Delaware Lodging Tax 8% and Short-Term Rental Tax 4.5%: Who Collects, the $25 Intermediary License and Local Add-Ons

Delaware taxes overnight accommodations through two distinct mechanisms: an 8% excise tax on hotels, motels, and tourist homes, and a newer 4.5% tax on short-term rentals. If you operate a lodging business or list a property for short-term rental in Delaware, you need to understand who collects these taxes, what the state license costs, and what local add-ons may apply to your revenue. This guide walks you through the structure, thresholds, and filing requirements.

The 8% Hotel, Motel, and Tourist Home Excise Tax

Delaware imposes an 8% excise tax on the rent of hotels, motels, and tourist homes. This is a statewide tax collected and remitted by the property owner, and it is not the same as the short-term rental tax that applies to other types of dwelling rentals. Understanding the definitions matters, because they determine which tax applies to your business.

What Qualifies as a Hotel, Motel, or Tourist Home

A hotel has at least 6 permanent bedrooms and is taxed under Delaware Code Title 30, Section 6102. A tourist home has at least 5 bedrooms with no guest cooking facilities and falls under the same tax code. A motel is subject to the same 8% rate. These definitions are specific and matter when determining your tax obligation. If your property does not meet these thresholds (for example, a single-family home rented out for a few months), it may fall under the short-term rental tax instead.

The 8% Tax Breakdown and Distribution

The 8% excise tax is split as follows:

• 5% to the General Fund
• 1% to Beach Preservation
• 1% to county convention and visitors bureaus
• 1% to the Delaware Tourism Office

If you operate a hotel, motel, or tourist home, you are responsible for collecting this tax from guests and remitting it to the Delaware Division of Revenue monthly. Tax returns are due by the 15th of the following month. The state charges 1% interest per month on late payments, which accumulates quickly if filing is delayed.

The 4.5% Short-Term Rental Tax (New as of January 1, 2025)

Beginning January 1, 2025, Delaware implemented a 4.5% tax on short-term rentals. This tax applies only to rental agreements executed on or after that date. Understanding what qualifies as a short-term rental, and just as importantly, what does not, is critical to knowing whether you owe this tax.

What Counts as a Short-Term Rental

A short-term rental is a dwelling rented for 31 consecutive nights or fewer under Delaware Code Title 30, Chapter 62. The key word is dwelling. This includes single-family homes, condominiums, apartments, and similar residential properties. It explicitly excludes hotels, motels, tourist homes, campgrounds, and other properties already covered by the 8% excise tax.

The Casual Rental Exception

A property owner is not required to pay the short-term rental tax if they rent their dwelling casually for 10 nights or fewer per year at well below market rent. This exception is designed to exclude occasional family or friend arrangements, not regular short-term rental operations. If you list your property on a platform like Airbnb or Vrbo for multiple stays per year, you do not qualify for this exception.

What Is Included (and Excluded) in Taxable Rent

The taxable amount is the rent itself. The tax does not apply to municipal taxes paid by guests, linen fees, cleaning fees, or insurance fees billed separately. If you charge guests $1,500 for a week's stay plus $100 for cleaning and $50 for linens, the 4.5% tax applies to $1,500 only, not the full $1,650.

The 4.5% Tax Breakdown and Distribution

Revenue from the short-term rental tax is distributed as follows:

• 62.5% to the General Fund
• 12.5% to Beach Preservation
• 12.5% to county convention and visitors bureaus
• 12.5% to the Delaware Tourism Office

This distribution differs from the hotel tax, with a larger allocation to the General Fund and smaller slices to tourism and beach preservation.

The Accommodations Intermediary License: $25 Per Year

Delaware distinguishes between who operates the rental and who collects and remits the short-term rental tax. This distinction is key to understanding your compliance obligations.

Who Must Obtain the License

An accommodations intermediary is any platform, booking agent, or property owner who directly collects payment from guests for a short-term rental. Common examples include:

• Airbnb, Vrbo, and similar platforms
• Property management companies that handle bookings and collections
• Individual owners who market and collect rent directly from guests

The intermediary is responsible for collecting the 4.5% tax from guests and remitting it to the Division of Revenue by the 15th of the month following collection (30 Del. C. 6204). To do so legally, the intermediary must obtain an annual accommodations intermediary license.

License Cost and Renewal

The license costs $25 per year and must be renewed by December 31 of each year. This is a flat annual fee, not a per-property or per-transaction fee. The license number must appear on every listing for a short-term rental, which is typically displayed on the platform or in the property description.

If You List Only Through a Licensed Platform

If you are a property owner who lists your home only through a platform like Airbnb (which holds its own accommodations intermediary license in Delaware), you do not need to obtain a separate intermediary license. Airbnb collects the tax from guests on your behalf. However, you remain responsible for reporting the rental income for income tax purposes. If you have multiple listings across different platforms, or if you also collect rent directly from guests outside any platform, you must obtain your own license and handle tax collection.

Late Payment and Non-Compliance Penalties

If you fail to collect, remit, or renew your license on time, penalties are severe. Late tax payments incur a 5% penalty per month, plus 0.5% interest and an additional 1% per month for non-payment, accumulating up to a maximum of 25%. These penalties are separate from any audit adjustments or interest the Division of Revenue assesses.

