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Delaware Consumer Tax Laws

We all expect it when we go to buy just about anything. There's the price of the goods and the dreaded tax added on at the end. Consumer taxes tend to be higher for goods or services that the government thinks consumers should avoid, like liquor and cigarettes. But other goods, like gasoline, can get a heavy dose of taxes as well.

Gasoline taxes generally fund highway construction and maintenance, while sales tax revenue usually goes into the state's general fund. The actual amount of the tax per gallon varies based on a statutory formula. In general terms, Delaware consumer tax laws place a relatively high tax rate on cigarettes, which is used to raise money for state-wide use.

The basic provisions of Delaware consumer tax laws are listed below:

Sales Tax $75 annual fee plus 0.240% gross receipts Tit. 30 §2702
Cigarette Tax 12 mills per cigarette Tit. 30 §5305
Gasoline Tax per Gallon 23¢ Tit. 30 §5110
Use Tax 1.920% Tit. 30 §4302
Liquor Tax Beer $4.85 per barrel; Wine 97¢/gal.; Spirits <25% $3.64/gal., >25% $5.46/gal. Tit. 4 §§581
Gambling Tax NA

Note: Here the term "mills" means one one-thousandth of a dollar, so 10 mills = 10 one-thousandths of a dollar, or .01. State laws are constantly changing -- contact an attorney or conduct your own legal research to verify the state law(s) you are researching.  

Purpose of Consumer Sales Tax

Unlike income taxes, consumer taxes are directed at how a person spends their money rather than how much money they make. Consumer taxes in Delaware are a flat percent, not a graduated scale like income tax. This means that everyone pays the same percent, regardless of how much they spend. However, there are different tax percentages depending on the sale or item taxed. In addition to revenue raising, Delaware imposes taxes on certain items to discourage their purchase, and to pay for costs associated with that item.

Types of Consumer Taxes

There are two general forms of consumer taxes in Delaware. The type most people are familiar with is sales tax. Sales tax applies to most consumer sales in the state. However, there are some exceptions. The other form of consumer tax is excise tax. This is a tax on a specific item. The tax can be a flat rate per item, or it can be a percentage of the price, like a sales tax. Excise taxes are used to either discourage purchasing or using an item, or to help pay for expenses that are associated with it.

Sales Tax in Delaware

Delaware charges a $75 annual fee plus 0.240% gross receipts for sales tax. Note that counties and cities may have their own sales tax on top of the state sales tax.

If you would like to know more about consumer taxes, there are many Delaware tax attorneys who may be able to help. In addition to informing you about the law, they may be able to advise you about methods to avoid paying unnecessary taxes, while still staying within the bounds of the law.

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