Gross Receipts Tax

Gross Receipts Tax

Gross Receipts Tax is a tax imposed on businesses on their total gross revenues, irrespective of their source. This tax is levied on the seller of goods or services, instead of the consumer. As a result, business owners are the ones liable to pay this tax, not the customers. If you engage in business in Delaware, then you are held responsible for this tax to be paid. As for pickups and delivery, you are not liable for the gross receipts tax on merchandise shipped out of State to your customer. However, if your customer picks up the merchandise in Delaware and takes it out of State, you will be liable for this tax.

The tax rate for this tax might differ depending on the business and ranges between .0945% and .7468%. Although there are no deductions, your business might be entitled to an exclusion, which again differs depending on the business activity. These exclusions usually start at $100,000 per month and can be as high as $1,250,000. 

The due date for the gross receipts tax returns and payments are either monthly or quarterly, depending on a business’ total gross receipts. If you are a monthly filer, then the tax is due on or before the 20th day of each month for the preceding month. If you are a quarterly filer, then the tax is due on or before the last day of the first month following the close of the quarter.

Please note that any late filing and payment of withholding tax will result in penalties. Any late filing is subject to a penalty of 5% per month, plus interest of 0.5% per month from the original due date until paid. Failure to pay is also subject to an additional penalty of 1% per month, though not to exceed 25%.