Why Delaware Has No Sales Tax but Still Taxes Your Revenue

Delaware is known for having a 0% statewide sales tax but don’t mistake that for being tax-free.

While your customers won’t see tax added at checkout, your business may still owe taxes to the state in the form of Gross Receipts Tax (GRT). This tax is based on your total revenue, not profit, and applies whether you're selling goods or services.

In this guide, we’ll break down how Delaware’s tax system works for businesses, what’s taxed, when you're liable, and how to stay compliant, so you’re not caught off guard.

What makes Delaware sales tax different from other states?

In most states, you collect sales tax from customers and pass it on to the government. Delaware takes a different approach.

There’s no statewide sales tax in Delaware, which means you don’t have to collect extra charges at checkout or file sales tax returns. That’s good news for your customers, and simpler in some ways for you.

But instead of sales tax, Delaware imposes a Gross Receipts Tax (GRT). This tax isn’t added to the customer’s bill. It’s something your business pays directly, based on your total revenue. That includes all sales, with no deductions for costs or expenses.

So while you skip the traditional sales tax process, you still have a tax obligation that’s important to understand and manage.

How the Gross Receipts Tax (GRT) works in Delaware?

The Gross Receipts Tax (GRT) is a tax on your business’s total revenue, not your profit. That means you pay tax on all receipts, even if your margins are thin or you're operating at a loss.

Rates vary based on your business activity and can range from 0.0945% to 2.0736%. Each type of business, whether it’s retail, services, manufacturing, or construction, has its own rate category defined by the state.

You’re required to file and pay GRT if your:

  • Monthly gross receipts exceed $6,667, or
  • Annual gross receipts exceed $80,000

Depending on your tax liability, you’ll file monthly or quarterly using the Delaware Division of Revenue’s portal.

One key difference from sales tax: GRT cannot be passed on to customers as a separate line item. It comes directly out of your revenue, so it’s essential to account for it in your pricing and budgeting.

Which products and services count toward gross receipts tax in Delaware?

Delaware may not tax sales at the checkout, but many of the goods and services you sell still count toward your gross receipts.

Whether you're offering digital products, subscriptions, or consulting services, those revenues are all subject to GRT. This includes:

  • Clothing and physical goods
  • Software, SaaS, and other digital tools
  • Professional services like legal, accounting, and consulting
  • Amusement, wellness, and personal care services
  • Construction, repair, and contracting work

Even if your customers aren’t charged tax directly, you’ll still need to include those sales in your GRT filings.

If you operate across multiple categories, you may be subject to different rates so it’s worth reviewing how your business is classified under Delaware’s tax code.

What local taxes might apply in Delaware?

Delaware doesn’t allow cities or counties to impose their own sales tax but that doesn’t mean you’re off the hook for all local taxes.

Some municipalities, like Wilmington, have their own local tax rules that apply to certain business activities or employment situations. For example:

  • Wilmington charges a 1.25% hotel tax
  • Residents working in Wilmington pay a 0.8% wage tax

Here’s quick summary of local taxes in different municipalities in Delaware:-

Municipality County Tax Types & Rates
Wilmington New Castle Wage Tax: 1.25%, Net Profits Tax: 1.25%, Property Tax: $2.115 per $100, Lodging Tax: up to 3%
Newark New Castle Property Tax: $1.0551 per $100, University Student Tax: $50 per student/semester
Rehoboth Beach Sussex Lodging Tax: 3%
Bethany Beach Sussex Lodging Tax: 7%
Dewey Beach Sussex Lodging Tax: 3%
Lewes Sussex Lodging Tax: 5%
Ocean View Sussex Lodging Tax: 5%
Dover Kent Lodging Tax: 3%
Milford Kent/Sussex Lodging Tax: 3%

If you operate in or near a city with additional taxes, it's a good idea to check local ordinances. These taxes are separate from GRT and may have different filing requirements.

Being aware of local rules can help you avoid missed obligations and unexpected penalties.

What triggers tax obligations for your business in Delaware

Even without a sales tax, doing business in Delaware can still create tax responsibilities especially under the Gross Receipts Tax and local rules.

If your business has a physical presence in the state, you likely have what’s called nexus. This means you're required to register, collect, and remit GRT. You may also be subject to local taxes depending on where and how you operate.

Here are common ways you can establish nexus in Delaware:

  • Having an office, warehouse, or storefront
  • Employing staff, agents, or contractors in the state
  • Storing inventory or equipment in a Delaware facility
  • Engaging in ongoing business activities, like regular client visits or installations

If any of these apply, you’ll need to register your business and begin tracking your gross receipts for compliance.

Do you need a sales tax permit or business license in Delaware?

You don’t need a sales tax permit in Delaware because there’s no sales tax to collect. But that doesn’t mean you can skip registration altogether.

Most businesses operating in the state are required to obtain a Delaware Business License from the Division of Revenue. This license:

  • Registers your business with the state
  • Links you to the Gross Receipts Tax system
  • Enables you to file and pay your taxes online

The application process is straightforward and can be completed through the Delaware One Stop portal. Once registered, you’ll receive instructions on how to handle your GRT filings based on your revenue and business type.

If you’re starting operations in Delaware, this license is one of the first steps to staying compliant.

Know the rules so your business stays compliant in Delaware

Delaware may be one of the few states without a sales tax, but that doesn’t mean you can ignore tax rules.

The Gross Receipts Tax plays a central role in Delaware’s tax system, and it affects nearly every business earning revenue in the state. From tracking your income to registering for a business license, staying compliant requires some upfront planning—but it’s manageable with the right tools.

Inkle can help you automate filings, stay on top of deadlines, and avoid costly mistakes. If you're operating in Delaware or planning to expand there, book a demo to see how we make tax compliance simpler.

Frequently Asked Questions

1. Does Delaware really have no sales tax?

Yes. Delaware has a 0% statewide sales tax, so you don’t need to charge customers any tax at the point of sale.

2. Is the Gross Receipts Tax in Delaware the same as sales tax?

No. The Gross Receipts Tax is paid by the business on its total revenue. Sales tax, in contrast, is collected from customers and passed on to the state.

3. What types of businesses owe GRT in Delaware?

Almost all businesses that operate in Delaware and exceed $80,000 in annual receipts are subject to GRT. This includes service providers, retailers, SaaS companies, and contractors.

4. Can I charge customers a “sales tax” to cover GRT?

No. GRT must be paid from your revenue. You can’t pass it on to customers as a separate line item like sales tax.

5. Where do I register for a Delaware business license?

You can register through the Delaware Division of Revenue’s One Stop portal. This is required for most businesses and connects you to the state’s GRT filing system.