How to Get Delaware Sales Tax Permit | A Comprehensive Guide

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Delaware Sales Tax Permit

Have you ever wondered what a sales tax permit is in Delaware? If you don’t, then we will guide you through it. In Delaware, a sales tax permit, also known as a seller’s permit, is a legal document that allows businesses, specifically Delaware LLC, to collect and remit sales tax to the Delaware government. This permit ensures businesses operate legally and have the necessary permissions to conduct sales within a particular state. Delaware has its own rules and regulations surrounding sales tax permits. Business owners must familiarize themselves with the requirements and processes to comply with the law.

In this comprehensive guide, Webinarcare Editorial Team will walk you through everything you need to know about obtaining and maintaining Delaware Sales Tax Permit. From understanding the basics of sales tax to the intricacies of the application process, we have got you covered. You must be guided by all the factors gathered in this article.

How to Get Sales Tax Permit in Delaware

What is a Sales Tax Permit?

A sales tax permit is Delaware-issued license that allows businesses to collect and remit sales tax on the goods and services they sell. This permit ensures Delaware businesses operate legally and have the necessary permissions to conduct sales within a particular state. In Delaware, a sales tax permit is required for businesses that sell taxable goods or services and are required to collect sales tax from their customers.

Who Needs a Sales Tax Permit?

Not all businesses need a sales tax permit. Typically, businesses that sell tangible personal property or taxable services to customers within Delaware require a sales tax permit. This includes brick-and-mortar stores, online retailers, and service providers. Delaware may also require sales tax permits for businesses that sell certain types of products or services, such as alcohol or tobacco. If you plan to start a bakery business in Delaware, you typically need a sales tax permit to collect and remit sales tax on the items you sell.

If your business operates in multiple states or forms a foreign LLC in Delaware, you may need to obtain a sales tax permit for each state with a sales tax nexus. A sales tax nexus is a connection or presence a business has within a state that requires them to collect and remit sales tax. Factors that can create a nexus include the following:

  • Physical location
  • Employees
  • Inventory within a state

Obtaining a sales tax permit in Delaware is not just about complying with regulations, but about seizing the opportunity to grow and thrive in the market. To start an LLC must be a gateway to establish a legitimate business presence and to build trust with customers. Embrace this essential step, for it paves the path towards success and prosperity.

– WEBINARCARE EDITORIAL TEAM

How to Get a Sales Tax Permit in Delaware

The process for obtaining a sales tax permit varies from state to state. Generally, Delaware businesses must apply through the Delaware Division of Revenue. The following steps provide an overview of the application process:

Step 1: Determine If You Need a Sales Tax Permit 

Before applying, determine if your Delaware business needs a sales tax permit based on the goods or services you sell and where you operate.

Most Delaware businesses that sell tangible goods or services must have a sales tax permit. This includes:

  • Retailers – businesses that sell goods directly to consumers, such as clothing stores, grocery stores, and electronics stores.
  • Service Providers – businesses that provide services, such as hair salons, auto repair shops, and landscaping companies.
  • Wholesalers – businesses that sell goods to other businesses, such as distributors and manufacturers.
  • Online Sellers – businesses that sell goods or services online, including Delaware E-commerce and online marketplaces.

Step 2: Register Your Delaware Business

Register your business in Delaware if you still need to. This may involve obtaining an Employer Identification Number (EIN) in Delaware from the Internal Revenue Service and registering your business name with the Delaware Secretary of State. 

Your Delaware business name should be unique, memorable, and reflective of your products or services. There is a complete guide on Delaware Business Name Search for a proper Delaware business name. You can also check the availability of your desired business name by searching the Delaware Division of Corporations Entity Search‘s website.

In obtaining an EIN, it can be done through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

Complete the registration for a legal Delaware business if you plan to sell tangible goods. 

