Steps to filing the Delaware Annual Report and Franchise Tax
- Go to the Delaware Division of Corporations Website Domestic corporations can only file online. Use the link below to get started.
- Enter Business Entity File Number After clicking the “Pay taxes/File annual report” button on the Division of Corporations website, you’ll need to enter the Business Entity File Number. ...
- Enter Corporation Information ...
- Pay the Franchise Tax and Annual Report Fee ...
Full Answer
Which states have franchise tax?
The states that currently have franchise taxes are:
- Alabama
- Arkansas
- Delaware
- Georgia
- Illinois
- Louisiana
- Mississippi
- Missouri
- New York
- North Carolina
What is the corporate tax rate for Delaware?
Delaware has a flat corporate income tax rate of 8.700% of gross income. The federal corporate income tax, by contrast, has a marginal bracketed corporate income tax.Delaware's maximum marginal corporate income tax rate is the 10th highest in the United States, ranking directly below California's 8.840%.
When are Delaware LLC franchise taxes due?
The annual franchise tax of the Delaware LLC is due on June 1 every year. The annual report filing fee payable to the Secretary of State for Delaware must be paid on or before that date. The Delaware Limited Liability Company (LLC) requires an annual franchise tax payment.
What is Delaware corporate income tax?
Delaware's corporate income tax rate is 8.7% and is based on the federal taxable income of the corporation. What entities must file and/or pay Delaware corporate income tax? If your corporation is domestic or foreign and conducts business in Delaware, you'll be required to file a corporate income return.
How do I fill out an Annual Report in Delaware?
The Delaware Annual Report and/or franchise tax must be filed online through the Delaware Corporations Information System.On the state website, you'll need to enter your 7-digit Business Entity File Number. ... Then, click “Continue.” This will automatically begin the filing process.
What information is required in Delaware Annual Report?
Your corporation's Delaware annual report is pre-populated with certain information including the exact legal name of the entity, total number of authorized shares, class and par value of the shares and a breakdown of the franchise tax and fees due.
Are annual reports required in Delaware for LLC?
LLC/Partnership Tax Information There is no requirement to file an Annual Report. The annual taxes for the prior year are due on or before June 1st. Failure to pay the required annual taxes will result in a penalty of $200.00 plus 1.5% interest per month on tax and penalty.
What is the Delaware annual franchise tax?
The Franchise Tax for a Delaware LLC or a Delaware LP is a flat annual rate of $300. A non-stock/non-profit company is considered exempt by the State of Delaware. This type of company does not pay the standard annual Delaware Franchise Tax, but must still file and pay the annual report fee of $25 per year.
What happens if I dont pay Delaware franchise tax?
If you don't pay the Delaware Franchise Tax and file the Annual Report for two straight years, the State of Delaware will administratively dissolve the Corporation. If you have any questions about forming your new Delaware LLC, LP, or Corporation, give us a call today.
What are gross assets for Delaware franchise tax?
Total Gross Assets shall be those “total assets” reported on the U.S. Form 1120, Schedule L (Federal Return) relative to the company's fiscal year ending the calendar year of the report. The tax rate under this method is $400.00 per million or portion of a million.
Do Delaware LLCS pay franchise tax?
Any corporation that is incorporated in Delaware (regardless of where you conduct business) must file an Annual Franchise Tax Report and pay Franchise Tax for the privilege of incorporating in Delaware. Franchise Taxes and annual Reports are due no later than March 1st of each year.
Do I have to file a Delaware tax return?
According to Delaware Instructions for Form 200-01, “If you are a Full-Year Resident of Delaware, you must file a tax return for 2021 if, based on your Age/Status, and if your individual adjusted Delaware gross income (AGI) exceeds the limit.
How do I file Delaware corporate taxes?
Delaware Corporate Franchise TaxesGo to the Delaware Division of Corporations Website. Domestic corporations can only file online. ... Enter Business Entity File Number. ... Enter Corporation Information. ... Pay the Franchise Tax and Annual Report Fee.
Who Must file Delaware franchise tax?
All corporations incorporated in the State of Delaware are required to file an Annual Report and to pay a franchise tax. Exempt domestic corporations do not pay a tax but must file an Annual Report. The filing fee for filing an Annual Report or Amended Annual Report for exempt domestic corporations is $25.
How do Delaware franchise taxes work?
If your company has authorized 5,000 shares or fewer, your total Delaware franchise tax amount is $175. If you've authorized 5,001 to 10,000 shares, your franchise tax is $250. For every** additional 10,000 shares** authorized after that, you pay another $85 in franchise tax, up to a maximum of $200,000.
How do I avoid franchise tax in Delaware?
There are ways to reduce your Delaware franchise costs in certain circumstances. To reduce the taxes paid by a startup, use the Assumed Par Value method. This method calculates the taxes by total assets. As long as your issued shares constitute a third to half of your authorized shares, this method will save you money.
Does Delaware have Statement of information?
Required Statement of Information Domestic Stock Corporations & Limited Liability Companies must file a complete statement of information (Annual Report) at the end of each year of operation.
