Delaware Short-Term Rental Tax Overview
Delaware imposes state income tax at rates up to 6.6% on net rental income, combined with Accommodations Tax at 8% on gross rental receipts. 8% state accommodations tax on transient lodging. The total tax burden for Airbnb hosts in Delaware varies by location, ranging from approximately 8% in Rehoboth Beach to 8% in Wilmington. Understanding the layered structure of federal, state, and local taxes is essential for compliance and accurate pricing.
This guide covers the 2026 tax year. Tax rates and rules change frequently — always verify current rates with the Delaware Division of Revenue and consult a qualified tax professional for advice specific to your situation. Federal tax obligations (Schedule E, Form 1099-K, the 14-day rule) apply in addition to all state and local taxes described below. See IRS Publication 527 for federal rental income rules.
Income Tax on Rental Income
Rate: 6.6%
Graduated rates from 2.2% to 6.6% on income over $60,000
- Net STR income (after expenses) reported on the Delaware state income tax return
- Federal Schedule E (or Schedule C if substantial services provided) is required regardless of state tax
- The 14-day rule: if you rent your primary residence 14 days or fewer per year, federal rental income is tax-free (IRS Publication 527)
- Self-employment tax may apply if you provide hotel-like services (daily cleaning, meals, concierge)
Accommodations Tax
Rate: 8%
8% state accommodations tax on transient lodging
What Airbnb Collects Automatically
- State accommodations tax (8%)
What Hosts Must Collect and Remit
- No additional local lodging taxes — Delaware does not allow county/city lodging taxes
Local Tax Rates by City in Delaware
Combined estimated occupancy/lodging tax rates including state + local components (income tax not included):
| City / Area | Local Tax Rate | Combined Rate | Registration Required? |
|---|---|---|---|
| Rehoboth Beach | 8% | 8% | Yes — town license |
| Dewey Beach | 8% | 8% | Yes — town license |
| Bethany Beach | 8% | 8% | Yes |
| Lewes | 8% | 8% | Yes |
| Wilmington | 8% | 8% | Yes |
Deductions for Delaware Airbnb Hosts
Delaware conforms to the IRC for most purposes and allows standard federal deductions for rental income. Delaware does not have a sales tax, and its relatively simple tax structure means fewer adjustments between federal and state returns. Depreciation follows federal MACRS rules, including bonus depreciation conformity. Delaware does not impose a corporate income tax on LLCs that do not have operations in the state, which benefits out-of-state investors who own Delaware LLCs for their rental properties.
Common Deductible Expenses
- Depreciation — Building cost over 27.5 years (IRS Publication 946); often the largest single deduction
- Mortgage interest — Deductible in proportion to rental use percentage
- Property taxes — Proportional to rental use days vs. personal use days
- Insurance — STR-specific or landlord insurance premiums
- Cleaning and maintenance — All turnover cleaning fees, repairs, and upkeep
- Supplies — Linens, toiletries, coffee, kitchen supplies for guests
- Platform fees — Airbnb host service fees (typically 3%) are fully deductible
- Utilities — Electricity, internet, water, gas proportional to rental use
- Professional fees — CPA, tax preparer, attorney fees related to the rental business
Filing Requirements and Deadlines
Registration
Required: Business License + Accommodations Tax Registration
Cost: $75 business license; accommodations tax registration is free
Register at: Delaware Division of Revenue
Filing Schedule
Monthly for accommodations tax; annually for income tax
Key Resources
Common Delaware Tax Mistakes for Airbnb Hosts
Mistake #1
Thinking Delaware has no taxes because it has no sales tax — Delaware imposes an 8% accommodations tax on STRs and income tax up to 6.6%, which many hosts overlook.
Mistake #2
Not obtaining a Delaware business license — all STR operators need a Delaware business license ($75) in addition to accommodations tax registration.
Mistake #3
Operating in beach communities without local permits — Rehoboth Beach, Dewey Beach, and Bethany Beach have their own rental permit requirements on top of state requirements.
Delaware Short-Term Rental Regulations Beyond Tax
Delaware does not have statewide STR-specific regulations. The state requires a business license and accommodations tax registration. Beach communities in Sussex County (Rehoboth Beach, Dewey Beach, Bethany Beach, Lewes) have their own rental licensing requirements, including safety inspections and occupancy limits. These beach towns generate the majority of Delaware's STR activity and are the most regulated. Inland Delaware has minimal STR-specific regulations.
Calculate Your Delaware Airbnb Tax
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Frequently Asked Questions
Does Delaware tax Airbnb income?
Yes. Delaware imposes an 8% state accommodations tax on gross rental receipts for stays under 30 days, plus state income tax at rates from 2.2% to 6.6% on net rental income. Delaware has no sales tax, but the 8% accommodations tax specifically targets lodging. The single state-level rate makes Delaware simpler than many states — there are no additional city or county lodging taxes to track.
Does Airbnb collect Delaware taxes?
Airbnb collects and remits the 8% Delaware accommodations tax automatically. Since Delaware does not have local lodging taxes, Airbnb's collection covers the full occupancy tax obligation. Hosts still must register with the Division of Revenue for accommodations tax purposes and obtain a Delaware business license.
Do I need a permit for Airbnb in Delaware?
You need a Delaware business license ($75/year) and must register for accommodations tax with the Division of Revenue. In beach communities like Rehoboth Beach, Dewey Beach, and Bethany Beach, you also need local rental permits with specific requirements for safety, parking, and occupancy. Contact your town clerk for local requirements.
Is Delaware a good state for Airbnb investment?
Delaware offers a moderate tax environment for STR operators: 8% occupancy tax (mid-range nationally) and no local lodging tax layers. The lack of sales tax is irrelevant for STRs (accommodations tax applies instead). Beach communities in Sussex County generate strong seasonal rental income from Memorial Day through Labor Day. The 6.6% top income tax rate is moderate. Delaware's business-friendly reputation and simple tax structure make it a reasonable STR market.
When are Delaware accommodations tax returns due?
Monthly. Returns are due by the 20th of the following month (e.g., January accommodations tax is due February 20). File through the Delaware Division of Revenue's online portal at dorweb.revenue.delaware.gov. Penalties for late filing include 5% per month on the unpaid balance plus interest. Annual income tax returns are due April 30 in Delaware (not April 15).