To work as a contractor in Delaware, you need a contractor’s license from the Division of Revenue before you sign a contract to perform construction labor in the state. The license costs $75, runs on a calendar year, and is only issued once you’ve shown proof of workers’ compensation coverage, filed a certificate of notice with the Department of Labor, and (if you’re based outside Delaware) posted a surety bond. Meeting the Delaware contractor’s license requirements is not complicated, but the ongoing gross receipts tax and the penalties for skipping the paperwork catch people out.
Who Needs a Contractor’s License
Delaware defines “contractor” broadly. Under Title 30, Chapter 25, it covers any person, partnership, firm, corporation, or other entity that enters into a contract to perform labor, or to perform labor and provide materials, on a construction site in Delaware. Oral contracts count. Subcontracts count. Agreements with property owners and agreements with other contractors both count.1Delaware Code Online. Delaware Code Title 30 Chapter 25 – Contractors License Requirements and Taxes
So general contractors, subcontractors, and specialty trades all need the license. The statute does not carve out exemptions for small projects or for homeowners doing their own work. Trade-specific licenses for electricians, plumbers, and HVAC professionals are a separate matter with separate boards, and they sit on top of, not in place of, the Division of Revenue license.
The Three Prerequisites
The Division of Revenue will not issue your contractor’s license until you satisfy three conditions:1Delaware Code Online. Delaware Code Title 30 Chapter 25 – Contractors License Requirements and Taxes
- Workers’ compensation coverage. Submit a certificate of insurance showing active coverage, or a certificate from the Department of Labor showing you qualify as a self-insurer.
- Department of Labor certificate of notice. File a certificate confirming you have notified the Department that you have entered or will enter into construction contracts in Delaware.
- Bond, if you’re a nonresident. Resident contractors do not need a bond. Nonresident contractors must post one under §375 of Title 30 before the license is issued.
With those in hand, you pay the $75 fee and receive the license. If you plan to bid on a competitively bid contract over $50,000, you must have already initiated your license application before submitting the bid.1Delaware Code Online. Delaware Code Title 30 Chapter 25 – Contractors License Requirements and Taxes
How to Apply
The application runs through Delaware’s One Stop online portal, which registers your business with the Division of Revenue. Sole proprietorships, partnerships, LLCs, and corporations can all apply. You’ll need a Federal Employer Identification Number, or a Social Security Number if you’re a sole proprietor. If you have employees in Delaware, One Stop will also walk you through registering for unemployment insurance and a withholding tax account.2Delaware One Stop. Register and License Your Business to Operate in Delaware
Nonresident Contractor Bond
If you don’t regularly maintain a place of business in Delaware, you’re a nonresident contractor and must post a surety bond before the state will license you. The bond is 6% of the contract price on any contract of $20,000 or more. For cost-plus contracts, it’s 6% of the estimated cost-and-profit. When two or more contracts in a single calendar year add up to $20,000 or more, the bond covers 6% of that combined total. The Division of Revenue may accept a cash bond in place of a surety bond.3Delaware Code Online. Delaware Code Title 30 Section 375 – Furnishing of Bonds by Foreign Persons or Firms
One point worth being clear on: this bond does not protect your subcontractors or suppliers. It guarantees payment of your Delaware tax liabilities to the state. If you fall behind on your gross receipts tax, the state collects from the bond.3Delaware Code Online. Delaware Code Title 30 Section 375 – Furnishing of Bonds by Foreign Persons or Firms
Nonresidents who are current on bonding and tax obligations can request a certificate of compliance from the Division of Revenue for each specific project.3Delaware Code Online. Delaware Code Title 30 Section 375 – Furnishing of Bonds by Foreign Persons or Firms
Trade Licenses Are Separate
The Division of Revenue’s contractor’s license does not authorize you to perform electrical, plumbing, or HVAC work. Those trades are licensed by boards under the Division of Professional Regulation, each with its own exam, experience, and insurance requirements.
