Starting a business in Delaware is an exciting endeavor, but one important task you can’t overlook is understanding Delaware’s tax requirements. While Delaware doesn’t impose a state sales tax, businesses must still comply with other tax obligations like the gross receipts tax. Whether you’re selling physical goods, providing taxable services, or making sales remotely, it’s essential to ensure your business remains compliant with Delaware tax laws.
In this guide, we’ll walk you through the process of obtaining the necessary permits, understanding the specific tax requirements, and making sure your business is fully compliant with Delaware’s regulations.
Key Takeaways:
- Requirement: Businesses selling physical goods, providing taxable services, or meeting remote sales thresholds must obtain the appropriate permits.
- Cost: No fee to register for a sales tax permit in Delaware, but other fees may apply based on your business.
- Processing Time: Expect a typical processing time of 10 working days for permit approval.
- Remote Sellers: There are no economic nexus thresholds for sales tax, but gross receipts tax may still apply for remote sellers.
What is a Sales Tax Permit in Delaware?
The state of Delaware Sales tax permit is a state-issued authorization that allows businesses to collect sales tax from customers. While Delaware does not have a state sales tax, certain taxes are still required, such as gross receipts tax and other industry-specific taxes. Businesses must obtain the proper permit if they are engaging in business activities that involve taxable goods or services.
Delaware sales tax registration is necessary for businesses that:
- Sell physical goods to Delaware customers
- Provide taxable services
- Engage in remote seller sales tax registration if they meet economic sales tax thresholds.
Even though Delaware doesn’t have a state sales tax, businesses must comply with its gross receipts tax and other local taxes that apply based on the nature of the transaction. If you plan on selling goods or services in Delaware, securing the appropriate sales tax permit is a must.
Do You Need to Register for a Sales Tax Permit in Delaware?
In Delaware, businesses must register for a sales tax permit if they are:
- In-state sellers: Businesses with a physical presence in Delaware, such as a store, warehouse, or office, must register for sales tax.
- Remote sellers: If your business makes more than $100,000 in sales or conducts 200 or more transactions in Delaware, you may need to do remote seller sales tax registration for sales tax even if you don’t have a physical presence (economic nexus rules).
- Marketplace facilitators: Businesses that facilitate third-party sales, such as through platforms like Amazon or eBay, may also need to register and collect sales tax on behalf of their sellers.
Step-by-Step: How to Get a Sales Tax Permit in Delaware?
To obtain a Delaware sales tax permit, you need to follow a straightforward process. Here’s a step-by-step breakdown on how to get a sales tax permit in Delaware:
- Gather Required Information: Before beginning your application, make sure you have all the necessary details, such as your business name, Employer Identification Number (EIN), and NAICS code.
- Visit the Delaware Division of Revenue Website: Go to the Delaware Division of Revenue’s official website and access the online registration portal.
- Complete the Application: Fill out the application form by providing details about your business, including your business type, sales volume, and contact information.
- Submit Your Application: Once you’ve completed the application, submit it through the Delaware Division of Revenue’s online portal.
- Pay Any Applicable Fees: Some businesses may be required to pay a small registration fee when applying for a Delaware sales tax permit.
- Receive Your Permit: After submitting the application, you’ll receive your Delaware sales tax permit. Processing times can vary, but once approved, you can begin collecting and remitting Delaware sales tax.
What Information Do You Need to Register?
To complete the Delaware sales tax registration process, you’ll need the following:
- Business Name: Your legal business name.
- Federal Employer Identification Number (EIN): If you have employees or operate as a corporation, you’ll need an EIN.
- NAICS Code: A code that classifies your business based on its industry.
- Business Address: The location of your business.
- Contact Information: Phone number and email address for your business.
- Projected Sales Volume: An estimate of your business’s annual taxable sales.
Having this information ready before you begin will speed up the registration process and ensure a smooth application.
How Much Does It Cost to Register for a Sales Tax Permit in Delaware?
