Franchise Taxes State of Delaware

Delaware Franchise Taxes for corporations are due by March 1 of every year. If the tax is not paid on or before March 1, the state imposes a $200 late penalty, plus a monthly interest fee of 1.5%. The term “Franchise Tax” does not imply that your company is what are held to maturity securities a franchise business. The factors are property, wages and sales in Delaware as a ratio of property, wages and sales everywhere (Chapter 19, Title 30, Delaware Code). Foreign Corporations must file an Annual Report with the Delaware Secretary of State on or before June 30 each year.

How much do I owe in Delaware franchise taxes?

All LLCs, Limited Partnerships, and General Partnerships formed in Delaware are required to pay the annual franchise tax by June 1. In addition to paying the franchise tax, businesses incorporated in Delaware must also file an annual report and pay a small filing fee. All Delaware-incorporated businesses must, however, still pay the annual franchise tax, submit an annual report, and pay a filing fee. Here’s how to figure out how much you need to pay, how to file, and what happens if you don’t. To use this method, you must give figures for all issued shares (including treasury shares) and total gross assets in the spaces provided in your Annual Franchise Tax Report.

Doing Business in Delaware

The annual report fee is $50 and the tax would be somewhere between $200 and $200,000 per year, as illustrated below. The Delaware annual report and franchise tax payment are both due by March 1. Your notification of annual report and franchise tax due is sent to a corporation’s registered agent in December or January of each year.

Due date… and what happens if you do not pay the tax on time

1. The State of Delaware allows you to pay the lower of the two Delaware Franchise Tax calculation methods.
2. The term “Franchise Tax” does not imply that your company is a franchise business.
3. In addition to paying the franchise tax, businesses incorporated in Delaware must also file an annual report and pay a small filing fee.
4. We offer a tax filing service for a small fee in addition to your Franchise Tax amount.
5. Read on to find out how much you’ll pay, or visit our Delaware Franchise Tax calculator app for a quick answer.

A corporation with 10,005 shares authorized pays $335.00($250.00 plus $85.00). Our intuitive software automates the busywork with powerful tools and features designed to help you simplify your financial management and make informed business decisions. The HBS Blog offers insight on Delaware corporations and LLCs as well as information about entrepreneurs, startups and general business topics.

The State of Delaware allows you to pay the lower of the two Delaware Franchise Tax calculation methods. Therefore, if you receive a tax bill for tens of thousands of dollars, it may be in your best interest to try calculating your Delaware Franchise Tax with the assumed par value capital method. If you’re ready to file and pay your Delaware Franchise Tax now, please visit our online Franchise Tax payment form. A corporation with 100,000 shares authorized pays $1,015.00($250.00 plus $765.00$85.00 x 9).

The Delaware Franchise Tax and the Registered Agent Fee are two separate, unrelated fees. The annual Franchise Tax is imposed by the State of Delaware and varies with the size of your business. The annual Registered Agent Fee is a fixed amount paid to Harvard Business Services, Inc. to act as an agent for your entity in the state. Corporations, LLCs and LPs are taxed in arrears, meaning the tax due by each due date is for the previous calendar year. The franchise tax is due even if the business didn’t conduct any activity or lost money.

File Your Delaware Personal Taxes

Franchise Tax is the fee imposed by the State of Delaware for the right or privilege to own a Delaware company. The Delaware Franchise Tax has no bearing on income or company activity; it is simply required by the State of Delaware to maintain the good standing status of your company. The Division of Corporations recommends that consumers be alert to deceptive solicitations. Delaware legal entities should view suspiciously any correspondence, via regular mail or e-mail, that does not come directly from the State or the entity’s Delaware registered agent.