Delaware, like most states, uses sales and use tax to raise state revenue. Businesses selling products and services in this state need to first file for a Delaware sales tax license. They then get a state tax ID number. The businesses then use the number when collecting tax from customers and then sending the sales taxes and Delaware tax returns to the Delaware Department of Finance Division of Revenue.
Step 1:
First, you generally need to register a Delaware business with the Department of State Division of Corporations. The state has an explanation of which business entities must file with the Delaware Division of Corporations on its “How to Form a New Business Entity” web page at corp.delaware.gov/howtoform.shtml. In short, virtually all business organizations can file at the state level except sole proprietorships. Read that page and then file your Delaware business, if necessary, with the Delaware Department of State.
The reason you want to register a Delaware business with the Department of State first is because you will choose a business name. You then use that name when registering for Delaware sales tax, use tax and other business taxes.
Step 2:
Complete an application for a federal employer identification number if your business needs this EIN number. A federal EIN number exists for the purpose of identifying companies that have employees. However, nonprofit organizations and some other businesses without workers must also get an EIN. Go to the IRS.gov website so you can search there for “EIN registration.” Read the explanations and apply for an EIN if you need one.
Register for a Delaware sales tax license and tax ID number. Now, this is where Delaware differs than most states. Instead of the typical sales tax on each consumer purchase, the Delaware gross receipts tax is a business tax levied on the gross receipts of businesses operating in the state of Delaware. It does not directly raise the price of goods to the consumer in the checkout line. Rather, businesses need to keep this money in the bank and pay it to Delaware on a regular basis.
To register for this Delaware gross receipts tax and other Delaware business taxes, you need to use a combined business registration form. The most convenient way to do this is through the Delaware One Stop Business Registration and Licensing System at https://onestop.delaware.gov/osbrlpublic/Home.jsp. You may also use a paper form by going to revenue.delaware.gov/services/current_bt/cra.pdf. After registering, you will receive a Delaware tax ID number for gross receipts tax, withholding, unemployment, etc.
Step 4:
View the tutorials on paying gross receipts taxes in Delaware. The Department of Finance Division of Revenue tells you how to do this on its online tutorials page at revenue.delaware.gov/tutorials.shtml.
Step 5:
Use the information in the tutorials to file your Delaware sales taxes (gross receipts taxes) online. As always, keep tabs on this and file before the deadline dates to avoid penalties on your Delaware sales taxes.
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