Do Delaware companies file accounts?
Delaware does not require corporations to file any financial reports. A basic annual franchise tax report must be filed annually on or before 1 March (with a fee of USD50).
Do Delaware LLCS pay franchise tax?
Any corporation that is incorporated in Delaware (regardless of where you conduct business) must file an Annual Franchise Tax Report and pay Franchise Tax for the privilege of incorporating in Delaware. Franchise Taxes and annual Reports are due no later than March 1st of each year.
When are Delaware franchise taxes due?
Franchise Taxes and annual Reports are due no later than March 1st of each year. An annual Franchise Tax Notification is mailed directly to the corporation’s registered agent. Blank Franchise Tax Returns are not available. The Delaware Division of Corporations will require all Annual Franchise Tax Reports and alternative entity taxes ...
When are Delaware corporation tax returns due?
Franchise Taxes and annual Reports are due no later than March 1st of each year.
Do corporations have to file taxes in Delaware?
Corporations incorporated in Delaware but not conducting business in Delaware are not subject to corporate income tax, [30 Del.C, Section 1902 (b) (6)] but do have to pay Franchise Tax administered by the Delaware Department of State. Any corporation that is incorporated in Delaware (regardless of where you conduct business) must file an Annual ...
Do Delaware corporations have to file annual reports?
All corporations incorporated in the State of Delaware are required to file an Annual Report and to pay a franchise tax. Exempt domestic corporations do not pay a tax but must file an Annual Report. The Annual Report filing fee for all other domestic corporations is $50.00 plus taxes due upon filing of the Annual Report.
How much is the Delaware annual report?
Foreign Corporations must file an Annual Report with the Delaware Secretary of State on or before June 30 each year. A $125.00 filing fee is required to be paid. If the Annual Report and remittance is not received by the due date, a $125.00 penalty will be added to filing fee.
How to contact Delaware Division of Corporations?
Please contact the Delaware Division of Corporations at (302) 739-3073 if you have any questions or concerns about a solicitation.
How to report deceptive solicitation in Delaware?
If a Delaware business entity received such a solicitation or sent payment as a result of receiving this solicitation, please complete a complaint form complaint form and immediately contact the Consumer Protection Unit of the Attorney General’s Office at (302) 577-8600 or 1-800-220-5424.
When are franchise taxes due?
All active Domestic Corporation Annual Reports and Franchise Taxes for the prior year are due annually on or before March 1st and are required to be filed online. Failure to file the report and pay the required franchise taxes will result in a penalty of $200.00 plus 1.5% interest per month on tax and penalty.
Do you have to file an annual report?
There is no requirement to file an Annual Report. The annual taxes for the prior year are due on or before June 1st. Failure to pay the required annual taxes will result in a penalty of $200.00 plus 1.5% interest per month on tax and penalty. There is no proration on alternative entity taxes. Annual taxes are assessed if the entity is active in ...
What are Delaware franchise taxes?
A franchise tax, sometimes called a privilege tax, is a fee you pay for the “privilege” of doing business in a certain state.
Who has to pay the franchise tax?
You must pay the Delaware franchise tax if your Delaware business is one of the following:
What about the annual report?
Delaware companies must submit an annual report to the Delaware Department of State and pay a $50 filing fee, all of which should be done at the same time they pay their franchise tax. (For certain exempt corporations, the filing fee is $25.)
What information is required to file a franchise tax in Delaware?
When filing a franchise tax in Delaware, all the must be submitted is the physical address of the business and the name of the registered agent. This can be a business owner or someone else. By not requiring more information, businesses that file their franchise tax in Delaware can maintain privacy.
What is Delaware Franchise Tax?
Delaware franchise tax is a tax charged by the state of Delaware for the right to own a Delaware company. The tax does not affect income or company activity. The tax is required to maintain the company's good standing in Delaware.
Why do you need to use franchise tax in Delaware?
The Delaware franchise tax is beneficial to corporations because it is a simple process to submit and calculate payment. The Delaware franchise tax is also beneficial to businesses as it is a small fee in comparison to other states.
How much is the late fee for franchise tax in Delaware?
If you pay your Delaware franchise tax late, you'll be charged a late fee. The late fee is $125.00 and a 1.5 percent monthly interest afterward.
What happens if you don't file Delaware franchise tax?
If you don't file your Delaware franchise tax on time, you will be charged a late fee.
What is Delaware's court of chancery?
Delaware has what is called a Court of Chancery. This allows the state to adjudicate corporate litigation. The corporate laws and cases decided in Delaware are often used by the Supreme Court to influence decisions.
How much does it cost to register a foreign business in Delaware?
Foreign File. Business that are formed out of state but are registered to do business in Delaware must pay a $125 registration fee. Foreign corporations, those that are formed outside of Delaware, cannot file online. To file as a foreign corporation, mail in the necessary documents.
How much does it cost to file a Delaware franchise tax return?
