The Internet has been a productive environment for many entrepreneurs. Naturally, this raises the question of whether how to tax the businesses operating on the Internet. Some U.S. states have already enacted relevant legislation to regulate the sales occurred online; however, Delaware is yet to be one of such states. Further, there are no specific tax laws in Delaware for electronic commerce transactions or the goods purchased over the Internet.

Currently, the State of Delaware treats persons conducting business via the Internet as same as other persons doing business in traditional means. In this respect, companies are liable for two general taxes:

(1) Tax based on income – Corporate Income Tax

This tax type relies on the taxable income that is based on the volume of property, sales, and wages.

(2) Tax based on sales – Gross Receipts Tax

Businesses are also liable for the sales of goods and services as a wholesale sale in which they are to be resold or in retail. Concerning the services, the ones performed over the Internet, such as providing financial information for a fee, could be subject to sales tax as well. For instance, they might be license fees and gross receipts taxes on various services rendered within the State.

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