The registration for a Delaware sales tax permit is typically free for businesses. However, depending on your business type and the nature of your operations, additional fees may apply for other permits or licenses.
Unlike some other states, Delaware does not charge a registration fee for its sales tax permit. It’s important to check with the Delaware Division of Revenue for any special requirements or fees related to your business.
How Long Does It Take to Get Approved?
The approval process for a Delaware sales tax permit is relatively quick. Once you’ve submitted your registration application:
- It typically takes around 10 working days for the Delaware Division of Revenue to process your application.
- Once approved, you’ll receive your Delaware sales tax permit, and you’ll be able to collect and remit sales tax as required by Delaware law.
Commenda’s expert advice: Be sure to check your email (including your spam folder) for any communications regarding your application status.
Common Mistakes to Avoid When Registering
To ensure that your sales tax registration Delaware process goes smoothly, avoid these common mistakes:
- Incorrect Business Type: Be sure to choose the correct business type on your application.
- Missing Information: Failing to provide necessary business details, such as your EIN or NAICS code, will delay the registration process.
- Incorrect Mailing Address: Ensure your business’s mailing address is correct to receive your sales tax permit and other important documents.
- Marketplace Facilitator Requirements: If you’re using a platform like Amazon, remember that you may have additional registration requirements.
By avoiding these mistakes, you can ensure a quicker and more efficient registration process.
What Happens After You Register?
Once you’ve obtained your Delaware sales tax permit, here’s what to expect:
- Filing Frequency: Depending on your sales volume, you’ll be assigned to file your returns either monthly, quarterly, or annually.
| Tax Liability | Filing Frequency | Details |
| Exceeds $5,000 per month | Monthly | File monthly returns |
| Less than $5,000 per month but exceeds $1,500 per quarter | Quarterly | File quarterly returns |
| Less than $1,500 per quarter | Annually | File annual returns |
- Account Setup: You’ll need to set up an account on the Delaware Division of Revenue’s e-File portal to submit your sales tax returns.
- Stay Compliant: After registration, it’s crucial to collect sales tax on applicable transactions, file returns on time, and remit the collected tax. Businesses that don’t remit the sales tax they collect can face penalties and interest charges.
Special Considerations for Out-of-State or Remote Sellers
Delaware stands out as one of the few states without a statewide sales tax. This means that businesses without a physical presence in Delaware, commonly referred to as remote sellers, are not required to collect and remit sales tax on sales made into the state. Consequently, Delaware does not impose economic sales tax nexus thresholds for sales tax purposes.
Resources & Where to Register
To begin the registration process and ensure you’re compliant with Delaware sales tax laws, visit the Delaware Division of Revenue website:
- Delaware Sales Tax Registration Portal: This portal allows businesses to register for the Gross Receipts Tax and manage their tax obligations online.
- Sales Tax Resources: Access guides and other helpful materials on Delaware’s website to assist you in managing sales tax compliance.
For businesses handling multiple state registrations or looking to simplify tax compliance, Commenda streamlines the process of registering and managing tax obligations in Delaware and other states, ensuring you stay on top of ever-changing tax laws and deadlines with ease.
Simplify Sales Tax Compliance with Commenda
Managing sales tax registration and ongoing compliance in Delaware can be simplified with Commenda. Whether you’re an in-state business or a remote seller, Commenda can help you handle everything from registration to timely filing and sales tax remittance.
Key ways Commenda can help:
- Automated Tax Rate Updates: Stay up to date with real-time updates to Delaware’s sales tax rates, so you’re always compliant.
- Instant Sales Tax Calculations: Automatically calculate the correct sales tax for every transaction, ensuring accuracy.
- Effortless Filing & Remittance: Submit your sales tax returns directly through the platform, minimizing paperwork and saving time.
- Ongoing Compliance: Commenda helps you stay compliant with Delaware-specific tax regulations, exemptions, and filing deadlines.
Let Commenda take the guesswork out of Delaware sales tax registration and compliance. Book a demo today to streamline your tax obligations.
