Q.  Who needs to obtain a Delaware business license in the State of Delaware?

A.  Any person or entity conducting a trade or business in the State of Delaware is required to obtain a Delaware business license from the Delaware Division of Revenue. This includes entities located in Delaware who conduct their business outside the state. A business license must be obtained at the time business commences in Delaware. If you are unsure of whether or not you have substantial presence in Delaware to be subject to licensing and taxation, complete and submit our Nexus Questionnaire and the Delaware Division of Revenue will provide guidance: Nexus Questionnaire

 

Q.  Is getting a Delaware business license the only requirement for those conducting business in Delaware?

A.  No, depending on your business and where you live you may also be required to register with other local, state and federal entities.
In addition to registering with the Delaware Division of Revenue and obtaining a Delaware business license:

All businesses (except sole proprietors with no employees) must additionally register with the federal government and obtain an Employee Identification Number (EIN). Businesses can comply with federal requirements by contacting the Employer ID Numbers section of the IRS website.

Depending on where you are located in Delaware, your city and/or county may also require a city and/or county business license, in addition to a State of Delaware business license. Please contact your local government offices for more information about local requirements.

Businesses with employees must additionally register with the Delaware Division of Unemployment Insurance and the Delaware Office of Workers Compensation

Corporations, Partnerships, Limited Liability Companies, etc who conduct business in Delaware must additionally register with the Delaware Division of Corporations.

Certain professions must additionally register and obtain a license with the Delaware Division of Professional Regulations. Please visit the Division of Professional Regulations for a list of applicable professions.

 

Q.  How do I obtain a Delaware business license from the Division of Revenue?

A.  Complete your registration online using the One Stop Business Licensing and Registration Service. This service will allow you to register simultaneously with other state and federal entities.

 

Q.  How long does it take to receive a Delaware business license?

A.  Most businesses receive their Delaware business license within a month of registering with the Delaware Division of Revenue.

Licenses can be obtained using the  One Stop Business Licensing and Registration Service,  and you may print a temporary license at the end of the registration or renewal process. Permanent licenses are generally sent within 10 working days.

 

Q.  How do I renew a Delaware business license?

A.  There are two ways to renew a Delaware Business License:

Renew your license online using Revenue’s Online Renewal   or through the portal at tax.delaware.gov

Q.  Do I have to pay the full fee if I start in the middle of a year?

A.  Most licenses are proratable for the first year of activity. You may contact one of the Delaware Division of Revenue’s Public Service Offices for your specific license fee amount due.

 

Q.  How long does my business license last?

A. Generally, most Delaware business licenses are good for one year and expire each December 31st. Three-year business licenses expire on December 31st of the third year.

After the first year of being licensed in Delaware, a business may opt, but is not required, to obtain a three-year Delaware business license, decreasing paperwork and mitigating the opportunity for license-renewal oversight.

The cost of a three-year Delaware license is not discounted; businesses will pay three times their regular yearly license fee for a three-year license.

Businesses will receive one license document for all three years.

You can also renew your Delaware business license online using our Online Renewal or through the portal at https://tax.delaware.gov

Q.  What if I need a Delaware business license right away?

A.   One of the benefits of online business registration and renewal is that Temporary Delaware Business Licenses can be obtained and printed right from your desktop computer.

If you are obtaining a Delaware business license for the first time, please access Delaware’s One Stop Business Licensing and Registration Service. This service will allow you to register and print a temporary license.

If you already have a Delaware business license and need to renew, you may complete an Online Renewal   or through the portal at https://tax.delaware.gov . Revenue’s online renewal will allow you to print a temporary license.

You may also obtain a temporary license in person at one of our Public Service Offices.

Permanent licenses will be subsequently mailed.

 

Q.  Do I still need a State of Delaware license if I have a Professional Regulation License or Child Care License?

A.  Yes, a State of Delaware business license is needed in addition to any professional licenses. Please visit the Division of Professional Regulations to see which professions require additional licensure.

 

Q.  When do business licenses expire? Do I have to renew them each year?

A.  All Delaware business licenses expire on December 31st of each year or December 31st of the third year for 3-year licenses. Business Licenses for the forthcoming year are required to be renewed no later than December 31st of the proceeding year.

There are two ways to renew a Delaware Business License:

Renew your license online using Revenue’s Online Renewal or through the portal at https://tax.delaware.gov

 

Q.  Will I receive a renewal reminder?

A.  The Division of Revenue will send renewal coupons each year for one year licenses and every three years for those licensees who have opted to renew for three years. However, if you fail to receive a renewal coupon by December 1st, please contact one of our Public Service Offices for assistance in renewing your license prior to the December 31st expiration.

You may also renew online using our Online License Renewal.

 

Q.  What do I need to consider or obtain prior to registering my business with state and federal entities?

A.  You will want to consider what type of entity your business will be. For example, will you register your business as a sole proprietorship, a partnership, a corporation or a Limited Liability Company?

Please note that the Division of Revenue cannot assist you with this choice. If you are unsure how you should register, you may need to contact an accountant, a lawyer or Delaware’s Small Business Administration for assistance. Also, please visit Step 1: Determine Your Business Type on the Delaware Division of Revenue website.

 

Q.  May I Transfer my Business License to a New Owner?

A.  A business license may not be transferred from one owner to another. New owners of a business must apply for their own business license by completing a new license application (Form CRA) via OneStop.

 

Q.  Do I Need a New Business License if I Change my Legal Entity?

A.  Any change of legal entity (i.e., sole proprietorship to corporation, etc.) requires a new business license. It is the responsibility of the business owner to advise the Business License Department that the former legal entity is “Out of Business”.

 

Q.  What other tax requirements will I have to meet?

A.   Delaware does not impose a state sales tax; however, Delaware does impose a tax on the gross receipts of most businesses. Gross receipts are the total amount received from the sale of goods or services sold by the business.

Gross receipts tax rates range from 0.1037% to 2.0736%, depending on your business activity.

If you have employees you are required to withhold State of Delaware “withholding tax” for each employee and submit this to the Delaware Division of Revenue. To register as a withholding agent, complete Part B of the CRA form via OneStop.

Please access our Withholding Guide for more information.

Depending on your entity type, you may have an income tax return obligation as well. Sole Proprietors report business income on their individual tax returns. Partnerships report income on a partnership return. Corporations report income on a corporation return.

For more information on business licenses, please contact the Delaware Division of Revenue’s Business Master File at (302) 577-8778. Our customer service representatives will provide you with detailed information and answers to your specific tax questions.