Taxes / State tax rules / Delaware
Selling on eBay, Poshmark or Etsy from Delaware: sales tax and 1099-K rules
Delaware has no state or local sales tax, so a marketplace has no Delaware sales tax to collect; instead Delaware levies a gross receipts tax on the seller, which the Division of Revenue lists at 0.7468% for a general retailer, on receipts above a $100,000 monthly exclusion. The Division of Revenue's 1099 pages set no 1099-K threshold of their own: they name 1099-MISC, 1099-NEC and 1099-R as forms filed directly with Delaware and say a newer requirement to report additional 1099 types is waived until further notice.
General information, not tax advice. Check with a tax professional about your own situation.
Checked against the official pages listed below on .
Delaware in short
- General sales tax:
- No general sales tax
- Marketplace facilitator law:
- No (no sales tax to collect)
- Form 1099-K:
- No state rule stated on the pages checked
Who collects the tax on a marketplace sale
No one: with no sales tax, there is nothing for a marketplace to collect on Delaware sales. The tax that does reach sellers, the gross receipts tax, is levied on the seller rather than the buyer, and the Division's pages checked here don't mention marketplaces.
If you sell only through marketplaces
The Division of Revenue's pages checked here don't address marketplace-only sellers. Its gross receipts tax FAQ says a Delaware retail business doesn't pay gross receipts tax on goods it ships directly to customers outside Delaware, as long as it keeps documentation of the interstate shipment, but does when the customer picks up or takes delivery in Delaware.
Registration, resale certificates and what changes when you also sell direct have their own page: Delaware: seller's permit and resale certificate rules.
"You do not have to pay gross receipts tax on goods shipped by you directly to your customer outside of Delaware, but you need to keep documentation of the interstate shipment."
Sources: Gross Receipts Tax FAQs.
Does Delaware have a sales tax?
The Division of Revenue says Delaware does not have a state or local sales tax. It does have an annual business license requirement and a gross receipts tax imposed on the seller of goods or provider of services; sales of tangible property also need a retail or wholesaler license.
"For all businesses: Delaware does not have a state or local sales tax."
"This tax is levied on the seller of goods or services, rather than on the consumer."
Sources: Doing Business in Delaware; Gross Receipts Tax FAQs; Detailed List of Division of Revenue Licenses and Tax Rates.
Form 1099-K: Delaware and the federal test
The Division of Revenue's W-2 and 1099 FAQ says Delaware participates in the combined federal/state filing program, but that 1099-MISC, 1099-NEC and 1099-R information must be submitted directly to the Division, and that the Director has waived, until further notice, a newer requirement to report additional 1099 types directly. Neither that FAQ nor the 1099 Reporting page mentions Form 1099-K, so no Delaware 1099-K rule is stated here.
"Recent changes to Delaware Code require that additional types of 1099 forms be reported directly to Delaware. The Director of Revenue has waived the requirement until further notice."
The federal test, for comparison: the IRS says a payment app or online marketplace must send a Form 1099-K when payments for goods or services total over $20,000 in more than 200 transactions, and adds: "However, they may send you a Form 1099-K with lower amounts and/or transactions." (Understanding your Form 1099-K, reviewed ). The Instructions for Form 1099-K count both parts for the calendar year, through each platform separately, and say the box 1a gross amount is figured without adjustments for credits, discounts, fees, refunds or shipping, so a 1099-K figure is not the same as profit. More on the federal rule in Form 1099-K for resellers.
Sources: W-2 and 1099 Form FAQs; 1099 Reporting.
Worked examples
A Delaware seller with $6,000 a month in sales
$6,000 is under the $100,000 monthly exclusion the Division's rate list gives a general retailer, so no gross receipts tax is due on that month's receipts. Goods shipped directly to buyers outside Delaware aren't subject to the tax at all, per the FAQ. The rate list shows a $90 annual license fee for Retailer - General, which includes a $15 retail crime fee.
A $130,000 month with every sale taxable in Delaware
If all $130,000 were receipts subject to the tax (for example, buyers taking delivery in Delaware), the tax would apply to the $30,000 above the exclusion: $30,000 x 0.7468% = $224.04 for the month, at the general retailer rate on the Division's list.
Edge cases and details
- Gross receipts tax is due when a retail customer picks up or takes delivery of the product in Delaware, regardless of where it ends up, the Division's FAQ says.
- Gross receipts tax rates range from .0945% to 1.9914% depending on business activity (with a variable rate on petroleum products), and exclusions generally start at $100,000 a month and can be as high as $1,250,000.
- Since January 1, 2021, Delaware mandates online filing for gross receipts taxes (TIM 2020-2), according to the FAQ.
What to do
- Look up the Division of Revenue's Tax Tip for your business type to confirm the license category, rate and exclusion that apply to you.
- If you sell from Delaware, keep shipping records for orders sent to buyers outside the state, which the FAQ says aren't subject to gross receipts tax.
- Check with a tax professional, or with the Division of Revenue, about your license and filings.
Common questions
Do eBay, Poshmark or Etsy charge Delaware sales tax?
There is no Delaware sales tax to charge: the Division of Revenue says Delaware has no state or local sales tax. Delaware instead has a gross receipts tax that is levied on the seller, not the buyer.
Does a Delaware online seller owe gross receipts tax on out-of-state orders?
The Division's FAQ says a Delaware retail business doesn't pay gross receipts tax on goods it ships directly to customers outside Delaware, if it keeps documentation of the interstate shipment. Sales where the buyer takes delivery in Delaware are taxable.
Related
- Every state on one table: sales tax, marketplace facilitator laws and 1099-K rules
- Delaware: seller's permit and resale certificate rules
- Connecticut: sales tax and 1099-K rules
- District of Columbia: sales tax and 1099-K rules
- Form 1099-K for resellers: the federal test
- Do eBay's fees apply to the sales tax a buyer pays?
- Where each selling app keeps its sales report
General information, not tax advice
This page summarizes Delaware's own published pages and statutes as read on , and the IRS's 1099-K pages. It doesn't say what you should file, register for or pay. Rules depend on your situation and change: check with a tax professional, or with the state's revenue department.
Sources
Official pages this page is built from, with the day each was read.
- Delaware Division of Revenue: Doing Business in Delaware; read . No state or local sales tax; business license and gross receipts tax on sellers.
- Delaware Division of Revenue: Gross Receipts Tax FAQs; read . Tax on the seller; rate range; exclusions; out-of-state shipments; delivery in Delaware; online filing.
- Delaware Division of Revenue: Detailed List of Division of Revenue Licenses and Tax Rates; read . Retailer - General: rate 0.007468, $100,000 monthly exclusion, $90 annual fee including $15 retail crime fee.
- Delaware Division of Revenue: 1099 Reporting; read . Combined federal/state program; 1099-MISC and 1099-R filed directly with the Division.
- Delaware Division of Revenue: W-2 and 1099 Form FAQs; read . 1099-MISC, 1099-NEC and 1099-R submitted directly to Delaware; waiver of additional 1099 types.
- IRS: Understanding your Form 1099-K, reviewed . The federal 1099-K test.
- IRS: Instructions for Form 1099-K, reviewed . Both parts of the federal test counted for the calendar year.
Free 1-page Reseller Cheat Sheet: fees on 8 platforms, Media Mail and stamp prices
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