Educational information only, not tax advice. Rules and figures change — confirm your situation with a qualified Delaware tax professional before filing.
Delaware · USA · Short-term rental taxes
Short-Term Rental Taxes in Delaware
Short-term rental taxes in Delaware: a 4.5% state lodging tax on stays of 31 nights or less since 2025, beach-town rental taxes in Rehoboth and Dewey, and Delaware income tax of up to 6.6% due April 30.
The 30-Second Answer
- Short term rental taxes in Delaware start with the 4.5% state Short-Term Rental Lodging Tax — it applies to rent for stays of 31 consecutive nights or less under agreements made on or after January 1, 2025, and cleaning fees are excluded from the taxable rent.
- Platforms collect it for you: Airbnb, Vrbo, Booking.com and other accommodations intermediaries must collect and remit the 4.5%. If you rent directly, you need a Delaware business license and file monthly by the 15th through the Delaware Taxpayer Portal.
- Beach towns add their own tax: Rehoboth Beach charges a 7% rental tax on owners (filed annually by February 15) and Dewey Beach a 3% accommodations tax (due April 15 and October 15).
- Income tax: net rental profit is taxed federally on Schedule E or C and by Delaware at graduated rates of 2.2% to 6.6% (6.6% from $60,000). The Delaware return is due April 30, 2027 for tax year 2026.
Deductions
What Delaware STR Hosts Can Deduct
Ordinary and necessary rental expenses reduce your federal taxable income, and because Delaware starts from federal AGI they flow through to your Delaware return too.
Owners who also use a beach house themselves must split expenses between rental and personal days under IRC §280A. The 4.5% state lodging tax you collect from guests is not your income — do not deduct it if the platform remitted it.
Filing Calendar
Key Dates & Filing Calendar
The state lodging tax runs monthly, beach towns set their own dates, and Delaware's income-tax deadline is two weeks after the federal one.
Beach-town calendars differ: Rehoboth Beach's 7% rental tax is filed once a year by February 15, and Dewey Beach's 3% accommodations tax is paid by April 15 (October–March stays) and October 15 (April–September stays).
Delaware Division of Revenue — Short-Term Rental FAQs and PIT-RES instructions (revenue.delaware.gov)
Federal & State Tax Treatment
Passive Rental vs. Active Business: Which Applies to Your Delaware STR?
Delaware conforms to federal AGI, so the federal Schedule E vs. Schedule C choice drives both your IRS and your Delaware bill.
Passive Rental — Schedule E
The default for most vacation rental owners
- Report rents and expenses on Schedule E (Form 1040) when your average stay is over 7 days, or you provide no substantial services.
- Net losses are passive; the $25,000 active-participation allowance phases out between $100,000 and $150,000 of modified AGI.
- Building depreciated over 27.5 years; no self-employment tax on net rent.
- Net rent flows into Delaware taxable income, taxed at 2.2%–6.6%.
No income ceiling; passive-loss limits apply
Active Business — Schedule C
Only when you provide substantial services
- Use Schedule C when the average stay is 7 days or less and you provide substantial services (daily housekeeping, meals, concierge).
- Net profit carries 15.3% self-employment tax on earnings up to the 2026 Social Security wage base of $184,500 (2.9% Medicare above it).
- Losses can offset other income if you materially participate; the QBI deduction (up to 20%) may apply.
- Delaware taxes the same net profit at its graduated rates; there is no separate Delaware self-employment tax.
No ceiling; self-employment tax applies to net profit
Depreciation
Depreciation for Delaware STR Properties
Depreciation is usually the largest non-cash deduction for a vacation rental — but Delaware no longer follows the full federal bonus write-off.
| Asset | Typical write-off period | Notes |
|---|---|---|
| Residential rental building | 27.5 years (straight-line) | Land is not depreciable — split the purchase price between land and building. |
| Furniture, appliances, linens | 5 years (MACRS) | Federal 100% bonus depreciation is permanent for property acquired after January 19, 2025. |
| Decks, fencing, driveways | 15 years (MACRS) | Land improvements; cost segregation can identify them. |
| Delaware bonus depreciation | 20% (2026), 0% (2027+) | HB 255: individuals add back federal bonus above these limits for property placed in service after December 31, 2025. |
Because of the Delaware add-back, keep a separate state depreciation schedule for assets placed in service from 2026 onward.
On sale, depreciation claimed is recaptured federally at up to 25% (unrecaptured §1250 gain), and the gain also flows into Delaware taxable income.
Lodging Tax
Delaware Lodging Tax: State + Beach-Town Layers
Every vacation rental stay of 31 nights or less owes the 4.5% state lodging tax; some beach towns layer their own rental or accommodations tax on top.
The Division of Revenue administers the state tax. Municipal short-term rental taxes are separate and collected by each town — the two beach-town examples below are the best-known.
4.5% state; 11.5% with Rehoboth Beach's rental tax
Delaware Division of Revenue — Short-Term Rental FAQs; City of Rehoboth Beach; Town of Dewey Beach Code ch. Accommodations Tax
| Booking type | Who collects & remits | What it means for your books |
|---|---|---|
| Airbnb / Vrbo / Booking.com booking | The platform, as accommodations intermediary, collects and remits the 4.5% state tax | Report gross rent as income; keep platform tax statements as proof the lodging tax was remitted |
| Direct booking | You collect 4.5% from the guest and file monthly by the 15th on tax.delaware.gov | Hold a Delaware business license and keep collected tax out of your income figures |
| Rehoboth Beach / Dewey Beach | Owner files with the town (Rehoboth annually; Dewey unless the platform remits for you) | A deductible expense when it comes out of your pocket rather than the guest's |
Rehoboth Beach also charges a separate 3% lodging tax on hotels. Other municipalities may have their own rules — check with your town hall before your first booking.
