For entrepreneurs evaluating Delaware as a business location in 2026, the tax landscape is a key factor. The absence of a general sales tax gives Delaware a competitive edge for consumer-facing businesses.
Tax Environment in Delaware
Since Delaware does not impose a general sales tax, there are no economic nexus thresholds for sales tax collection. However, businesses should be aware of other tax obligations such as gross receipts taxes, business income taxes, or industry-specific levies. The Delaware Division of Revenue provides guidance at https://revenue.delaware.gov.
LLC Formation in Delaware (2026)
Forming an LLC in Delaware costs $90 for the initial filing. An annual franchise tax of $300 is required to maintain good standing. Delaware imposes a state income tax, which affects pass-through LLC taxation.
The process involves filing Articles of Organization with the Secretary of State, obtaining a federal EIN, and registering for applicable state tax accounts.
Key Tax Rules
• Delaware has NO sales tax, making it unique among US states.
• The state is the most popular for LLC formation due to its business-friendly Court of Chancery.
• Gross Receipts Tax applies to businesses instead of sales tax.
• Annual franchise tax for LLCs is $300, due by June 1 each year.