In addition, expansion of the state's tax base may complicate local enforcement efforts. The incentive for individuals to conduct their transactions in a manner that escapes local taxation is increased significantly with the application of the 8.0 percent state tax rate on top of local rates. Owners engaging in residential property rentals are required to obtain and display the requisite documentation of licensing. The rental tax rate is 3.0 percent on hotels and motels, and 5.0 percent on residential properties. The Town of Fenwick Island levies a tax on the rental of rooms in hotels, motels and private dwellings.
Rental transactions lasting more than eight consecutive months are exempt from the tax.
The rate of tax on the rental of rooms in a hotel or motel is 3.0 percent. The rate on the rental of private, single-family dwellings is 7.0 percent. The Town of Henlopen Acres levies a tax on persons providing rental accommodations within the Town. Each homeowner is required to be licensed and remit the tax on the rental amount. The rate of tax on rental amounts is 3.0 percent.