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Delaware
The Facts on Delaware’s Tax Climate
Last updated July 1, 2009.
Here are some basic facts on Delaware’s tax system and how it compares to other states:
Tax Freedom Day Arrives on April 11 in Delaware
Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2009, Delaware taxpayers had to work until April 11 (ranked 20th highest nationally) to pay their total tax bill, two days earlier than national Tax Freedom Day (April 13). The Tax Freedom Days of neighboring states are: Pennsylvania, April 14 (ranked 11th nationally); New Jersey, April 29 (ranked 2nd nationally); and Maryland, April 19 (ranked 5th nationally).
Full study of Tax Freedom Day, nationwide and in each state
Delaware's State/Local Tax Burden Slightly Below National Average
Estimated at 9.5% of income, Delaware's state/local tax burden percentage ranks 24th highest nationally, slightly below the national average of 9.7%. Delaware taxpayers pay $4,253 per capita in state and local taxes.
Delaware's State-Local Tax Burden, 1977-present
Other States' State/Local Tax Burdens
Historical Chart Comparing All States' State/Local Tax Burdens from 1977 to 2008
Delaware’s 2010 Business Tax Climate Ranks 8th
Delaware ranks 8th in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. The ranks of neighboring states were as follows: Pennsylvania (27th), New Jersey (50th), and Maryland (45th).
50-State Comparison of Business Tax Climates (data only)
2009 State Business Tax Climate Index, Sixth Edition (full study)
Delaware's Individual Income Tax System
Delaware's personal income tax system consists of six brackets and a top rate of 5.95% kicking in at an income level of $60,000. That top rate ranks 25th highest among states levying an individual income tax. In 2006, individual income tax collections were $1,272 per person, which ranked 8th highest nationally.
50-State Table of Individual Income Tax Rates
50-State Table of State Individual Income Tax Collections
50-State Table of State and Local Individual Income Tax Collections Per Capita
Delaware's Corporate Income Collections
Delaware's corporate tax structure consists of a flat rate of 8.7% on all corporate income. Among states levying corporate income taxes, Delaware's rate ranks 10th highest. In 2007, state-level corporate tax collections (excluding local taxes) were $352 per capita, ranking 3rd highest among states that tax corporate income.
50-State Table of Corporate Income Tax Rates
50-State Table of State and Local Corporate Income Tax Collections Per Capita and Per Household
50-State Table of State Corporate Income Tax Collections Per Capita
Delaware Levies Low Sales Tax; Gasoline Tax Higher Than National Average
Delaware levies a general sales or use tax at a rate of 1.92 percent, ranked 46th nationally and the lowest rate of all states that levy this particular tax. Delaware's gasoline tax stands at 23 cents per gallon (28th highest nationally), while its cigarette tax stands at $1.15 per pack of twenty (ranked 25th nationally). The gasoline tax was adopted in 1923, and the cigarette tax in 1943.
50-State Table of Sales and Excise Tax Rates
50-State Table of State and Local General Sales Tax Collections Per Capita and Per Household
50-State Table of State and Local General Sales and Gross Receipts Tax Collections Per Household and Per Capita
Delaware Property Taxes Among Nation’s Lowest
Delaware's local governments collected $ 626.90 per capita in property taxes during fiscal year 2006, which is the latest year available from the Census Bureau. Delaware is one of the 13 states that collect no state-level property taxes. Delaware’s per capita property tax collections rank 43rd nationally.
State property tax collections per capita by state
Federal Tax Burdens and Expenditures: Delaware is a Donor State
Delaware taxpayers receive significantly less federal funding per dollar of federal tax paid than the average state. Per dollar of federal tax collected in 2005, Delaware citizens received approximately $0.77 in the way of federal spending. This ranks the state 7th lowest nationally, even lower than in 1995 when Delaware received $0.85 per dollar of taxes in federal spending and ranked 9th lowest. Neighboring states and the amount of federal spending they received per dollar of federal taxes paid were: Pennsylvania ($1.07), New Jersey ($0.61), and Maryland ($1.30).
Comparing the amount of federal taxes sent to Washington with the amount of federal spending coming back to the state
