What landlords need to know about the short-term rental tax in Delaware.

As a landlord of short-term rentals in Delaware (31 nights or less), you need to be aware of the tax on short term rentals. Taxes imposed on hotel stays in Delaware and that has now been expanded to all short-term rentals. This applies to the rental of a house, condominium, houseboat, trailer, or other residential dwelling unit where a tourist or transient guest rents sleeping or living accommodations This applies to all bookings, including platforms like Airbnb and Vrbo. This tax is collected from the guest by the owner of the property or the rental operator.

Key Rental Tax Details: State Tax Rate: 4.5% of the rent, applies to stays 31 nights or less.

• Tax Base: Applies to the rent amount. Generally, cleaning fees, security deposits, and insurance fees are excluded if they are not considered part of the rent.
• Collection: Owners or intermediaries (platforms like Airbnb/Vrbo) or property managers are responsible for collecting and remitting the tax.
• Local Taxes: In addition to the state tax, some municipalities and counties may have their own local lodging taxes. Please check with your municipality and/or county. This is especially true in beach areas.
• The tax must be collected no later than the final payment of rent.
• If a stay is cancelled, the tax collected for the cancelled portion should be refunded.
• The tax collected must be reported and paid to the Delaware Department of Finance by the 15th of the month following the collection. Beware of penalties for non-payment or late payment.

You must be licensed by the Division of Revenue, you are required to obtain an accommodations intermediary business license – current cost $25.00.