Delaware compliance for multi-vendor stores

Sales tax: Delaware has no state sales tax. - Practical effect: marketplace facilitator sales-tax collection rules (which exist in many states and require platforms to collect/remit sales tax) do not apply in Delaware because there is no state sales tax to collect. However, Delaware has other business-level taxes that commonly apply to sellers. 2) Gross Receipts Tax (GRT) — the primary state-level indirect tax sellers must watch in Delaware: - What it is: Delaware’s Gross Receipts Tax is a tax on the seller’s total gross revenues sourced to Delaware; it is levied on the seller (not the consumer). (See Delaware Division of Revenue GRT FAQ.) - Rates & treatment: rates vary by business activity (the Division of Revenue provides rate tables); exclusions/exemptions vary by activity. New businesses are generally set up as quarterly filers; established filers may be monthly or quarterly based on lookback periods. - Sourcing and nexus: sales where the customer takes possession in Delaware (including pickup or delivery in Delaware) can create Delaware-sourced receipts. Sales shipped directly out of state generally are not subject to GRT if you keep documentation of interstate shipment. Having inventory, employees, offices, or fulfillment in Delaware will create nexus and likely GRT (and other) obligations. - Filing & payments: GRT returns and payments are due monthly or quarterly depending on filer status; Delaware mandates online filing for GRT (portal). Penalties and interest apply for late filing/payment. - Practical consequence for marketplaces: unlike sales tax systems where marketplaces often collect sales tax for third-party sellers, Delaware’s GRT regime means sellers should not assume a marketplace platform’s collection (if any) relieves the seller of GRT obligations. Sellers must determine Delaware sourcing and register if required. 3) Delaware business license requirement: - Any person or entity conducting a trade or business in Delaware must obtain a Delaware business license from the Division of Revenue (OneStop portal / CRA registration). Licenses generally expire December 31 and renew annually (with some 3-year options). Obtaining a business license is a primary step when you begin business activity that reaches into Delaware. 4) Entity-level taxes and filings (Division of Corporations): - LLCs/LPs/GPs: These alternative entities do not file an annual franchise tax report but must pay an annual $300 tax (due on or before June 1 each year). Failure to pay triggers penalties and interest. (Corporations have separate franchise tax/annual report rules and deadlines; check Division of Corporations for franchise-tax methods, minimums, and due dates.) 5) Other obligations to check (common multistate issues for marketplace operators and sellers): - Employer obligations: if you have employees working in Delaware, you must register for withholding and unemployment/benefits as required. - Corporate income tax / apportionment: if you have Delaware-sourced income (beyond mere sales shipping out-of-state), you may have corporate income tax filing obligations. - Local business licensing: some local jurisdictions may have additional requirements. - Exemption documentation: maintain resale or wholesale exemption certificates (Form 373 for wholesale exemptions when applicable) and shipping records for interstate sales to substantiate nontaxable transactions. 6) Practical 10-step checklist for multi-vendor stores (marketplace sellers or operators) selling into Delaware: - Step 1: Determine whether you are conducting "business" or have Delaware-sourced receipts (inventory/fulfillment in DE, customers taking possession in DE, employees in DE, or significant Delaware sales). If unsure, submit Delaware’s Nexus Questionnaire or consult counsel/accountant. - Step 2: If you meet nexus / Delaware-sourced revenue, register with Delaware Division of Revenue using OneStop (complete CRA Combined Registration as needed) and obtain a Delaware business license. - Step 3: Register for Gross Receipts Tax accounts and determine filing frequency (monthly or quarterly). Start online filing at tax.delaware.gov (GRT portal). - Step 4: Track and document shipments and customer locations carefully (keep bills of lading, carrier tracking, and sales invoices) to support interstate transaction sourcing and nontaxable sales. - Step 5: If you are a wholesaler or making exempt sales picked up in DE, obtain and retain Form 373 or other required exemption documentation. - Step 6: Review whether marketplace facilitator/platform collection affects your reporting — do not assume marketplace collections eliminate seller GRT responsibility in Delaware; confirm allocation of reporting/filing responsibilities with the marketplace and tax advisors. - Step 7: If you have employees in Delaware, register for withholding and unemployment insurance, and comply with payroll reporting. - Step 8: For your entity: ensure Delaware Division of Corporations obligations are current — LLC/LP/GP $300 annual tax (due June 1), and corporations file annual report and franchise tax (due dates/amounts differ). - Step 9: Put bookkeeping and sales-tracking processes in place to separate Delaware-sourced revenue and to produce evidence during audits. - Step 10: Re-check obligations periodically (Delaware updates guidance and the tax/filing portal); consult a CPA or Delaware-registered agent when in doubt. Brief concluding recommendation: Delaware’s lack of sales tax simplifies one compliance dimension for multi-vendor stores, but Delaware’s gross receipts tax, business-license requirements, and entity-level taxes mean sellers cannot be complacent. Multi-vendor sellers and marketplace platforms should (a) confirm where Delaware-sourced revenue is created, (b) register and file for gross receipts tax and business license when required, (c) maintain exemption/shipping records, and (d) ensure entity-level filings and the $300 annual alternative-entity tax (for LLCs/LPs/GPs) are timely.

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