The Board of Electrical Examiners issues master, limited (residential work in buildings with four or fewer units), journeyperson, and apprentice licenses. The Board must approve your application before you can sit for the exam, which is based on the National Electrical Code adopted in Delaware and requires a score of at least 75%. Exams are administered by ProV in Wilmington, Newark, and Dover, or online through Examroom. Master and limited electricians must carry at least $300,000 in liability insurance.4Division of Professional Regulation. Examination – Division of Professional Regulation
The Board of Plumbing, Heating, Ventilation, Air Conditioning and Refrigeration Examiners, operating under Title 24, Chapter 18, issues master plumber, master HVACR, and master restricted HVACR licenses. A restricted license limits your practice to a specialty such as air conditioning, and applicants for a restricted HVACR license only sit the exam section for their specialty. Both boards require continuing education for renewal, and the plumbing and HVACR board updated its CE rules for the 2026 renewal cycle, so verify current requirements through the DELPROS online portal before renewing.5Division of Professional Regulation. Board of Plumbing, Heating, Ventilation, Air Conditioning and Refrigeration Examiners
The Monthly Gross Receipts Tax
The $75 license fee is only part of the cost. Every licensed contractor also pays a monthly gross receipts tax of 0.6472% on total receipts. Returns are due by the 20th of each month for the prior month’s receipts. You get a $100,000 monthly deduction, so you only pay on receipts above that threshold. Businesses under common ownership or control share a single $100,000 deduction across all entities.1Delaware Code Online. Delaware Code Title 30 Chapter 25 – Contractors License Requirements and Taxes
Monthly returns must include a certified statement on forms prescribed by the Department of Finance. Falling behind on these filings is one of the quickest routes to a suspended license.
Renewal
All Delaware business licenses expire on December 31 each year. Renew before that date to avoid a lapse. The Division of Revenue sends renewal coupons annually, but if you have not received yours by December 1, contact a Public Service Office. Not receiving a reminder is not a defense for a late renewal. Renewals can be filed online through the Division of Revenue’s tax portal.6Delaware Division of Revenue. Business Licenses FAQs
Workers’ compensation coverage must stay active continuously, and monthly gross receipts filings must stay current. Trade licenses under DPR boards renew on their own cycles with separate continuing education requirements.
Public Works and Prevailing Wage
If you’re taking on state-funded public projects, another layer applies. Delaware’s prevailing wage law covers new construction contracts over $500,000 and alteration, repair, renovation, or demolition contracts over $45,000. On covered projects, workers must be paid at least the prevailing wage rates the Department of Labor sets for the county where the work is done. The Department’s Office of Labor Law Enforcement predetermines the rates and reviews certified payroll for compliance; violations can lead to wage recovery and debarment from future public contracts.7Delaware Regulations. Delaware Administrative Code Title 19 – Prevailing Wage Regulations
Penalties for Working Without a License
The penalties are stiffer than most contractors expect, and they stack.
Failing to comply with the nonresident bonding requirements under §375 of Title 30 carries a civil penalty of up to $10,000 per occurrence. A willful or knowing violation is a misdemeanor with a fine of up to $3,000, imprisonment of up to six months, or both.3Delaware Code Online. Delaware Code Title 30 Section 375 – Furnishing of Bonds by Foreign Persons or Firms
Architects, engineers, and contractors who fail to report contracts with nonresident contractors within 10 days face the same structure under §2503: up to $10,000 civil penalty per occurrence, and up to $3,000 fine or six months’ imprisonment for willful violations.8FindLaw. Delaware Code Title 30 Section 2503
The workers’ compensation side is harsher still. If you had prior coverage and let it lapse, the civil penalty is three times your last annual premium. If you never had coverage, it’s three times the most expensive comparable policy premium in the state. Continuing uninsured after notice adds $10 per day per employee, with a floor of $250 per day. After 30 days in default, the state can go to court for an order barring you from doing business until you comply.9Delaware Code Online. Delaware Code Title 19 Chapter 23 – Workers Compensation
Beyond the fines, unlicensed contractors cannot enforce a contract in court if they were unlicensed when they entered into it. A client who refuses to pay for completed work may have a defense you can’t overcome. Without proper insurance in place, you can also be personally liable for injuries or property damage with no carrier to fund a defense or pay a judgment.