Delaware Public Utility Tax
Delaware does not have a sales tax on utilities. Utilities are subject to a Public Utility Tax (PUT), a gross receipts tax paid by the distributor, not the end user.
How the Exemptions Work
- Electricity used in electrolytic, electrothermal, or air separation processes is fully exempt from the PUT.
- Electricity and gas sold to automobile assembly plants (not parts suppliers or administrative operations) is also exempt.
- All other manufacturers not qualifying for full exemption may pay a reduced PUT rate of 2% instead of the standard 4.25%, provided more than 70% of site employees are in manufacturing or food/agribusiness processing.
These exemptions are set by law (Title 30 Del. C. § 5506) and are implemented by utility distributors.