If you earn income from renting property in Delaware, the rental tax you owe depends on how long guests stay. Short-term stays trigger an 8% lodging tax under Title 30, Chapter 61 of the Delaware Code, collected from the guest and remitted monthly. Long-term rentals fall outside that lodging tax but owe Delaware’s gross receipts tax on the rental income instead. Both have their own deadlines, and interest starts running the day a payment is late.
The 8% Lodging Tax on Short-Term Stays
Delaware charges 8% of the rent on every short-term occupancy of a hotel, motel, or tourist home.1Justia Law. Delaware Code Title 30 Chapter 61 – Section 6102 Vacation properties rented through Airbnb, VRBO, and similar platforms generally fall under this tax.
“Rent” is defined broadly. It covers all consideration received for the occupancy, whether paid in cash, credit, property, or services, with no deductions.2Justia Law. Delaware Code Title 30 Chapter 61 – Section 6101 Mandatory cleaning fees rolled into the price are taxable. If you discount a stay, the 8% applies to what the guest actually pays. Municipal taxes are excluded from the base, so you don’t pay the state 8% on top of a local tax amount.3Division of Revenue – State of Delaware. Short-Term Rental FAQs
When a Guest Becomes a Permanent Resident
The lodging tax stops applying once an occupant qualifies as a “permanent resident,” meaning they reside in or have the contractual right to reside in the property for at least five consecutive months.2Justia Law. Delaware Code Title 30 Chapter 61 – Section 61014State of Delaware. Public Accommodations Tax Five consecutive months is the dividing line between taxable short-term occupancy and exempt long-term stays.
Who Collects the Lodging Tax
The operator collects the tax from the guest at the time rent is paid.5Delaware Code Online. Delaware Code Title 30 Chapter 61 – Lodging Tax For a traditional hotel, that means adding the 8% to the folio at the front desk.
For short-term rentals booked through a licensed accommodations intermediary such as Airbnb, VRBO, Booking.com, Expedia, or Tripadvisor, the platform itself collects and remits the tax. Owners who list only through those platforms don’t handle the lodging tax directly.3Division of Revenue – State of Delaware. Short-Term Rental FAQs
Renting directly to guests changes that. If you book stays yourself without going through a third-party platform, you have to collect and remit the 8% and obtain a Delaware accommodations intermediary business license, which costs $25.3Division of Revenue – State of Delaware. Short-Term Rental FAQs6State of Delaware Division of Revenue. Business Licenses FAQs7Delaware One Stop. Register and License Your Business to Operate in Delaware Most Delaware business licenses expire December 31 and must be renewed.
Monthly Filing Deadline and Late Interest
The lodging tax is filed monthly. Tax collected during a given month is due to the Department of Finance by the fifteenth of the following month.5Delaware Code Online. Delaware Code Title 30 Chapter 61 – Lodging Tax Tax on June stays is due July 15. Payments run through the Division of Revenue’s online taxpayer portal.8State of Delaware. Short-Term Rental Lodging Tax
Late payments accrue interest at 1% per month, or any fraction of a month, from the due date.5Delaware Code Online. Delaware Code Title 30 Chapter 61 – Lodging Tax Six months late is 6% on top of the original tax. Keep records of every booking: rent charged, fees, tax collected, and dates of occupancy. Those records back your monthly filings and matter if the state audits a return.
Gross Receipts Tax on Long-Term Rentals
Rentals that fall outside the lodging tax, including leases to permanent residents, still generate income subject to Delaware’s gross receipts tax. For commercial lessors, the rate is 0.3983% of rental income received, with the first $100,000 per month (or $300,000 per quarter) excluded from tax.9State of Delaware. Tax Tips for Commercial Lessor Conducting Business in Delaware
New businesses begin as quarterly filers. The Division of Revenue applies a look-back period to determine whether you continue quarterly or move to monthly filing. Quarterly returns are due by the last day of the first month after the quarter closes. Monthly returns are due by the twentieth of the following month.10Delaware Division of Revenue. Gross Receipts Tax FAQs
Long-term landlords sometimes miss this piece. The permanent-resident exemption removes the 8% lodging tax; it does not make the rental income tax-free. Smaller landlords may owe nothing after the monthly or quarterly exclusion, but the filing obligation still exists.
Local Taxes on Top of the State Rate
The state’s 8% does not replace any tax imposed by a Delaware municipality. If a local government charges its own accommodations or rental tax, that amount is collected and remitted separately to the municipality.3Division of Revenue – State of Delaware. Short-Term Rental FAQs Several Sussex County beach towns impose their own lodging taxes at varying rates, so an owner in one of those areas could face a combined burden well above 8%. Check with the municipality directly for the rate and registration process; the Division of Revenue handles only the state portion.
Properties the Lodging Tax Doesn’t Reach
The definition of “hotel” excludes charitable, educational, and religious institutions, children’s summer camps, hospitals, and nursing homes.2Justia Law. Delaware Code Title 30 Chapter 61 – Section 6101 Properties operated by those organizations fall outside the lodging tax regardless of the length of stay. Everything else that provides sleeping accommodations to transient guests is likely covered, and the safer assumption for a short-term rental owner is that the 8% applies until a specific exclusion or the five-month permanent-resident rule says otherwise.