Tax Rates and License Fees at a Glance

Delaware also collects annual occupancy license fees from hotels, motels, tourist homes, and RV parks, in addition to the percentage-based excise taxes. These are annual license fees, not percentage-based taxes:

Property Type	License Fee Structure
Hotel	$25 per room and $30 per suite
Motel	$25 per room
Tourist Home	$15 per room
RV Park	$10 per space
Short-Term Rental Intermediary	$25 per year (flat)

For hotels and motels, these fees are in addition to the 8% excise tax collected monthly. For short-term rental intermediaries, the $25 license fee is separate from the 4.5% tax obligation.

Local Add-On Taxes and Beach Preservation District Fees

Several Delaware municipalities and counties impose additional taxes on rental income beyond the state short-term rental tax and hotel excise tax. These are not mandatory statewide but are levied locally. If you operate in one of these areas, your total tax burden is higher than the state rate alone.

Bethany Beach

Bethany Beach imposes a 7% tax on gross rental income from short-term rentals. This is in addition to the 4.5% state short-term rental tax, bringing the combined state and local rate to 11.5% in Bethany Beach. Check the Bethany Beach town website for current rates and any exemptions.

Ocean View

Ocean View levies a 6% tax on gross rental receipts, effective January 1, 2025. Like Bethany Beach, this stacks on top of the state rate, bringing combined taxes to 10.5% in Ocean View.

Dewey Beach and Lewes

Check with Dewey Beach and Lewes about any local lodging or rental tax. Confirm current rates and thresholds with each town directly, as these can change annually and vary based on property type and rental duration.

New Castle and Sussex Counties

Delaware Code Title 9, Section 8112 allows New Castle and Sussex counties to levy up to 3% in local tax on short-term rental income in unincorporated areas. Not all areas exercise this authority, and rates vary. Contact your county assessor or revenue office to confirm whether your property is subject to county-level rental tax. This county authority applies only to unincorporated areas.

Payment and Compliance

When and Where to File

Tax returns and payments for both the 8% hotel excise tax and the 4.5% short-term rental tax are due to the Delaware Division of Revenue. For hotels, motels, and tourist homes, returns are due by the 15th of the month following the rental month. For short-term rental intermediaries, the tax collected for each month is due by the 15th of the following month.

File with the Division of Revenue online through the Delaware One Stop portal at https://onestop.delaware.gov or visit https://revenue.delaware.gov/ for detailed filing instructions, forms, and payment options.

Records You Must Keep

Maintain detailed records of every rental, including the dates, guest name (if applicable), rent received, and any fees charged separately. Keep guest agreements that show the rental start and end dates, as these determine whether the 4.5% short-term rental tax applies (agreements executed on or after January 1, 2025) or another tax regime applies (hotel excise tax, for example).

Multi-Jurisdiction Compliance

If you operate properties across multiple Delaware municipalities or counties, you may owe multiple local taxes in addition to the state rate. For example, a property owner with rentals in both Bethany Beach (7% local) and an unincorporated area in Sussex County (potentially 3% county) must track and remit taxes to multiple jurisdictions. Failing to separate and remit local taxes can lead to serious compliance issues.

Common Questions and Edge Cases

Am I Taxed if I Rent My Home 10 Days a Year or Fewer?

No, if you rent at well below market rent. The casual rental exception applies only to properties rented 10 nights or fewer per year. If you rent frequently or at market rates, the short-term rental tax applies.

Do I Owe Tax if I Own a Home Rented Long-Term (More Than 31 Days)?

No. The short-term rental tax applies only to rentals of 31 consecutive nights or fewer. Long-term residential rentals (leases of 32 days or longer) are not subject to the short-term rental tax, though they may be subject to other income and property taxes.

What if My Platform Collects the Tax for Me?

If you list through Airbnb, Vrbo, or another platform that holds a Delaware accommodations intermediary license, the platform collects and remits the tax on your behalf. You do not need your own intermediary license for that particular listing. However, always verify the platform's license status and confirm it is remitting Delaware taxes correctly.

Disclaimer and Professional Guidance

This resource is informational and provided to help you understand Delaware's lodging and short-term rental tax structure. It is not legal or tax advice, and it does not constitute a substitute for consultation with a qualified Delaware tax attorney or certified public accountant. Tax law changes, municipal ordinances are updated regularly, and your specific situation may involve complexities not covered here.

Before launching a rental operation or making tax decisions, consult with a professional who can review your property type, location, and rental model and advise you on compliance with all applicable Delaware state and local taxes. The cost of professional guidance is far less than the penalties for non-compliance.

Official Resources

• Delaware Division of Revenue: https://revenue.delaware.gov/
• Delaware One Stop (Business License and Tax Filing): https://onestop.delaware.gov
• Delaware Lodging Tax Code (Title 30, Chapter 61): Consult the Delaware Code for precise statutory language.
• Short-Term Rental Tax Code (Title 30, Chapter 62): Consult the Delaware Code for precise statutory language and updates.
• Accommodations Intermediary License (Title 30, Section 6203-6205): Required for entities collecting short-term rental tax.