Recommended: Professional services have the EIN included in their LLC formation package. We recommend using –

LegalZoom – ($0 + State Fee for LLC formation)

Step 3: Gather The Necessary Information

The next step is to collect the required information for the Delaware sales tax permit application. To obtain a sales tax permit in Delaware, you will need to gather the following necessary information:

  1. Business Details: Provide the legal name, mailing address, and contact information of your business, including your Delaware DBA (Doing Business As) names.
  2. Entity Type: Indicate whether your business is a sole proprietorship, partnership, corporation, LLC, or legal entity.
  3. EIN/SSN: Have your Employer Identification Number (EIN) or Social Security Number (SSN) ready. This identification is required to associate the sales tax permit with your business.
  4. Purpose of Permit: Explain the nature of your business activities, such as retail sales, wholesale, manufacturing, or service, to determine the appropriate sales tax category.
  5. Product/Service Description: Provide a brief description of the goods or services your business offers, including any unique details that may impact the sales tax requirements.
  6. Nexus Information: Identify if your business has a physical presence or nexus in Delaware, such as a brick-and-mortar location, employees, or inventory storage.
  7. Estimated Sales: Estimate your expected monthly or annual sales volume in Delaware to determine the appropriate tax registration and reporting requirements.
  8. Previous Registration: If you are already registered for sales tax in another state, provide details to determine if any reciprocal agreements or exemptions apply.
  9. Supporting Documents: Some states may require additional documentation, such as a copy of your business license, federal tax returns, or a certificate of authority.
  10. Fee Payment: Be prepared to pay the required fee for obtaining a sales tax permit in Delaware.

It’s important to note the exact requirements and processes in Delaware. It is recommended to visit the official website of the Delaware Division of Revenue or consult with a tax professional for accurate and up-to-date information.

Step 4: Complete The Application

Fill out the sales tax permit application form for Delaware, either online or by paper. Be prepared to answer questions about your business operations, products, and services. You can register your Delaware sales tax permit in There is no sales tax in Delaware.

Step 5: Pay Any Required Fees

In Delaware, the state permit may charge a fee for obtaining a sales tax permit. Be prepared to pay this fee when submitting your application. Usually, it costs $0 (no sales tax). 

Step 6: Submit The Application

Submit your completed application, along with the required fee of $0 (no sales tax), to the Delaware Division of Revenue.

Step 7: Receive Your Permit

Once your application is approved, you will receive your sales tax permit. This may be a physical document or an electronic certificate you can print. 

How to Maintain a Sales Tax Permit

After obtaining a sales tax permit, Delaware businesses must maintain compliance with Delaware sales tax laws. This typically involves the following steps:

  • Collect Sales Tax: Collect sales tax from customers on taxable goods and services. Be sure to charge the correct sales tax rate based on your and your customer’s locations. The sales tax rate in Delaware is 0% since Delaware has no sales tax. 
  • Keep Accurate Records: Maintained detailed records of all sales transactions, including the amount of sales tax collected. This information will be required when filing your sales tax returns. Hire a certified public accountant (CPA) to keep track of records. 
  • File Sales Tax Returns: File sales tax returns with Delaware, typically monthly, quarterly, or annually, depending on your sales volume and Delaware requirements. Be sure to remit the sales tax collected during the reporting period.
  • Renew your Permit: Delaware requires businesses to renew their sales tax permits periodically. Know your state’s renewal requirements and complete the necessary steps to maintain your permit.

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Penalties for Non-Compliance

Failure to obtain or maintain a sales tax permit can seriously affect a business. Penalties for non-compliance can include fines, penalties, interest charges, and even the revocation of your business license. Additionally, Delaware businesses that fail to collect and remit the Delaware sales tax may be held personally liable for the unpaid taxes.

Do I Need a Sales Tax Permit If I Only Sell Online?

You likely need a sales tax permit if you sell taxable goods or services online and have a sales tax nexus in Delaware. To have a Home-Based Business in Delaware, you must still file and maintain a sales tax permit. 

How Long Does Obtaining a Sales Tax Permit Take?

The processing time for sales tax permit applications takes time. In Delaware, they may issue permits within a few days, while others may take several weeks. Be sure to apply well in advance of when you plan to start selling taxable goods or services.

Can I Have Multiple Sales Tax Permits?

Businesses that operate in multiple states or sell different types of products may need multiple sales tax permits. Be sure to research the specific requirements for each state and product type. Having a foreign LLC is not quite easy since you still need to hire a Registered Agent, file for the Certificate of Formation of the state you wish to operate your business, and also, you need to have multiple sales tax permits. 

How Much Does a Sales Tax Permit Cost?

The costs and requirements for obtaining a sales tax permit vary depending on the state. To find accurate information about the cost of a sales tax permit in Delaware, you can visit the Delaware Division of Revenue’s website or consult with a tax professional or accountant familiar with your state’s regulations. They can provide the most up-to-date information on the costs and requirements for obtaining a sales tax permit in Delaware.

