Delaware is one of only five US states with no state sales tax — alongside Oregon, Montana, New Hampshire, and Alaska. This makes it uniquely attractive for e-commerce businesses and Amazon sellers looking to reduce costs.
Delaware's Tax History
Delaware has never had a state sales tax since it adopted its current tax structure. Instead, Delaware funds its government primarily through income taxes, corporate franchise taxes, and fees. The state is home to over 60% of Fortune 500 companies — largely because of its business-friendly legal and tax environment.
How the Tax-Free Advantage Works for Amazon Sellers
When you purchase inventory and have it shipped to a Delaware warehouse, the purchase is legally made in a state with 0% sales tax. This applies to:
- Product purchases from domestic US suppliers
- Inventory flowing through a Delaware prep center or 3PL
- Any goods purchased and delivered to a Delaware address
⚠ This is 100% legal. Delaware's tax code has not changed, and there's no "loophole" being exploited — you're simply purchasing in a state that doesn't collect sales tax.
How Much Can You Save?
Sales tax rates in other states range from 5% to 10.25% (California). If you're purchasing $200,000 in inventory annually through a Delaware warehouse instead of, say, California or New York, you're saving $10,000–$20,000 per year — automatically, legally, every year.
Who Benefits Most?
- Amazon FBA sellers purchasing inventory to resell
- International sellers (Turkey, UK, UAE, etc.) importing to the US
- Multi-channel sellers with high inventory volume
- Businesses purchasing supplies, equipment, or raw materials
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