Platforms
Airbnb Tax in Delaware: How the Platforms Handle It
Delaware law makes booking platforms collect the 4.5% state lodging tax, while income reporting follows federal 1099 rules.
| Platform | Reports your income | Collects the local lodging tax | Annual earnings summary |
|---|---|---|---|
| Airbnb | Form 1099-K above $20,000 and 200 transactions; 1099-MISC for other payments of $2,000+ | Yes — the 4.5% state Short-Term Rental Lodging Tax on stays of 31 nights or less | Earnings and tax reports in the host dashboard |
| Vrbo / Booking.com | Form 1099-K at the same federal thresholds | Required by Delaware law as accommodations intermediaries — confirm the tax line on each booking | Payout statements in the owner / partner dashboard |
| Direct bookings | No third-party reporting; you report all income | No — you collect and remit the 4.5% yourself | Your own booking ledger |
Using Multiple Platforms?
Each platform applies the 1099-K threshold separately, so a host splitting bookings across Airbnb, Vrbo and direct guests may get no form at all — yet every dollar is still reportable on your federal and Delaware returns.
DAC7 / OECD Reporting (EU Rule — Does Not Apply in Delaware)
DAC7 is an EU directive and does not apply to Delaware hosts. In the US, platforms report host earnings to the IRS on Form 1099-K once 2026 payments exceed $20,000 and 200 transactions.
Airbnb Help Center — Delaware taxes (airbnb.com/help/article/3845); Delaware Division of Revenue — Short-Term Rental FAQs
Illustrative P&L: Schedule E vs. Schedule C
Example for a Delaware beach rental grossing $36,000 a year. Illustrative only — not tax advice.
Record-Keeping
Stay Audit-Ready: What to Keep and How Long
Good records protect you if the IRS, the Division of Revenue or your beach town asks questions.
| Keep | How long | Why |
|---|---|---|
| Booking records (dates, nights, rent, cleaning fees) | At least 3 years after filing | Proves which stays were 31 nights or less and separates taxable rent from excluded cleaning fees |
| Monthly lodging tax returns and payment confirmations (direct bookings) | At least 3 years | Division of Revenue audits; late filing costs 5% a month plus 0.5% monthly interest |
| Platform tax statements and 1099-Ks | At least 3 years | Shows the platform remitted the 4.5% so you are not asked to pay it twice |
| Rehoboth / Dewey rental tax filings and rental licence | At least 3 years | Town audits and licence renewals |
| Purchase documents and federal + Delaware depreciation schedules | Until 3 years after you sell | Delaware's bonus-depreciation add-back means your state basis differs from your federal basis |
From 2026 your Delaware depreciation can differ from your federal numbers, so keep two schedules — reconciling them years later is painful.
Estimator
Short-Term Rental Tax Estimator
Plug in your bookings and costs to see your likely taxable position.
Your Numbers
Total short-term-rental income, before costs.
Allowable running costs, mortgage interest, depreciation and platform fees.
Your top income-tax band, as a percentage.
Estimated tax owed
Income tax on your net rental profit at your marginal rate.
Illustrative estimate. A simplified model to orient you — it is not tax advice. Confirm your situation with a qualified local professional.
Sources & notes
Educational only, not tax or legal advice. Beach-town rates and the state lodging tax can change — verify with the Delaware Division of Revenue, your town hall and a qualified tax professional.
- Delaware Division of Revenue — Short-Term Rental FAQs — 4.5% rate from January 1, 2025, 31-night definition, excluded fees, intermediaries, business license, monthly filing, penalties. https://revenue.delaware.gov/short-term-rental-faqs/
- Delaware Division of Revenue — Tax Tips: Short-Term Rental Intermediaries — Owner using only a third-party intermediary is not an intermediary; 10-night exemption; 30 Del. C. ch. 62. https://revenuefiles.delaware.gov/TaxTips/Short_Term_Rentals_2025.pdf
- Delaware Division of Revenue — Personal Income Tax FAQs — Rates 2.2% to 5.55% under $60,000 and 6.60% from $60,000. https://revenue.delaware.gov/frequently-asked-questions/personal-income-tax-faqs/
- Delaware PIT-RES Instructions (tax year 2025) — Return due April 30; extension to October 15; no extension to pay; 0.5% monthly interest. https://revenuefiles.delaware.gov/2025/PITForms_Instructions/Instructions/PIT-RES_Instructions_2025-01.pdf
- Delaware Division of Revenue — HB 255 Technical Information Memorandum — Bonus depreciation decoupling for individuals: 20% in 2026, 0% from 2027. https://revenuefiles.delaware.gov/2025/TIMs/HB_255_TIM.pdf
- City of Rehoboth Beach — Lodging & Rental Taxes — 7% rental tax on owners (annual, February 15) and 3% hotel lodging tax. https://www.rehobothbeachde.gov/business-resources/business-other-licenses/lodging-rental-taxes/
- Town of Dewey Beach Code — Accommodations Tax — 3% on gross rental proceeds; due April 15 and October 15; Ordinance 855-2025 on intermediaries. https://ecode360.com/13769473
- Airbnb Help Center — Taxes Airbnb collects in Delaware — 4.5% Short-Term Rental Lodging Tax on the listing price, stays of 31 nights or less. https://www.airbnb.com/help/article/3845
- IRS — Understanding your Form 1099-K — Federal third-party reporting for payment platforms. https://www.irs.gov/businesses/understanding-your-form-1099-k
Questions
Frequently Asked Questions — Delaware STR Taxes
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