Delaware LLCs and corporations must pay the state franchise tax of $300 by June 1. Failure to do so will incur a $200 penalty plus 1.5% monthly interest charge from the state.
Your company should designate a registered agent who can accept legal documents on your behalf, including service of process and tax notifications. Working with a professional agent will save time and money when dealing with late fees or penalties for late filing.
Annual tax
Delaware does not collect state income taxes from LLCs, instead charging an annual franchise tax of $300 due on June 1. LLC owners have the option of electing for their company to be taxed as an S corporation, changing filing requirements. S-corps are treated like pass-through entities allowing income from S-corps to be reported directly on personal tax returns while still paying corporate income tax.
To pay Delaware’s franchise tax, simply log onto the Delaware Division of Corporations website and enter your business entity file number and information. Select your payment amount using their franchise tax calculator; once chosen, submit your report using either credit or debit card payment (must pay by date listed on notification or you risk forfeiting good standing with state).
Gross receipts tax
Delaware businesses must pay an annual franchise tax of $300. The franchise tax is calculated based on their authorized shares or assumed par value capital and plays an essential part in keeping good standing within the state while safeguarding owners’ personal assets from liabilities associated with their companies. Furthermore, Delaware requires all businesses – both foreign and domestic – have registered agents who regularly update their addresses with them.
Delaware stands apart from most states by not having sales tax; instead, it imposes a gross receipts tax on businesses providing goods and services that increase prices but don’t appear on consumers’ receipts; this tax has come to be known as “hidden sales tax,” because consumers don’t see it on receipts but does increase prices; furthermore, gross receipts tax provides significant revenue to the state government.
Annual report
As a business owner in Delaware, you may need to file annual reports and pay franchise taxes annually. Requirements differ depending on entity type – domestic corporations must file an annual report by March 1, while foreign corporations have until June 30. You can find more information regarding these requirements from the Delaware Division of Corporations website.
To file an annual report in Delaware, visit the Division of Corporations website and enter your business entity’s file number. Filing fees are $50; payment for annual franchise taxes (using either Authorized Shares Method or Assumed Par Value Capital Method ) are due. Failure to do so on time will result in a $200 late filing fee with 1.5% monthly interest accruing daily until your report has been filed and could even lead to your business losing its Certificate of Good Standing status.
Franchise tax
The Franchise tax is a state-level business tax that most businesses must pay each year. The exact amount depends on your business type and filing status; corporations pay an annual flat tax of $300 while LLCs, LPs, and GPs may incur different rates depending on what kind of income they generate.
Pay the Franchise Tax Online by Navigating the Division of Corporations website. Here, the website will ask for your entity’s file number and show any taxes due. Select “Continue Filing” to review your information entered before clicking on “Pay Taxes”.
Delaware franchise taxes are mandatory for businesses operating in Delaware. Failure to pay this fee could result in a $200 penalty plus interest at 1.5% per month accruing, along with potential irreparable damage for an entity which will no longer be in good standing and cannot file documents or open bank accounts, and its registered agent being informed that its services may no longer be needed by them.
