Delaware is one of five states that do not impose a general sales or use tax.
Generally, sales of tangible personal property and services are NOT subject to a sales or use tax in Delaware.
However, Delaware is not a state void of taxes.
There are taxes imposed on lodging/room rentals and leasing receipts. In addition, there are license fees imposed on a variety of industries including contractors and manufacturers.
Next time you are in the market for some expensive jewelry – may want to consider buying in Delaware………NOT SO FAST! Even though the state of Delaware would not impose a sales tax on your purchase, as soon as you take the jewelry home to a state with sales and use tax, you will incur a use tax liability. Sounds tempting, but people have gone to jail for attempting to avoid sales and use taxes – See former Tyco CEO Dennis Kozlowski.
Stay tuned for more of Jeff's EYE ON series as he blogs about sales and use tax State by State.