The total cost of filing all necessary items – the Delaware franchise tax and annual report for Delaware domestic corporations – is at minimum, $225 per year . This cost is calculated using a minimum tax of $175 plus the minimum filing fee of $50.
How to calculate Delaware corporation tax?
You can calculate your Delaware Corporation Franchise Tax through either of these two methods – the Authorized Shares Method or the Assumed Par Value Method. For the Authorized Shares Method , the tax is calculated based on the total number of shares that were authorized, not necessarily the number of shares that were actually issued to the shareholders. The Assumed Par Value Method for calculating taxes is based on the issued shares, along with the corporation's total gross assets and authorized shares.
How much is franchise tax?
This minimum franchise tax payment is determined by calculating the number of authorized shares . Since corporations with a high number of authorized shares may be required to pay a large sum of money, up to $200,000, it is recommended that you keep your number of authorized shares under 5,000 if that makes sense for your corporation .
What is the lowest tax you can pay using the Authorized Shares method?
Using each method, the lowest tax you can be obligated to pay using the Authorized Shares Method is $175, while the lowest tax using the Assumed Par Value Method is $350.
What information is required for a Delaware annual report?
When filing your Delaware Annual Report, you must include the following information: The address and name of at least one officer. The address and name of each and every Director. The company's physical address location.
How much does it cost to register a corporation in Delaware?
If your corporation was formed outside of the state of Delaware but registered to do business in Delaware, then you must pay a $125 fee for registration. This is considered a foreign corporation.
How much is the state penalty for not filing annual report?
There is a state penalty of $125 if a domestic corporation has not filed the annual report and franchise tax. In addition, the state also will charge a 1.5 percent interest rate on the funds that are due.
How much is franchise tax in Delaware?
Franchise taxes for corporations are at a minimum of $175 and are either calculated by the Authorized Shared Method or Assumed Par Value Capital Method, both of which are calculated from the number of shares the corporation has. The minimum annual tax for Delaware corporations is currently $175, using the Authorized Shares Method and ...
What is an annual report for a Delaware corporation?
What is a Delaware Annual Report. One of the requirements of maintaining a corporation in Delaware is filing the Annual Franchise Tax Report. While LLCs, Limited Partnerships, and General Partnerships are not required to file an Annual Report, they will still have to report and pay Franchise Taxes. The Annual Report is used to confirm ...
Who Needs to File an Annual Report?
Domestic and foreign corporations and LLCs are required to file an annual report each year after the year the company was formed.
What is the penalty for failing to file a franchise tax return?
Corporations: Failure to file the Annual Report and pay the Franchise Tax will result in a penalty of $125.00 plus 1.5% interest per month.
What happens if an LLC is not filed by the due date?
If the Annual Report is not filed by the due date, the entity’s status will change to Bad Standing. In order for the entity to regain its status of good standing with the Secretary of State, the tax and penalties must be paid in addition to filing a reinstatement form. By not being in good standing, the owners may be held personally liable should the LLC or corporation be sued. Should the company be delinquent for three years, the Secretary of State will dissolve the entity.
How to find my file number?
You can find your File Number by doing a name search. Name and street address (P.O. Boxes are not allowed) of the Registered Agent. Address of the Principal place of business (No P.O. Boxes) Names and titles of all managers, members, directors, or officers.
When are franchise taxes due?
Corporations: The Annual Report and Franchise Taxes are due March 1 st of each year.
Who Needs to Pay the Delaware Franchise Tax?
The Delaware franchise tax must be paid by all companies that are incorporated in Delaware, regardless of whether or not you’ve generated any revenue or profit (technically, this filing is the “franchise tax and annual report”).
Can a Tax Preparer File the Delaware Franchise Tax on Your Behalf?
Yes, there are a number of Delaware Franchise Tax filing providers who can do these steps on your behalf. However, you’ll need to provide them all the same information we discussed above, which means you’ll still have to do the work of finding and assembling it.
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Corporate Annual Report Information and Franchise Tax Fees
- Corporate Annual Report All active Domestic Corporation Annual Reports and Franchise Taxes for the prior year are due annually on or before March 1st and are required to be filed online. Failure to file the report and pay the required franchise taxes will result in a penalty of $200.00 plus 1.5% interest per month on tax and penalty. Annual Report Filing Fees: Effective September 1, 2019, th…
Foreign Corporations
- Foreign Corporations must file an Annual Report with the Delaware Secretary of State on or before June 30 each year. A $125.00 filing fee is required to be paid. If the Annual Report and remittance is not received by the due date, a $125.00 penalty will be added to filing fee.
LLC/Partnership Tax Information
- All Domestic and Foreign Limited Liability Companies, Limited Partnerships, and General Partnerships formed or registered in Delaware are required to pay an annual tax of $300.00. There is no requirement to file an Annual Report. The annual taxes for the prior year are due on or before June 1st. Failure to pay the required annual taxes will result in a penalty of $200.00 plus 1.5% int…
Important Consumer Alert About Tax and Annual Report Scams
- 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. Examples of deceptive solicitations The Secretary of State’s Office works closely with law enforcement to inv…