The rules where you work $17
A first 30 days checklist, everyday forms, licenses, workers’ comp and taxes for Delaware, with a yearly calendar. Instant PDF download.
Buy the packet: $17Digital product, all sales final. Informational only, not legal, financial, tax or business advice.
What Delaware expects from a new trade business
Delaware has no sales tax, but every contractor needs a state contractor's license from the Division of Revenue and pays a tax on gross receipts. You have to show proof of workers' comp to get that license. Lien rules are simple on paper, with no preliminary notice in the statute, but a homeowner who paid the contractor in full in good faith can wipe out your lien.
Every contractor needs a Division of Revenue license
Delaware's contractor license comes from the Division of Revenue, not a building board. The fee is $75 a year, plus a gross receipts fee. It covers anyone in the business of furnishing labor, or labor and materials, on construction, alteration or repair of real property, whether you're a general or a sub. The chapter's definition doesn't carve out handyman or small jobs. You need it before or when you sign the contract. It isn't a skills license. The Division says it doesn't show you're qualified for the work.
To get it, you also file a notice certificate from the Department of Labor and proof of workers' comp.
The licensed trades have their own boards: the Board of Electrical Examiners and the Board of Plumbing, Heating, Ventilation, Air Conditioning and Refrigeration Examiners. You can't provide electrical or plumbing services without their license, and a first plumbing offense is a fine of $1,500 to $3,000. Local permits are a separate question. A construction attorney can check what your town requires.
Source: 30 Del. C. ch. 25, contractors' license requirements · 24 Del. C. ch. 14, Board of Electrical Examiners · 24 Del. C. ch. 18, plumbing and HVACR board · Delaware Division of Revenue, contractors · 24 Del. C. ch. 14, subchapter II, electrical license required · 24 Del. C. ch. 18, subchapter II, plumbing license and penalty · Delaware Division of Revenue, Tax Tips for contractors (not a regulatory license)
Who to call: an attorney near you
Comp starts at one employee, and independent subs must be covered
Delaware's act applies to any employment with one or more employees. Your contractor's license also depends on showing proof of coverage.
Construction has a special rule. Independent contractors working for a contractor have to be covered too. Either they buy their own coverage or the contractor who hires them insures them. So an uninsured sub can land on your policy. Get a certificate of insurance or a notice of exemption from every sub and keep it 3 years. If you don't, you're treated as insuring that sub's comp claims.
Owners have choices. Up to 8 LLC members can be exempted by written agreement. A contractor's corporation is limited to 4 exempt executive officers. Sole proprietors and partners aren't covered unless they elect to be, but when they work as independent contractors in construction, they can't use that exception. Their immediate family members are covered unless they exempt themselves in writing.
An insurance agent who writes contractors can tell you how your subs affect your premium.
Source: 19 Del. C. ch. 23, sections 2306, 2308, 2311 · 30 Del. C. 2502, proof of coverage for license
Who to call: an insurance agent near you
Getting paid: 180 days or 120, and watch the final payment
Delaware's lien chapter lists no preliminary notice. The filing itself is the deadline:
- Direct contractors with an owner contract for labor and materials: file a sworn statement of claim within 180 days after completion. The statute also lists nine other start dates, such as your final invoice or the certificate of occupancy.
- Everyone else: file within 120 days after completing your labor or your last delivery. Or within 120 days after your final payment, with retainage, is due.
- Where: the Prothonotary of the Superior Court in the county. The claim has to top $25.
- Suing: the chapter sets no separate deadline after you file. The statement can serve as your complaint if you title it that way. Recovery is by scire facias. A judgment is what becomes the lien, so don't treat this as open-ended. A separate suit on the debt appears to have a 3-year limit.
- Owner's own residence: no lien if the structure is used solely as the owner's residence and the owner made full or final payment to the contractor in good faith. If not, the lien only reaches the unpaid balance, shared pro rata.
- Land-only work: no lien without a written contract signed by the owner.
An advance agreement to waive lien rights is void. A contractor who doesn't list everyone who furnished labor or materials within 10 days of the owner's demand can lose payments and lien rights. Before final payment on a home, the contractor owes a notarized certification or lien releases, or risks the license. A construction attorney can handle these filings.
Source: 25 Del. C. ch. 27, subchapter I, general provisions · 25 Del. C. ch. 27, subchapter II, enforcement in Superior Court · 10 Del. C. ch. 81, limitations on actions
Who to call: an attorney near you
No sales tax, but a gross receipts tax instead
Delaware has no sales tax. You don't collect it from customers. What you pay instead is a gross receipts tax on what you take in for construction work, materials included.
The statute sets the rate at 0.6472%, and the first $100,000 of receipts a month is excluded. That exclusion means a part-time operator may owe little or nothing, but you still file. If your receipts in the lookback period are $1,500,000 or less, you file quarterly with a $300,000 exclusion. Ask the Division of Revenue which schedule you're on. Payments to other licensed contractors can come off the top, when there's a written agreement stating the amounts and you report them on the state's form.
Companies under common ownership share a single exclusion. A CPA who works with contractors can set up your filings.
Source: 30 Del. C. 2501, 2502 · Delaware Division of Revenue, gross receipts tax FAQs
Who to call: a CPA or tax pro near you
LLC: $400 a year, even with no annual report
Forming an LLC with the Delaware Division of Corporations costs $110, and you need a registered agent in the state. There's no annual report, but there is an annual tax of $400, due June 1. That's up from $300 starting with tax year 2026, so the first $400 payment falls due June 1, 2027. Pay late and it's a $200 penalty plus 1.5% interest a month. That tax is owed regardless of how the year went.
Profit on a typical LLC lands on your personal return. Delaware's graduated income tax tops out at 6.6% on income of $60,000 and up. Whether an S-corp election helps is a numbers question for a CPA who works with contractors.
Source: Delaware Division of Corporations, alternative entity tax instructions · Delaware Division of Revenue, personal income tax FAQs · Delaware Division of Corporations, August 1, 2026 fee schedule
Who to call: a CPA or tax pro near you
Education, not legal or tax advice. Rules change. Confirm anything here with a licensed pro in Delaware before you rely on it. Last updated November 2026.