The Delaware sales tax rate is 0%, and no county or city in the state can add a local sales tax on top. The price on the tag is the price at the register for ordinary goods. Delaware still raises revenue from commerce through a gross receipts tax on businesses, a document fee on vehicle purchases, a realty transfer tax on real estate, a 15% tax on recreational marijuana, and targeted excise taxes on lodging, alcohol, tobacco, and fuel.1Delaware Division of Revenue. Doing Business in Delaware
Zero Sales Tax, No Use Tax
Delaware law prevents every level of government in the state from charging a sales tax on goods or services. That covers all three counties (New Castle, Kent, and Sussex) and every city and town inside them. Clothing, electronics, furniture, groceries, restaurant meals — none of it carries a sales tax line.
There’s also no companion use tax. Most states pair their sales tax with a use tax to catch out-of-state and online purchases that slipped past the register. Delaware has nothing to back up, so an item ordered online and shipped to a Delaware address carries no state tax from Delaware’s side. That’s a big part of why shoppers from Pennsylvania, Maryland, and New Jersey routinely cross the border for larger purchases; avoiding another state’s 6% to nearly 7% sales tax adds up quickly on appliances, electronics, and furniture.
Why Prices Aren’t Quite Tax-Free
Delaware’s trade-off for a 0% sales tax is a gross receipts tax paid by businesses on their total in-state revenue. You won’t see it on a receipt, and the retailer doesn’t add it at checkout. It’s paid directly to the Division of Revenue by the business, and the cost gets absorbed into retail pricing in the background.2Delaware Division of Revenue. Step 4: Learn About Gross Receipts Taxes From a consumer’s standpoint, though, the no-sales-tax promise holds: nothing is added at the register.
Vehicle Purchases: The Document Fee
Buying a car is the biggest exception to Delaware’s no-tax-at-checkout rule. Instead of a sales tax, the state charges a motor vehicle document fee when you title or register a vehicle. For most purchases it works out to roughly 5.25% of the price.
The schedule runs as follows:
- Under $400: flat $8
- $400 to $500: $13.75
- Above $500: $13.75 plus $5.25 for each additional $100 of purchase price (or fraction thereof), rounded to the nearest dollar
- Mobile homes: same base, but $3.75 per additional $100
A trade-in reduces what you pay. The statute defines purchase price as the gross price minus any trade-in or allowance from the seller, so on a $30,000 car with a $10,000 trade-in, the fee applies to $20,000.3State of Delaware. Dealer FAQ – Division of Motor Vehicles
Several transfers skip the fee entirely, including gifts between spouses, parents and children, grandparents and grandchildren, or siblings; vehicles inherited through a will or estate; qualifying active-duty military transfers with change-of-station orders shown within 90 days; certain lease buyouts after a year of continuous possession; and re-registrations by an owner who previously titled the same vehicle in Delaware.4Delaware Regulations. Vehicle Document Fees
Real Estate: The Realty Transfer Tax
Real estate transactions carry a realty transfer tax that often catches buyers off guard. The state rate is 3% of the property’s value when the local jurisdiction hasn’t enacted its own transfer tax. Most counties and municipalities have adopted the full 1.5% local transfer tax they’re allowed, which drops the state portion to 2.5% and brings the combined total to 4%.5Delaware Code Online. Delaware Code Title 30 Chapter 54 – Realty Transfer Tax
By statute the tax splits evenly between buyer and seller, so each side typically owes 2% in a jurisdiction with the full combined rate. On a $350,000 home that’s $7,000 per party. The contract can set a different split, but even is the legal default. Properties with an actual value under $100 are exempt.
First-Time Homebuyer Reduction
If no person on the deed has ever owned residential real estate before, the buyer’s share of the state transfer tax drops by 0.5% on the first $400,000 of value. On that same $350,000 home, a first-time buyer’s share falls from $7,000 to $5,250. For properties above $400,000 the reduction maxes out at $2,000, and the normal buyer rate applies to the portion above the threshold. The reduction applies only to the buyer; the seller’s share is unchanged. You’ll need to occupy or intend to occupy the home within 90 days of closing, and the settlement attorney files the paperwork with the Division of Revenue.
Recreational Marijuana: 15%
Delaware charges a 15% tax on retail recreational marijuana sales. This is the one product you will see taxed as a line item on a receipt, because the retailer collects it at the point of sale and remits it to the state.6Delaware Code Online. Delaware Code Title 4 Chapter 13 – The Delaware Marijuana Control Act
Medical marijuana cardholders are exempt when they present a valid registry identification card at purchase. Non-marijuana items sold at a cannabis retail store, such as accessories, don’t carry the 15% tax either.7Division of Revenue – State of Delaware. Marijuana Establishments and Retail Tax FAQs
Lodging, Alcohol, Tobacco, and Fuel
A short list of other excise taxes affects residents and visitors directly:
Lodging. Hotels, motels, and tourist homes carry an 8% tax on the room charge for transient stays.8Delaware Code Online. Delaware Code Title 30 Chapter 61 – Lodging Tax Short-term rentals booked through platforms like Airbnb and Vrbo fall under a separate, lower tax of 4.5%, which the booking platform collects and remits.9Division of Revenue – State of Delaware. Short-Term Rental FAQs If you’re comparing beach accommodations, the hotel will carry a higher tax rate than the vacation rental.
Alcohol. Taxed at the wholesale level per gallon: $4.50 for distilled spirits above 25% alcohol by volume and $1.63 for wine.10Delaware Code Online. Delaware Code Title 4 Chapter 5 – Alcoholic Liquors and Marijuana
Cigarettes. $2.10 per pack of 20. Wholesalers pay by affixing stamps, and the cost reaches consumers through retail pricing.11State of Delaware. Cigarette and Tobacco Tax FAQs
Motor fuel. Gasoline is $0.23 per gallon and diesel $0.22 per gallon, among the lowest rates on the East Coast.12Delaware Department of Finance. Motor Fuel Tax