They should NOT tax them into failure with what is often the highest 'equivalent' personal income taxes in the Nation - 204. These firms have almost 70,000 employees making over $3.2B a year in payroll.ĭelaware Legislators should allow these small businesses to thrive and add high-paying jobs. Instead, please use the online GRT System to file immediately or to print a personalized paper return: File Your Gross Receipts Taxes Online. There are over 17,000 businesses in Delaware with fewer than 20 employees. Gross Receipts Tax Forms: Delaware no longer accepts most Gross Receipts Tax (GRT) coupons. The GRT is one of the horrible policy ideas that has kept Delaware's small businesses from growing or adding high-paying jobs. Previous CRI analyses of Delaware's economy have shown, using State and Federal data, that Delaware has been one of the worst economic performers in the Country for the last 20 years. Our special emphasis is on the tax implications of Delaware law, including matters of Delaware income, franchise, utility, property, gross receipts. These taxes are imposed at each stage of the production process, leading to tax pyramiding. Details on the convoluted nature of applying this tax can be reviewed on Delaware's Division of Revenue website. Gross receipts taxes are applied to a company’s gross sales, without deductions for a firm’s business expenses, like compensation and cost of goods sold. These percentage rates look small, but their impact, as demonstrated above, is enormous. Only five states still have GRTs, but of those five, Delaware's is the most convoluted, with 54 different tax rates ranging from 0.0945% to 0.7468%. Most states have recognized the destructive impact of imposing a gross receipts tax. GRT'īy the time a Delawarean is consuming a local brew at their favorite beer garden or restaurant, the GRT has hurt four small businesses.

During the pandemic, many small businesses were performing even worse than this.Ĭhart 1: Generic Income Statement 'No GRT vs. In this example, the business is barely profitable. This income statement assumes a 'Professional Services' firm with $150,000 per month in revenue (the first $100,000 is exempt from GRT), a GRT tax rate of 0.3983%, and a Personal Income Tax rate of 6.6%.

Chart 1 below is an example of a 'generic' income statement when a gross receipt tax is applied vs. Let's look into the mathematics of a small business income statement- it's necessary. This tax on Delaware's small business owners frequently creates 'the equivalent' of the highest Personal Income Tax rates in the Country because most small businesses are 'pass-thru' entities, meaning that the business owner pays the business's taxes at their personal income tax rate. So, why does Delaware still impose this tax when 45 other states have repealed it? A gross receipts tax (GRT) is a horrible public policy.

Gross receipts tax delaware