FAQs

What is a sales tax permit?
A sales tax permit is a license issued by the state that allows you to sell goods and/or services in Delaware and collect sales tax from your customers.
Do I need a sales tax permit to sell in Delaware?
Yes, if you are selling goods or services in Delaware, including at craft fairs, online, or from a physical location, you are required to obtain a sales tax permit.
How do I apply for a sales tax permit in Delaware?
You can apply for a sales tax permit online through the Delaware Division of Revenue or by submitting a paper application.
How do I register online for a Delaware sales tax permit?
You can register for a sales tax permit in Delaware online by visiting the Division of Revenue website and selecting “Register a New Business.”
What is the cost to apply for a sales tax permit in Delaware?
There is no fee to apply for a sales tax permit in Delaware.
Who is responsible for obtaining a sales tax permit in Delaware?
The owner or operator of the business is responsible for obtaining a sales tax permit in Delaware.
Is a Delaware sales tax permit the same as a business license?
No, a sales tax permit is separate from a business license.
Can an out-of-state business obtain a sales tax permit in Delaware?
Yes, out-of-state businesses that sell taxable goods or services in Delaware are required to obtain a sales tax permit.
Do I need a Federal EIN to apply for a sales tax permit in Delaware?
Yes, you will need a Federal EIN (Employer Identification Number) to apply for a sales tax permit in Delaware.
Is a DUNS number required to apply for a sales tax permit in Delaware?
No, a DUNS (Data Universal Numbering System) number is not needed to apply for a sales tax permit in Delaware.
How long does it take to receive a sales tax permit in Delaware?
It typically takes about 7-10 business days to receive a sales tax permit in Delaware after submitting the application.
Is there a penalty or fine for not having a sales tax permit in Delaware?
Yes, there may be a penalty or fine for operating without a sales tax permit in Delaware.
What is the sales tax rate in Delaware?
Delaware does not have a sales tax.
Are there any exemptions from having to obtain a sales tax permit in Delaware?
No, all businesses that sell taxable goods or services in Delaware are required to obtain a sales tax permit.
Can I sell goods tax-free in Delaware if I do not have a sales tax permit?
No, all sales of taxable goods and services in Delaware are subject to sales tax, even if you do not have a sales tax permit.
Do I need to renew my sales tax permit every year in Delaware?
Yes, you must renew your sales tax permit annually in Delaware.
Can I transfer my Delaware sales tax permit to another business owner?
No, sales tax permits are non-transferable.
Do I need to display my sales tax permit at my business location?
Yes, you are required to display your sales tax permit at your business location.
Can I sell online without a Delaware sales tax permit?
No, all businesses that sell taxable goods or services in Delaware, including online sales, are required to obtain a sales tax permit.
Do I need to charge sales tax on shipping and handling in Delaware?
Yes, shipping and handling are typically taxable in Delaware.
What happens if I underreport my sales tax in Delaware?
If you underreport your sales tax in Delaware, you may be subject to penalties and fines.
Do I need to file a sales tax return even if I had no taxable sales in Delaware?
Yes, you must file a sales tax return even if you had no taxable sales in Delaware.
Can I operate a business without a physical location and still need a sales tax permit in Delaware?
Yes, all businesses that sell taxable goods or services in Delaware, including those without a physical location, are required to obtain a sales tax permit.
Can I sell goods tax-free to other businesses with a Delaware sales tax permit?
Yes, sales of taxable goods or services to other businesses with a Delaware sales tax permit are typically tax-free.
Can I collect sales tax on purchases in other states with a Delaware sales tax permit?
No, you can only collect sales tax in Delaware with a Delaware sales tax permit.
Can I use my Delaware sales tax permit to participate in vendor events in other states?
No, you must obtain a sales tax permit in each state you participate in vendor events.
What type of information do I need to include on my Delaware sales tax permit application?
You will need to provide basic business information, such as the business address and type of business, as well as information about the owners and officers of the business.
Can I sell food or beverages tax-free in Delaware with a sales tax permit?
No, food and beverages are typically subject to sales tax in Delaware, even with a sales tax permit.
Can I get a temporary sales tax permit in Delaware for a special event?
Yes, you may be able to obtain a temporary sales tax permit in Delaware for a special event, such as a craft fair or festival.
Do I need to obtain a sales tax permit in Delaware?
Yes, if you plan to sell tangible personal property or taxable services in the state of Delaware, you must obtain a sales tax permit.
How do I obtain a sales tax permit in Delaware?
