Overview of Delaware Franchise Tax
Delaware LLCs and LPs must pay a $300 annual franchise tax by June 1. Corporations pay based on authorized shares or assets. Using assets saves money.
The fee for LLCs and LPs is $300 per year. Failure to pay on time adds a $200 late fee and 1.5% monthly interest. Our calculator helps you estimate your tax.
Franchise tax is for the privilege of doing business in Delaware. The Department of State mails reminders to pay. Businesses must also file annual reports. C Corporations, S Corporations, and LLCs owe franchise tax.
Understanding Delaware Franchise Tax Calculation
The goal is to make owning a Delaware business simple. Pay late and owe a $125 late fee plus 1.5% monthly interest. Filing online is a three-step process.
Calculating Delaware Franchise Tax
Looking to calculate your tax? Use our calculator to estimate quickly and accurately. Determine amounts owed based on assets and authorized shares. Simplify planning and stay compliant.
Franchise Tax in Delaware:
- All companies (LLC, Series LLC, Corporations, and Limited Partnerships) pay an annual Delaware Franchise Tax, regardless of their business income, business model, or company structure.
- Who has to pay the franchise tax? You must pay the Delaware franchise tax if, for example, your Delaware business is a C Corporation, S Corporation, or LLC.
Delaware Franchise Tax Due Date:
- For corporations, the tax is calculated based on the number of authorized shares of stock the company has. This includes both issued and unissued shares. The amount of tax due is calculated by multiplying the number of authorized shares by a predetermined rate.
- Franchise tax for Delaware Corporations is due by March 1 each year.
Payment and Penalties
- If you pay your Delaware franchise tax late, you’ll be charged a late fee of $125.00 and a 1.5 percent monthly interest afterward.
- Failure to pay the franchise tax by the deadline will result in $200 penalty and interest charges assessed by the State of Delaware at the rate of 1.5% a month. It will also prevent the business from getting a certificate of good standing.
Additional Information
- To use this method, you need to visit the Delaware Division of Revenue website and select the “Pay Franchise Tax” option. You’ll need to enter your corporation’s name, file number, and the tax year for which you’re making the payment. You can pay using a checking or savings account.
- If you have any questions about your LLC’s Annual Franchise Tax, you can contact the Franchise Tax Division at 302-739-3073 (option 3). Their email is: [email protected].
- You can pay your Delaware Franchise Tax fee by visiting our specialized web portal here or you can visit the Delaware state website directly.