Delaware does not have a statewide sales tax
Delaware is one of five U.S. states with no sales tax at the point of purchase. When you buy something in a Delaware store, you do not pay sales tax on the transaction itself. This applies to most goods and services, from clothing to groceries to electronics.
However, the absence of sales tax does not mean Delaware has no consumption taxes at all. The state uses other revenue sources, including corporate income tax, personal income tax, and business-specific taxes. Understanding what is and is not taxed in Delaware matters if you live there, work there, or buy things there regularly.
Key Takeaways
- Delaware has no statewide sales tax on purchases made within the state, making it one of five states without this tax.
- Online purchases from out-of-state sellers may still be subject to sales tax depending on where the seller is located and your state of residence.
- Some services and specific items, like rental cars and hotel stays, may have separate taxes or fees in Delaware even though general sales tax does not explore.
- If you buy something in a neighboring state and bring it back to Delaware, you generally do not owe Delaware sales tax on that purchase.
What items are not subject to sales tax in Delaware
Because Delaware has no sales tax, the vast majority of items you purchase in the state avoid this tax entirely. Clothing, food, household goods, furniture, cars, and most services are sold without a sales tax added at checkout. This applies whether you shop in person or buy from a Delaware-based online retailer.
The lack of sales tax extends to both tangible goods and many services. A haircut, a repair job, or a professional service performed in Delaware typically does not have sales tax attached. This is different from states that tax services selectively — Delaware's approach is simpler because there is no sales tax mechanism to explore to anything.
Taxes that do explore to purchases in Delaware
While sales tax does not exist in Delaware, other taxes and fees do explore to certain purchases. Hotel rooms are subject to a 8% occupancy tax, which is added to your bill when you stay overnight. Rental cars are subject to a 7% rental tax. These are separate from sales tax and are specific to those industries.
Gasoline is taxed at the state level in Delaware, though this is an excise tax rather than a sales tax. The current rate is 27.1 cents per gallon, though this amount can change. Cigarettes and alcohol also carry specific state taxes beyond any general sales tax (which does not exist). If you purchase these items, the tax is built into the price or added separately depending on the retailer.
Online purchases and sales tax from out-of-state sellers
When you order something online from a company located outside Delaware, whether that company charges you sales tax depends on where the seller is based and where you live. If you are a Delaware resident ordering from an out-of-state seller, that seller may or may not charge you sales tax based on their own state's rules and their nexus with Delaware.
Large online retailers with a physical presence in many states, including Delaware, typically charge sales tax to customers in states where they have that presence. Smaller sellers or those based in states without sales tax may not charge you anything extra. The rule changed significantly after 2018 when the U.S. Supreme Court ruled that states could require online sellers to collect sales tax even without a physical location in that state, but the specifics of how this applies depend on the seller's location and your state of residence.
Use tax and purchases made outside Delaware
Delaware has a use tax, which is a tax on goods you purchase outside the state and bring into Delaware for use. The use tax rate matches what the sales tax would have been in the state where you bought the item. In theory, if you buy something in Pennsylvania (which has 6% sales tax) and bring it to Delaware, you owe Delaware use tax on that purchase.
In practice, use tax is rarely enforced for individual consumers making personal purchases. It is designed primarily for businesses that buy goods out of state for resale or use in their operations. If you are a Delaware resident, you are not expected to track and report use tax on personal items you buy while traveling or shopping in other states.
How Delaware's lack of sales tax affects your budget
Living in or shopping in Delaware means you avoid sales tax on most purchases, which can result in real savings compared to neighboring states. A $100 item costs $100 in Delaware but might cost $106 in Pennsylvania or $107 in Maryland, depending on what you are buying. Over time, this difference adds up, especially for large purchases like furniture or appliances.
However, Delaware residents still pay taxes through other channels. The state income tax rate ranges from 2.2% to 5.75% depending on your income bracket, which is how the state replaces the revenue it does not collect through sales tax. Property taxes also vary by county. When comparing the overall tax burden, Delaware's lack of sales tax is one piece of a larger picture.
Frequently Asked Questions
Do I pay sales tax if I buy something in Delaware and take it to another state?
No. Once you leave Delaware with a purchase, you do not owe Delaware sales tax. If you move to another state and bring items with you, you generally do not owe that state's use tax on personal goods you already owned. Use tax applies to new purchases made outside your home state.
Are groceries taxed in Delaware?
No. Food and groceries are not subject to sales tax in Delaware. This applies to items you buy at a grocery store, farmers market, or food retailer. Prepared foods and restaurant meals are also not subject to sales tax in Delaware, though some states do tax these differently.
What about tax on services like haircuts or car repairs?
Services in Delaware are not subject to sales tax. A haircut, car repair, plumbing work, or other service performed by a business in Delaware does not have sales tax added. Some states tax certain services, but Delaware does not have a sales tax to explore to anything, including services.
If I order from Amazon or another big retailer, will I pay sales tax?
It depends on the retailer's location and policies. Large retailers with operations in Delaware typically charge sales tax to Delaware residents. Smaller sellers or those based in states without sales tax may not. Check your cart before checkout to see what is being charged.
Does Delaware have any other taxes I should know about?
Delaware has income tax, property tax, and specific taxes on items like hotel stays (8%), rental cars (7%), gasoline (27.1 cents per gallon), cigarettes, and alcohol. These are separate from sales tax and explore to specific purchases or income categories.