Do you need to collect and remit sales tax in Delaware?
Delaware is one of only a few states that does not have a sales and use tax system, but don’t be too surprised! The state earns much of its revenue through Gross Receipts tax instead. This specific tax is based on a business’s cumulative gross revenue from sales or services made in the state.
At this point in time, Delaware’s Gross Receipts tax only applies to businesses with physical presence in the state, (think a store, office, or warehouse). The rates range from 0.0945% to 1.9914% depending on the business’s activities.
Do you have sales tax nexus in Delaware?
There is no sales tax nexus in Delaware. In-state retail businesses are automatically responsible for Gross Receipts tax.
Are marketplace facilitators required to collect and remit sales tax in Delaware?
Since there is no general sales and use tax rate in Delaware, marketplace facilitators have no responsibility to collect and remit on behalf of their sellers. A facilitator will need to pay Gross Receipts tax if it has physical presence in Delaware.
What platforms are marketplace facilitators?
What is a marketplace facilitator?
A marketplace facilitator, sometimes referred to as a Multivendor Marketplace Platform (MMP), is an online platform that allows customers to purchase goods or services from various vendors in one convenient location. These platforms can benefit businesses by increasing product visibility and attracting a larger customer base. Additionally, marketplace facilitators often have the legal responsibility to collect and remit sales tax on behalf of sellers, which can help ease the sales tax burden for businesses.
Filing Delaware Sales Tax
When are sales tax returns due in Delaware?
In Delaware, no sales tax returns are due as the state has adopted an alternative approach – the Gross Receipts tax.
To ensure a seamless tax experience, Delaware will assign businesses a monthly or a quarterly filing schedule. For new businesses, Delaware automatically designates a quarterly Gross Receipts tax filing schedule.
Here are the crucial deadlines to keep in mind:
- For monthly filers, Gross Receipts tax returns and payments are due by the 20th day of each month.
- For quarterly filers, the deadline is the last day of the month following the end of a quarter.