The Delaware Division of Revenue confirms this absence in its official "Doing Business in Delaware" guidance, explicitly stating that Delaware is one of the few states never to have instituted state or local sales taxes, and that such taxes are prohibited at every level of government.
No session law, statute, or administrative regulation establishing a general sales or use tax is found in the Delaware Code. Delaware's only imposition commonly confused with sales tax is the gross receipts tax (GRT), which is levied on businesses rather than collected from buyers. The only use tax in state law applies narrowly to lessees of tangible personal property (see 30 Del. C. § 4302).
As a result, there is no historic sales or use tax rate table to report for Delaware. Practitioners researching liability, registration obligations, or historic compliance exposure should note that no sales/use tax has ever been in force, and no rate changes for such taxes have occurred.
Source: Delaware Division of Revenue — Doing Business in Delaware
Local sales and use tax prohibition in Delaware
Delaware strictly prohibits the imposition of sales or use tax at both the state and local levels. No city, county, municipality, or special tax district in Delaware may enact or collect a local sales or use tax of any kind. This preemption distinguishes Delaware from certain other states with no statewide sales tax, such as Alaska, which allows local jurisdictions to impose their own local sales taxes.
No home rule or local option for sales and use tax
The Delaware Code contains no home rule or local option provisions allowing counties or municipalities to adopt their own sales or use tax ordinances. All general taxing authority over sales and use of tangible personal property is reserved to the state legislature, and that authority has never been exercised to impose a sales tax at either level. While the Code includes specific authorizations for certain other types of municipal taxes (such as realty transfer tax in Title 22, Chapter 16), it is silent as to sales and use tax, reflecting a legislative intent not to grant this power to local government entities.
Division of Revenue confirmation
The Delaware Division of Revenue directly affirms that, "Delaware is one of five states in the nation that does not impose a state or local sales tax." This statement is made in the Division's "Doing Business in Delaware" publication, which is directed at business taxpayers and individuals researching registration and compliance obligations.
Distinction from neighboring and no-tax peers
Unlike Alaska (where many local governments impose local sales tax despite the absence of a statewide tax), Delaware expressly denies this authority. Practitioners can rely on the Division of Revenue's published positions and the absence of any local option language in the Code as conclusive for compliance and exposure review purposes. There are no local Delaware addresses where a business or consumer will encounter a local sales tax, and no local registration, filing, or remittance requirements relating to sales or use tax apply in Delaware.
Primary source support
While the Division of Revenue's guidance is clear, as of this writing there is no single Delaware Code section that expressly prohibits local sales taxes; the prohibition is established by lack of any statutory authorization and confirmed by DOR guidance. Should future changes to Delaware law grant local tax authority, such developments will be reflected in the Code and in updated Revenue guidance.
Source: Delaware Division of Revenue — Doing Business in Delaware
Remote seller and marketplace facilitator obligations in Delaware
Delaware does not require remote sellers or marketplace facilitators to register for, collect, or remit sales or use tax on sales shipped to Delaware addresses, regardless of sales volume or transaction count. This is because Delaware imposes no sales or use tax at either the state or local level—unlike almost every other state, there is no baseline retail sales tax regime for remote sales to attach to, and thus no economic nexus rule modeled after South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018). As a result, even the largest out-of-state sellers have no sales or use tax exposure or filing requirement of any kind for sales to Delaware customers.
No post-Wayfair economic nexus threshold Delaware never adopted Wayfair-style economic nexus standards for sales or use tax, because it never imposed such a tax on in-state, remote, or marketplace-mediated sales. Statute prohibits local governments from enacting sales or use taxes, and state-level imposition was never created. Delaware Division of Revenue confirms that "remote sellers shipping goods to Delaware customers have no obligation to register for, collect, or remit sales tax on those transactions" and that "Delaware has no economic-nexus rule for sales tax because it does not impose a sales tax."
No marketplace facilitator regime Delaware has not enacted marketplace facilitator legislation for sales tax purposes, as there is no tax to administer. Facilitators (such as Amazon, eBay, or Etsy) are under no Delaware sales or use tax compliance obligation when facilitating sales to Delaware buyers. Marketplace facilitator rules in other states do not apply to Delaware shipments, and there are no add-on Delaware requirements or reporting regimes for such transactions.
Leases, special gross receipts, and related regimes The only Delaware tax regimes that can impact sales into the state pertain to (a) the special lease-use tax on lessees of tangible personal property physically used in Delaware and (b) the Delaware gross receipts tax (GRT) which attaches only if a remote seller has physical presence nexus (see adjacent guide sections). Neither regime creates a Wayfair-style economic or marketplace facilitator threshold or sales/use tax collection trigger for purely remote sellers or facilitators.
For authoritative confirmation, see both Delaware Division of Revenue’s comprehensive business registration and guidance pages and the absence of any enabling statute in the Delaware Code.
Source: Delaware Division of Revenue — Doing Business in Delaware
Use tax on leases involving use inside and outside Delaware; apportionment and out-of-state tax credits
Delaware imposes use tax on the lease of tangible personal property only to the extent of its use within Delaware. Under 30 Del. C. § 4302(a), the use tax applies to "every lessee for the use within this State under a lease of tangible personal property" at a rate of 1.9914% of the rent paid for such use. The statute states that tax is imposed for use "within this State," but does not provide a statutory formula for apportioning rent where the property is used both inside and outside Delaware during the lease term. In the absence of explicit authority for allocation or apportionment, the obligation generally attaches to the portion of rent corresponding to Delaware use, but the statute leaves the details undefined.
Delaware law also contains no provision for a credit or exclusion against lease use tax for sales or use tax paid to another state on the same property. Section 4302 does not address reciprocal credits, out-of-state tax offsets, or mechanisms for preventing double taxation in multistate leasing arrangements. No official Division of Revenue guidance, ruling, or regulation expands the statutory language or prescribes a method for allocating lease payments or recognizing tax paid elsewhere.
Therefore, in multistate leasing scenarios, the use tax is imposed on the rent attributable to the period or proportion of use within Delaware, but there is no published statutory or regulatory method for computing this allocation or for claiming credit for tax paid to another jurisdiction.
Source: 30 Del. C. § 4302(a)
Not yet human confirmed. The absence of apportionment or credit mechanisms is based on the text of the statute and published Division guidance as of 2024-06-22; practitioners should verify if any Division rulings or later guidance add further detail.