There is no sales tax in Delaware. The state is one of only five with no statewide sales tax, and it also bars counties and cities from adding their own, so the price on the tag is the price you pay at the register whether you’re shopping in Wilmington, Dover, or Rehoboth Beach.1Division of Revenue – State of Delaware. Step 4: Learn About Gross Receipts Taxes That said, a handful of specific transactions, overnight stays, vehicle purchases, home sales, and certain products, still carry taxes you should plan for.
Where You Will Still Pay a Tax
Delaware raises revenue in ways that bypass the cash register. Businesses pay a gross receipts tax on their total revenue, which is often built into shelf prices but never shown as a separate charge to you. The costs you will actually see or feel as a consumer come from four places: lodging bills, vehicle paperwork, real estate closings, and the built-in excise taxes on fuel, alcohol, and tobacco.
Lodging Taxes on Hotels and Short-Term Rentals
Overnight stays are the one place a tax line item routinely shows up on a consumer bill. Hotels, motels, and tourist homes charge an 8% public accommodation tax on the room rate under Title 30, Section 6102 of the Delaware Code.2State of Delaware. Tax Tips for Operators of Hotels, Motels and Tourist Homes
Short-term rentals, meaning houses, condos, apartments, and similar residential properties rented for 31 consecutive nights or fewer, are taxed at 4.5% instead of the 8% hotel rate.3Division of Revenue – State of Delaware. Short-Term Rental FAQs Some municipalities tack on their own lodging surcharges on top of the state rate.
The Vehicle Document Fee
Buying a vehicle in Delaware triggers a document fee that works much like a sales tax even though it isn’t called one. The rate is 5.25% of the purchase price or the NADA book value, whichever is greater, with an $8 minimum. Mobile homes are charged at 3.75%.4Division of Motor Vehicles – State of Delaware. Motor Vehicle Fees On a $30,000 car, that comes to $1,575.
Vehicles transferred as gifts between immediate family members are exempt. The exemption covers spouses, parents, children, siblings, and grandparents, including step and in-law relationships.5Legal Information Institute. Delaware Administrative Code 2266-2.0 – Exceptions
Real Estate Transfer Tax
When real property changes hands, Delaware charges a realty transfer tax. The standard state rate is 3% of the property’s value. In jurisdictions that have enacted the full 1.5% local realty transfer tax, the state portion drops to 2.5%, leaving a combined rate between 3% and 4%. Buyer and seller split the tax equally.6Delaware Code Online. Delaware Code Title 30 Chapter 54 – Realty Transfer Tax
On a $400,000 home at the full 4% combined rate, the total tax is $16,000, or $8,000 per party. First-time homebuyers get a 0.5% reduction on their share, applied against a maximum property value of $400,000, which saves a first-time buyer on that same home $2,000.6Delaware Code Online. Delaware Code Title 30 Chapter 54 – Realty Transfer Tax Transfers of property valued under $100 are exempt.
Excise Taxes Built Into Retail Prices
Several categories of goods carry excise taxes that get paid by the wholesaler and folded into the shelf price. You won’t see them itemized, but you are paying them.
- Cigarettes: $2.10 per pack of 20.7Division of Revenue – State of Delaware. Cigarette and Tobacco Tax FAQs
- Other tobacco products (cigars, pipe tobacco, smokeless): 30% of the wholesale price.7Division of Revenue – State of Delaware. Cigarette and Tobacco Tax FAQs
- Distilled spirits over 25% alcohol: $4.50 per gallon.8Justia Law. Delaware Code Title 4 Section 581 – Rates of Tax
- Distilled spirits 25% alcohol or less: $3.00 per gallon.8Justia Law. Delaware Code Title 4 Section 581 – Rates of Tax
- Wine: $1.63 per gallon.8Justia Law. Delaware Code Title 4 Section 581 – Rates of Tax
- Beer: $8.15 per barrel, roughly $0.26 per gallon.8Justia Law. Delaware Code Title 4 Section 581 – Rates of Tax
- Cider: $0.27 per gallon.8Justia Law. Delaware Code Title 4 Section 581 – Rates of Tax
- Gasoline: $0.23 per gallon.9State of Delaware. Motor Fuel Tax
- Diesel and other special fuels: $0.22 per gallon.9State of Delaware. Motor Fuel Tax
Shopping in Delaware if You Live Somewhere Else
Delaware’s tax-free shelf prices draw shoppers from Pennsylvania, Maryland, and New Jersey. You won’t pay Delaware sales tax, because there isn’t one, but your home state may require you to pay a use tax on items you bring back. Use tax exists in most states that charge sales tax, and it’s designed to stop residents from avoiding their own state’s tax by shopping across the line. The rate is typically your home state’s sales tax rate minus whatever you already paid at purchase, which in Delaware’s case is nothing.
Enforcement against individual consumers varies, but large items like furniture, electronics, and appliances are the ones most likely to attract attention. Before you count a big-ticket Delaware purchase as a full sales-tax savings, check what your home state expects you to self-report.