Delaware Taxes

Delaware taxes personal income at graduated rates: from 2.2% up to 5.55% on taxable income under $60,000, and 6.60% on income of $60,000 or over, according to the Division of Revenue — so no one needs more than 6.6% withheld for Delaware. Social Security and Railroad Retirement benefits are not taxable in Delaware and are left out of taxable income. Delaware has no state or local sales tax.

Delaware's state fuel excise tax is $0.23 per gallon on motor fuel — gasoline, gasohol and aviation gasoline — and $0.22 per gallon on special fuel, meaning all other fuels put into a licensed motor vehicle in Delaware, including diesel. E-85 (85% ethanol) is treated as a special fuel and taxed at 22 cents per gallon; jet fuel is taxed at $0.05 per gallon. The tax is calculated on gross gallons and reported by fuel suppliers to the Division of Motor Vehicles. These are state rates only.

No sales-tax holiday — Delaware does not impose a state or local sales tax at all (it levies a gross receipts tax on businesses instead), so there is no sales tax for a holiday to waive.

Delaware property tax is billed locally through the three counties — New Castle, Kent and Sussex — whose offices handle assessments and the senior credit applications; bills include school property taxes, and amounts vary by county and district. Homeowners 65 or older can get a credit of 50% of regular school property taxes, up to $500, on their primary residence only. Under HB 99 (signed July 17, 2017), anyone who established Delaware domicile on or after January 1, 2018 must have been domiciled in Delaware for at least 10 consecutive years to qualify. You must pay your property tax bill in full by the end of each tax year to get the credit for the next year; the application deadline is April 30, and each applicant needs a valid driver's license or official state ID.