BLS Insights

Delaware Lowers the Gross Receipts Tax

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Gross Receipts TaxEffective 1/1/2014, the State of Delaware lowered the Gross Receipts Tax for many business categories. Although the gross receipts tax has been lowered, the $100,000 exclusion did not change and still applies. Along with the $100,000 exclusion not being changed, the annual licensing fees remain unchanged.

Gross Receipts Tax Change

With the change in Gross Receipts Tax for Delaware, some businesses such as advertising agencies, parking garage operators and professional service companies will only see a savings of $4 per $100,000. Other industries such as commercial lenders, contractors, and restaurants will be getting a bigger tax cut of $6.50 per $100,000. For example, a restaurant with $5 million in sales will now receive tax savings of approximately $318.

The biggest change is the supermarket industry. They had been taxed at .33% on the first $2 million and then .6181% on gross receipts above it. Now they will only pay .3267% which means a supermarket with $5 million in sales will save about $6,270 in tax.

The industries not seeing a change are public utilities, hotels/motels, and vending machine operators.

Delaware also made a change in how gross receipts tax can be reported as they no longer accept Gross Receipts Tax coupons. Instead, filers need to use the online Gross Receipts Tax System to file immediately or print a personalized paper return. You can find that information on the State of Delaware’s Gross Receipts Tax Forms webpage.

As always, please contact your tax professional for details related specifically to your situation.

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For additional information on our small business services, visit our website or contact our Tax & Small Business team.

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