For those considering doing business in Delaware, here are some notes about the state tax structure.

Business License
Almost all businesses in Delaware require one or more types of licenses to operate. Typically, Delaware charges $75 per year for most licenses, prorated based on the month. Fee may be higher if additional licenses are needed. The Division of Revenue has a website that will allow you to apply and pay for a license online. 

Additionally, most municipalities also have business licenses. Some municipalities charge by category some by number of employees , and some charge a flat rate.

Capitation Tax
This is an unusual tax assessed on residents of Sussex County and parts of Kent County. It is simply a tax for residing in a certain jurisdiction. There is no direct business assessment of this tax.

Franchise Tax
All corporations pay a franchise tax ranging from $35 to $165,000, plus a $25 fee, depending on the company's stock or the value (most small private companies pay $60 total). LLC's pay an annual flat tax of $200 each. The tax is assessed by the Division of Corporations and can be paid online.

Gross Receipts Tax
The gross receipts tax is charged to most businesses holding a state business license. The gross receipts tax is a tax on the register receipts of your business, with no cost of goods deduction. Most taxes are less than 1%, and usually carry an exemption up to $150,000 per quarter. As a result, most small businesses do not pay the gross receipts tax. For tax year 2006, most rates have been reduced and the exemptions increased. There are no local gross receipts tax. This tax can now be paid online.

Income Tax
Delaware's corporation income tax is a flat rate of 8.7%. Delaware's personal income tax is a bracketed system with rates ranging from 0% to 5.95%. Wilmington has a 1.25% tax on wages and net profits. No other local income tax exists outside of Wilmington. Refer to the Division of Revenue for more information on the calculation of the tax.

Personal (Business) Property Tax
There are no taxes on personal or business property in Delaware, PERIOD.

Real Estate Property Tax
Counties, school districts, and municipalities assess taxes on real estate annually. Delaware has some of the lowest property taxes in the nation, especially in the Dover area. There is no state real estate tax.

Sales Tax
There is no general sales tax in Delaware. The only two sales taxes are assessed on car rentals (1.92%) and lodging (8%). These taxes are collected as part of the gross receipts tax. Wilmington assesses a 2% lodging tax. Contact the city for more information.

Utilities Tax
Delaware collects a 4.25% tax on utilities. Utility companies pass this tax onto their customers on their bills.

Wilmington City Taxes
Wilmington has a net profits tax, earned tax, head tax on payroll, lodging tax, and others. Contact the city for more information. Please note that their website does not provide accurate information on their taxes.