The Tax Foundation

Tax Data

Delaware

The Facts on Delaware’s Tax Climate

Here are some basic facts on Delaware’s tax system and how it compares to other states:

Tax Freedom Day Arrives on April 14 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 2008, Delaware taxpayers had to work until April 14 (ranked 37th highest nationally) to pay their total tax bill, nine days earlier than national Tax Freedom Day (April 23). The Tax Freedom Days of neighboring states are: Pennsylvania, April 21 (ranked 18th nationally); New Jersey, May 7 (ranked 2nd nationally); and Maryland, April 28 (ranked 7th nationally).

Tax Freedom Day has been projected using the most up-to-date economic and budget projections from official government agencies. However, Tax Foundation estimates of average state and local tax rates for 2008 will not be released until later this spring as we await more up-to-date data from various government agencies.
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 2008 Business Tax Climate Ranks 9th
Delaware ranks 9th 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 (49th), and Maryland (24th).
50-State Comparison of Business Tax Climates (data only)
2008 State Business Tax Climate Index, Fifth 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 27th highest among states levying an individual income tax. In 2005, individual income tax collections were $1,108 per person, which ranked 9th 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 Per Capita Fourth Highest Nationally
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 12th highest. In 2006, state-level corporate tax collections (excluding local taxes) were $346.32 per capita, ranking 3rd highest among states that tax corporate income.
50-State Table of Corporate Income Tax Rates, 2000-2008
50-State Table of State and Local Corporate Income Tax Collections Per Capita and Per Household, 2005
50-State Table of State Corporate Income Tax Collections Per Capita, 2006

Delaware Levies No Sales Tax; Gasoline Tax Higher Than National Average
Delaware joins Oregon, New Hampshire, Montana, and Alaska as the only states that do not levy a general sales or use 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 23rd 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 and Gross Receipts Tax Collections Per Household and Per Capita, Fiscal Year 2005

Delaware Property Taxes Among Nation’s Lowest
Delaware's local governments collected $453,198,000 in property taxes during fiscal year 2004, which is the latest year available from the Census Bureau. Delaware is one of the 13 states that collect no state-level property taxes. When Delaware is ranked against other states' combined state-local property tax collections, meaning its per capita property tax collections equaled $546 for all levels of government in FY 2004, ranking it 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

Tax Data from The Tax Foundation