Delaware has no sales tax on most purchases

Delaware does not charge a sales tax on retail goods or services. This applies to clothing, groceries, electronics, furniture, and nearly everything else you buy in a store. If you live in Delaware or buy something there, you will not see a sales tax added at checkout.

This makes Delaware one of five U.S. states with no statewide sales tax. The others are Alaska, Montana, New Hampshire, and Oregon. However, Delaware does have other taxes — income tax, property tax, and corporate taxes — so the absence of sales tax does not mean the state has no tax burden overall.

Key Takeaways

  • Delaware charges no sales tax on retail purchases, groceries, clothing, or most services.
  • If you buy something in Delaware, the price on the tag is the price you pay — nothing is added at the register.
  • Delaware residents still pay state income tax, property tax, and other state taxes.
  • If you buy online from an out-of-state seller and have it shipped to Delaware, you typically owe no sales tax unless the seller collects it voluntarily.

What is not taxed in Delaware

Delaware's sales tax exemption covers physical goods: groceries, clothing, household items, cars, furniture, and electronics. It also covers most services, including haircuts, repairs, and professional services. When you buy these things in Delaware, the final price is what you see — no tax is added.

The exemption is broad enough that many people move to or shop in Delaware specifically to avoid sales tax on large purchases. A car bought in Delaware costs less than the same car bought in a neighboring state with sales tax, because no tax is collected at the point of sale.

What Delaware does tax instead

Delaware makes up the revenue it loses from not having sales tax through other taxes. The state charges income tax on wages, salaries, and investment income. The rate ranges from 2.2% to 5.75% depending on your income level. Delaware also taxes corporate income, and the state is known for having favorable corporate tax laws, which is why many companies incorporate there.

Property owners in Delaware pay property tax to their county or municipality. The rate varies by location but is generally moderate compared to other states. Delaware also charges tax on gasoline, cigarettes, and alcohol — these are excise taxes, not sales taxes, but they add to the final price you pay.

Online purchases shipped to Delaware

If you order something online from an out-of-state retailer and have it shipped to Delaware, you typically will not owe sales tax. Most online sellers do not collect Delaware sales tax because the state has none. Some large retailers may collect sales tax anyway as a matter of policy, but they are not required to do so.

Delaware does not have a use tax that applies to items you buy elsewhere and bring into the state. This means you can buy something in Pennsylvania or Maryland, where sales tax applies, and bring it to Delaware without owing additional tax. However, if you are a Delaware resident who buys online from a seller in a state with sales tax, that state's tax may apply depending on where the seller is located and their tax collection policies.

How this affects your housing costs

If you are renting or buying a home in Delaware, the absence of sales tax does not directly reduce your rent or mortgage payment. However, it may affect the cost of home repairs and renovations. If you hire a contractor to fix your roof or renovate your kitchen, you will not pay sales tax on the materials or labor in Delaware, whereas you would in most other states.

Property tax, not sales tax, is what funds local schools and services in Delaware. Your property tax bill depends on your home's assessed value and your municipality's tax rate, not on sales tax revenue. Renters do not pay property tax directly, but landlords factor it into the rent they charge.

Frequently Asked Questions

Do I pay sales tax if I buy something in Delaware and take it home?

No. Delaware has no sales tax, so you pay only the price on the tag. This is true whether you live in Delaware or are visiting from another state.

What if I buy something online from a Delaware company?

You will not owe Delaware sales tax. However, if the seller has a physical location in your home state, your state may require them to collect sales tax on your purchase. This depends on your state's laws, not Delaware's.

Can I avoid sales tax by having things shipped to a Delaware address?

Some people use Delaware addresses for this reason, but it is not a reliable strategy. Most online sellers collect sales tax based on where you live, not where the package is shipped. Using a false address can create tax compliance problems in your actual home state.

Does Delaware tax groceries or clothing?

No. Delaware does not tax groceries, clothing, or most other retail goods. This is one of the broadest sales tax exemptions in the country.

If Delaware has no sales tax, why are prices sometimes higher there?

Prices vary based on local competition, rent, and operating costs — not just taxes. Some items may cost more in Delaware for reasons unrelated to sales tax. However, when you compare the final price you pay (including all taxes) for the same item in Delaware versus a neighboring state, Delaware is typically lower or equal.