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DE TaxesDE Tax CreditsDE Tax Incentives
Delaware Taxes
Corporate Income Tax
- The tax rate is 8.7% on net income.
Corporation Franchise Tax
- Franchise Tax is not dependent on business location.
Personal Income Taxes
- Tax Rate Range: Low - 2.2%; High - 5.95%
Personal Property Tax
- Delaware does not impose a Personal Property Tax.
Gross Receipt Taxes
- Manufacturers - 0.180% (effective January 1, 2000) on the gross receipts for all goods manufactured in Delaware, regardless of the location of sale. In computing monthly gross receipts, the first $1 million in receipts are not subject to taxation.
- Wholesalers - 0.384% on the gross receipts of all goods physically delivered within Delaware to the purchaser. In computing monthly gross receipts, the first $50,000, in receipts are not taxable. Manufacturers that also wholesale their products are subject to both the manufacturing and wholesale tax on gross receipts.
- Retailers - 0.720% on the aggregate receipts in excess of $50,000 per month.
- Restaurants - 0.624% on aggregate receipts in excess of $50,000 per month.
- Food Processors - 0.192% on gross receipts, in excess of $50,000 per month, from all goods sold within Delaware.
- Petroleum Products Wholesalers - 0.384% on aggregate receipts in excess of $50,000 per month. Wholesalers are also subject to a surtax of 0.24% (.0024) on the sale of petroleum products.
- Petroleum Products Retailers - 0.9% (Hazardous Substances Cleanup Tax) and 0.72% on aggregate receipts in excess of $50,000 per month. (Retailers are exempt from 0.9% and 0.72% tax if the Hazardous Substances Cleanup Tax was paid to their supplier.)
- Occupational/Professional/General Services - 0.384% on aggregate receipts in excess of $50,000 per month.
- For a complete listing of businesses requiring a gross receipt tax, visit the Delaware Economic Development Office.
General Sales Taxes
- Delaware does not impose a state or local sales tax.
Public Utilities Tax
- The public utilities tax is 4.25%.
- 2% for qualified manufacturers and food processors
- Cable television communication services are taxed at 2.125%.
Real Property Taxes
- Delaware does not impose a State-level tax on real or personal property.
- Real estate taxes are paid at the county, municipal and school district levels. Business taxes are generally imposed at the municipal level.
- For local property tax information, visit the New Castle County Department of Finance or call (302) 395-5160.
Corporate Income Tax Credits
Gross Receipts Tax Reductions -- In addition to the corporate income tax credits, qualifying firms will not be subject to gross receipts taxes for the first five years and will then have these gross receipts taxes reduced on a declining scale for a period of ten years beginning with a 90% reduction on the sixth year and ending with a 5% reduction the fifteenth year.
- Targeted Industry Tax Incentives - Corporate income tax credits and gross receipts tax reductions are available to: manufacturers; wholesalers; laboratories or similar facilities used for scientific, agricultural or industrial research, development or testing; computer processing services; engineering services; consumer credit reporting services; aviation services; wholesaler of computer software, telecommunication services, any combination of these activities and the administration, management or support operations including marketing required for any of these activities. Get a copy of the Tax Credit Application.
- Expansions With Employment - The program requires that a taxpayer in a "targeted industry" invest a minimum of $200,000 in a new or expanded facility and hire a minimum of five new employees. Beginning January 1, 1997, the program provides credits of $400 for each new qualified employee and $400 for each $100,000 investment. During the ten-year life of credits, credits may not exceed 50 percent of the company's pre-credit tax liability in any one year. Unused credits may be carried forward for ten years.
- Expansions Without Employment - Effective January 1, 1992, any taxpayer engaging in the activities of manufacturing or wholesaling, whose investment in the new or expanded facility equals or exceeds the greater of: (a) $1 million or (b) 15% of the unadjusted basis of the facility, is eligible for corporate income tax credits. The amount of the credit is equal to 75% of the credit described above, subject to the carry-over provisions, and further limited to a maximum lifetime credit of $500,000. In order to qualify for this credit, the employer must maintain employment at the expanded facility equal to 85% of the wages paid during the previous year.
- Replacement Facilities - Effective for facilities placed in service after July 1, 1992, investment in replacement facilities are considered qualified investment for the corporate credits and license gross receipt reductions to the extent that the investment in the replacement facility exceeds the greater of: (1) 150% of the unadjusted cost basis of the facility which is being replaced or (2) 100% of the market value of the facility being replaced.
- Green Industries - Effective for tax years beginning after December 31, 1991 and before January 1, 2007, any manufacturer may be entitled to claim credits against the Delaware corporate income tax in the amount of $250 ($400 effective 1/1/97. In order to qualify, the manufacturer must reduce the amount of waste rel
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