You can apply for a sales tax permit online through the Division of Revenue’s One Stop Business Licensing and Registration Service.
Are there any fees associated with obtaining a sales tax permit in Delaware?
There is no fee to apply for a sales tax permit in Delaware.
Do I need a separate sales tax permit for each location in Delaware where I conduct business?
No, you only need one sales tax permit for all locations in Delaware where you conduct business.
Can I apply for a temporary sales tax permit in Delaware?
Yes, you can apply for a temporary sales tax permit in Delaware if you plan to sell tangible personal property or taxable services at a special event or flea market.
How long does a temporary sales tax permit last in Delaware?
A temporary sales tax permit is valid for up to 30 calendar days.
Do I still need to file sales tax returns in Delaware if I only made a few sales?
Yes, even if you only made a few sales, you still need to file sales tax returns in Delaware.
How often do I need to file sales tax returns in Delaware?
In Delaware, sales tax returns are due monthly, quarterly, or annually depending on the volume of your sales.
Is there a penalty for filing sales tax returns late in Delaware?
Yes, there is a penalty for filing sales tax returns late in Delaware. The penalty is 5% of the tax due per month or part of a month.
Can I file sales tax returns online in Delaware?
Yes, you can file sales tax returns online through the Division of Revenue’s One Stop Business Licensing and Registration Service.
Can I take a deduction for bad debts on my Delaware sales tax return?
Yes, you can take a deduction for bad debts on your Delaware sales tax return.
Are there any exemptions or exclusions from Delaware sales tax?
Yes, certain types of transactions are exempt or excluded from Delaware sales tax, including sales to the federal government and certain nonprofit organizations.
Do I need to collect and remit local sales tax in addition to state sales tax in Delaware?
No, there is no local sales tax in Delaware.
Is sales tax calculated on the sale price before or after discounts or coupons in Delaware?
Sales tax is calculated on the sale price before discounts or coupons in Delaware.
Can I use a resale certificate to make tax-exempt purchases for resale in Delaware?
Yes, you can use a resale certificate to make tax-exempt purchases for resale in Delaware.
Do I need to renew my sales tax permit in Delaware?
No, you do not need to renew your sales tax permit in Delaware unless there are changes to your business information.
Can I cancel my Delaware sales tax permit if I no longer conduct business in the state?
Yes, you can cancel your Delaware sales tax permit by submitting a written request to the Division of Revenue.
Do I need a Delaware sales tax permit if I only sell at events outside of Delaware?
No, you do not need a Delaware sales tax permit if you are only selling tangible personal property or taxable services at events outside of the state.
Do I need a separate sales tax permit for online sales in Delaware?
No, you do not need a separate sales tax permit for online sales in Delaware.
Do I need to charge sales tax on shipping and handling charges in Delaware?
Yes, you need to charge sales tax on shipping and handling charges in Delaware.
Are there any penalties for failing to collect or remit sales tax in Delaware?
Yes, there are penalties for failing to collect or remit sales tax in Delaware. The penalty is 10% of the unpaid tax.
What should I do if I receive a notice of noncompliance from the Delaware Division of Revenue?
If you receive a notice of noncompliance from the Delaware Division of Revenue, you should contact the Division of Revenue immediately to resolve the issue.
What can I do if I disagree with an assessment or penalty imposed by the Delaware Division of Revenue?
If you disagree with an assessment or penalty imposed by the Delaware Division of Revenue, you can file an appeal with the Delaware Tax Appeal Board.
Can I use a credit to pay sales tax owed in Delaware?
Yes, you can use a credit to pay sales tax owed in Delaware if you have a credit on your account with the Division of Revenue.
Is there a sales tax exemption for agriculture in Delaware?
Yes, purchases of certain agricultural products and tangible personal property used in agricultural production are exempt from sales tax in Delaware.
Do I need to send in a paper copy of my sales tax return if I file online in Delaware?
No, you do not need to send in a paper copy of your sales tax return if you file online in Delaware.
How can I get more information about sales tax in Delaware?
You can visit the Delaware Division of Revenue website or contact the Division of Revenue directly.

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Conclusion

Obtaining and maintaining a sales tax permit is crucial to running a compliant and successful business. By understanding the requirements and processes in Delaware, you can ensure that your business collects and remits sales tax correctly and avoids any penalties for non-compliance. Consulting with a tax professional or Delaware attorney is recommended to ensure that your Delaware business meets all necessary sales tax requirements.

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