Thinking about starting or relocating a business? Delaware’s tax structure deserves a close look. Here’s a plain-English breakdown.

No sales tax — Zero. This applies to retail goods, online sales, services, and food. No collection burden and competitive pricing.

No tax on out-of-state income — If your Delaware-incorporated business earns revenue outside the state, Delaware doesn’t tax it.

No personal property tax — No taxes on equipment, machinery, or business vehicles.

Favorable corporate franchise tax — LLCs pay a flat $300/year. Corporation minimum is $175 using the Authorized Shares method.

What to watch out for — Delaware’s gross receipts tax (0.096% to 1.92% depending on industry) applies to total revenue, not profit. It’s small but can add up for high-revenue, low-margin businesses. Corporate income tax rate is 8.7% for businesses physically in Delaware.

The bottom line: for most small businesses, Delaware’s combined tax burden is significantly lower than NJ, PA, and MD. Consult a Delaware-based CPA — several firms offer free initial consultations.

Delaware’s reputation as a business-friendly state isn’t just hype — it’s backed by real advantages that make a measurable difference for entrepreneurs. Here are five reasons why the First State should be your first choice.

1. No Sales Tax — Delaware is one of only five states with zero sales tax. For retailers and service businesses, this means lower prices that attract customers from neighboring states and simplified bookkeeping.

2. The Court of Chancery — Delaware’s specialized business court with expert judges (not juries) resolves disputes faster and more predictably than any other state. It’s why over 60% of Fortune 500 companies are incorporated here.

3. Low Business Formation Costs — Filing an LLC costs as little as $90, and annual franchise taxes for small businesses are among the lowest in the country. Same-day filings are available.

4. Strategic Mid-Atlantic Location — Between New York, Philadelphia, Baltimore, and D.C., Delaware offers access to 40% of the U.S. population within a four-hour drive.

5. Strong Support Ecosystem — From Delaware SBDC to SCORE mentoring, the Delaware Prosperity Partnership, and programs like the Delaware Innovation Space, founders have deep resources.

We hear “shop local” all the time, but what does it actually mean for Delaware’s economy? The numbers might surprise you.

The Local Multiplier Effect
Studies show that for every dollar spent at a local business, approximately 67 cents stays in the local economy — compared to just 43 cents at a national chain. That extra money recirculates: local businesses hire local employees, use local vendors, and reinvest in the community.

Jobs, Jobs, Jobs
Small businesses employ over 200,000 people in Delaware — that’s nearly half of the state’s private workforce. When you choose a local restaurant over a chain, a neighborhood hardware store over a big box, you’re directly supporting your neighbor’s paycheck.

Tax Revenue Stays Home
Local businesses generate sales tax, property tax, and income tax revenue that funds Delaware schools, roads, parks, and emergency services. When spending shifts online or to out-of-state retailers, that revenue disappears.

Community Character
The unique shops and restaurants that line Main Street in Newark, Trolley Square in Wilmington, or the Boardwalk in Rehoboth — they’re what make Delaware special. Chain stores look the same everywhere. Local businesses reflect the personality and creativity of the community.

What You Can Do
Start small. Choose one meal, one purchase, one service per week from a local business. Share your favorite spots on social media. Leave positive reviews. Join your local business association. Every dollar is a vote for the community you want to live in.

Delaware’s small businesses are the backbone of our economy. Let’s make sure they thrive.

When people think of great places to start a business, Delaware’s corporate-friendly reputation precedes it. But beyond the Fortune 500 incorporations, the First State is quietly becoming one of the best places in the country for small business owners too.No Sales Tax – Delaware is one of only five states with no sales tax. For retailers and service providers, this means customers get more value and your business gets a competitive edge.Strategic Location – Sitting between Philadelphia, Baltimore, and Washington D.C., Delaware offers easy access to major metro markets. You are within a two-hour drive of 25% of the U.S. population.State-Level Support – Programs like the EDGE Grant Competition with up to $750K available show Delaware’s commitment to helping entrepreneurs succeed.Affordable Cost of Living – Compared to nearby metros, Delaware offers significantly lower costs for commercial real estate, housing, and everyday expenses.Tight-Knit Business Community – Delaware’s size is its strength. Chambers of commerce, business associations, and platforms like Delaware Thrive connect you with the people who matter.Ready to grow your business in Delaware? List your business on Delaware Thrive and connect with the local community today.