The already positive business climate in Delaware has grown to be even more beneficial for businesses—we recently received a friendly postcard from the Delaware Division of Revenue announcing that as of January 1, 2014 the Gross Receipts Tax lowered for many different business groups.
So what does this mean for a business owner in Delaware? Here’s an example:
A successful photographer in Delaware who grosses, say, $2 million annually, would have previously had to pay a .004023 Gross Receipts Tax rate. Now, thanks to the new Delaware reduction, they only have to pay a .003983 tax rate. Let’s break this down in dollars: previously, the photographer was paying $402.30 in Gross Receipts Tax per month. Now he only pays $398.30. That is a $4 difference…per month! Yes, that’s 4 / 100,000ths of savings!!! Not impressed by this savings? I’ll bet that photographer is. This savings might pay for a battery to power a camera each month. To see how the decrease in tax rate directly affects your specific business group, you can click here.
Delaware really gets it. They understand that owning a business is not simple, nor cheap, and no matter how minuscule, this .004% Gross Receipts Tax reduction could really benefit business owners. One thing to note is that for most business categories in Delaware, the Department of Revenue gives you your first $100,000 of gross income tax free each month. So if this Delaware photographer keeps under $1 million a year in gross receipts, this Delaware entrepreneur could, in theory, not pay any Gross Receipts Tax. Good for Delaware for championing the entrepreneur in a time when so many states and the federal government want to tear down small business and capitalism.
If you still have questions about decrease in the gross Receipts Tax or about how to file, the Delaware Gross Receipts Department can be reached here: [email protected]. While the decrease may seem small, we at Northwest Registered Agent are proud of any state for lowering taxes. Now just slide that decimal over a few more spots and add a couple more zeroes next time!