Hotel And Lodging Tax In Delaware 2026: TOT Rates By City

How Delaware's Hotel and Lodging Tax Works

Delaware has no general state sales tax, but it carves out a specific 8% excise tax on hotels, motels, and tourist homes under 30 Del. C. § 6102, plus a separate 4.5% state tax on short-term rentals created in 2024. Cities and Sussex County can add their own local lodging tax on top of either rate.

The dual state rate is the defining feature of Delaware's system: a traditional hotel or motel room is taxed at 8% under Title 30, Chapter 61, while a short-term rental booked for no more than 31 consecutive nights (a house, condo, houseboat, or similar unit rented through a platform like Airbnb or Vrbo) is taxed separately at 4.5% under the newer short-term rental lodging tax that took effect January 1, 2025. The law makes the "accommodations intermediary," meaning the booking platform, responsible for collecting and remitting that 4.5% tax, not the individual host.

On top of whichever state rate applies, a city or town, and in some cases Sussex County itself, may levy its own local lodging tax, so the total a guest pays depends on both the type of property and exactly where in Delaware it sits.

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Tax Rates and Extra Fees

Because Delaware runs two different state rates side by side, hotel/motel stays and short-term rentals in the same town often land at different combined totals, and in several beach towns the short-term rental total actually comes out higher than the hotel total.

Delaware doesn't add a separate tourism marketing district or business improvement district surcharge on top of these rates. Instead, the state builds tourism funding directly into the 8% hotel tax itself: by statute, 5% of gross rents goes to the General Fund, 1% to the Beach Preservation Program at the Department of Natural Resources and Environmental Control, 1% is split among the state's county convention and visitors bureaus, and 1% goes to the Delaware Tourism Office.

Local rates aren't limited to the beach towns. Wilmington and Dover, both well inland from the coast, each adopted their own local lodging tax through city ordinance, showing that Delaware's local-option authority extends statewide rather than only to tourist destinations.

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Collection and Remittance

The guest pays the tax as part of the room or rental charge, but for a traditional hotel, motel, or tourist home, the property operator is responsible for collecting the 8% state tax (plus any local tax) and remitting it monthly to the Delaware Division of Revenue.

For short-term rentals, the law shifts primary responsibility to the accommodations intermediary, the platform facilitating the booking, which must collect and remit the 4.5% state short-term rental tax on stays entered into on or after January 1, 2025. A host who books directly, outside a platform, still needs to register and remit the tax themselves.

Local lodging taxes are filed separately from the state tax, directly with the city, town, or Sussex County that levies them, so a property in a beach town with its own local ordinance is managing at least two separate filings each period rather than one combined return.

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Exemptions From Delaware's Hotel Tax

Delaware's long-stay exemption for traditional hotels, motels, and tourist homes is unusually long compared to most states: a "permanent resident" under 30 Del. C. § 6101 is an occupant who has occupied, or has the right to occupy, a room for at least 5 consecutive months, and that occupancy falls outside the definition of taxable "occupancy" entirely.

Short-term rentals follow a different rule. The 2025 short-term rental tax law defines a taxable short-term rental as one of no more than 31 consecutive nights, so a rental booked for 32 nights or more from the outset generally falls outside that tax's scope, well short of the 5-month threshold that applies to hotels. A property that assumes the standard "30 days" rule used in many other states applies uniformly in Delaware risks applying the wrong exemption to the wrong property type.

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Common Mistakes Hotels Make With TOT Compliance

• Applying the hotel exemption threshold to a short-term rental, or vice versa. Delaware's hotel/motel/tourist home exemption kicks in at 5 consecutive months, while the short-term rental tax's own cutoff is 31 consecutive nights; mixing up the two thresholds means either an early exemption on a hotel stay or a missed one on a long rental.
• Assuming the 8% state rate covers short-term rentals. Since January 1, 2025, short-term rentals are taxed at a separate 4.5% state rate, not the 8% hotel/motel/tourist home rate; a property still budgeting for 8% on rental income is either overcharging guests or misreporting revenue.
• Missing a local tax outside the beach towns. Because Wilmington and Dover both have their own local lodging taxes despite not being beach destinations, an operator opening a new property inland can overlook a local filing obligation that only exists in beach-market guidance.
• Treating the accommodations intermediary's remittance as covering every booking. A short-term rental host who also takes direct, off-platform bookings still owes the 4.5% state tax on those reservations even when the platform is handling everything booked through its own site.
• Not tracking Sussex County's separate county-level tax in unincorporated areas. A short-term rental just outside an incorporated beach town can fall under Sussex County's own lodging tax instead of, or in addition to, a town ordinance, and the two aren't interchangeable.
• Missing a rate change after a local ordinance amendment. Dover phased its lodging tax up from 0.5% to 1.5% over several years; a property that doesn't track incremental local increases like this can undercollect for a full filing period before catching the change.

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Where A PMS Fits Into TOT Compliance

None of this is about software resolving which state rate or exemption applies, it's about keeping Delaware's two-track system, 8% for hotels versus 4.5% for short-term rentals, straight across every property type a company operates. A property management system that supports separate tax codes by property classification makes it easier to apply the correct base rate plus any local add-on automatically instead of relying on staff to remember which track a given property falls under. Revenue reports filtered by date range help reconcile what was collected against the monthly state filing and any separate local filing, and a booking engine that shows the full, tax-inclusive nightly rate upfront avoids guest confusion in Delaware markets where a hotel and a short-term rental a block apart can carry noticeably different combined tax totals.

Frequently Asked Questions

1. Does Delaware have a statewide hotel tax rate?

Yes, but there are two of them. Delaware charges a statewide 8% excise tax on hotels, motels, and tourist homes under 30 Del. C. § 6102, and a separate statewide 4.5% tax on short-term rentals that took effect January 1, 2025. Cities and Sussex County can add their own local tax on top of either rate.

2. What is Delaware's hotel tax?

Delaware's hotel tax is an 8% state excise tax on the rent charged for a room in a hotel, motel, or tourist home, plus any local lodging tax the city or town where the property sits has adopted, such as Rehoboth Beach's 3% or Wilmington's 2%.

3. What is Delaware's lodging tax?

Delaware's lodging tax is the same charge as its hotel tax for traditional hotels and motels, but short-term rentals booked through platforms like Airbnb or Vrbo pay a separate 4.5% state lodging tax instead of the 8% hotel rate, plus whatever local short-term rental tax applies in that city or county.

4. Why does Delaware tax short-term rentals differently from hotels?

Delaware created a distinct short-term rental lodging tax, effective January 1, 2025, that taxes rentals of no more than 31 consecutive nights at 4.5% state-level, separate from the older 8% tax that applies to hotels, motels, and tourist homes. The result is two different state rates depending on the type of property.

5. Is there an exemption for long-term hotel stays in Delaware?

Yes, but the threshold is longer than in most states. A hotel, motel, or tourist home guest who occupies a room for at least 5 consecutive months qualifies as a "permanent resident" under Delaware law and falls outside the taxable definition of occupancy entirely, rather than the 30-day threshold common elsewhere.

6. Who collects Delaware's short-term rental tax?

The law places that responsibility on the "accommodations intermediary," meaning the booking platform facilitating the rental, rather than on the individual host, for any stay of no more than 31 consecutive nights booked on or after January 1, 2025.

7. How often do Delaware hotels need to file and pay lodging tax?

Hotels, motels, and tourist homes generally collect and remit the state's 8% tax to the Division of Revenue on a monthly basis. Local lodging taxes in cities like Rehoboth Beach, Wilmington, or Dover, and Sussex County's own tax, are filed separately from the state return, directly with that city, town, or county.