Delaware LLCs do not have to complete the annual report, but still pay the $300 Delaware LLC Franchise Tax fee. Yes, regardless of your Delaware company activity or not conducting business, you are still required to pay the Delaware Franchise Tax to remain in Good Standing. If your company is no longer active and you wish to close your business, be sure to follow the proper steps to Dissolve a Corporation, or Cancel an LLC. Franchise Tax is the fee imposed by the State of Delaware for the right or privilege to own a Delaware company.
The State of Delaware allows you to pay the lower of the two Delaware Franchise Tax calculation outstanding checks methods. The due date of your Delaware Franchise Tax payment varies, depending on your company type. He has written extensively on subjects such as contract law, company law, and intellectual property.
Delaware Franchise Tax FAQ
The Delaware Franchise Tax is a tax that is imposed on businesses that are incorporated in the state of Delaware. If you have already paid this tax, you may be wondering if you can get a refund. The answer depends on the reason why you are no longer doing business in Delaware. If the tax is not paid on or before June 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 a franchise business. This is not the same as your Delaware annual report and will not mention internal company information, such as director or officer details.
As your Registered Agent, we will send you tax reminders both by mail and email, well in advance of the due date. We offer a tax filing service for a small fee in addition to your Franchise Tax amount. For a discounted rate you can submit your Delaware Franchise Tax payment via our online Franchise Tax form. 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.
If you have moved your business out of state, or if your business has been dissolved, you may be eligible for a refund of the tax that you have already paid. However, if you are still doing business in Delaware but have simply changed your business structure, you will not be eligible for a refund. If you are unsure whether or not you are eligible for a refund, you should contact the Delaware Division of Revenue to discuss your specific situation. The corporation may be subject to interest and penalties, and its ability to do business in the state may be affected. As a result, it is important to make sure that the Franchise Tax is paid on time and in full to avoid any negative consequences. Harvard Business Services, Inc. guarantees your annual Delaware Registered Agent Fee will remain fixed at $50 per company, per year, for the life of your company.
His work has been featured in publications such as The Times, The Guardian, and Forbes. When he’s not writing, James enjoys spending time with his family and playing golf. The Delaware Franchise Tax is a very important part of the state’s revenue, and it is crucial that you pay it on time and in full. If you have any questions about the tax or how to pay it, be sure to consult the official website or contact the Department of Finance.
Can I get a refund for the Delaware Franchise Tax that I’ve already paid?
Every corporation that is incorporated in Delaware or does business in Delaware has to pay the Delaware Franchise Tax. The amount of tax that a corporation has to pay depends on the number of shares that the corporation has. If a corporation has more than 1,500 shares, it has to pay $175 for every 1,000 shares. If a corporation has less than 1,500 shares, it has to pay $350 for every 1,000 shares. Our annual Registered Agent Fee is $50 per year, and is due on the anniversary retirement basics month of the formation of your company.
- If you have any questions about the tax or how to pay it, be sure to consult the official website or contact the Department of Finance.
- The purpose of the tax is to raise revenue for the state, and it helps to pay for things like roads, schools, and public safety.
- This is not the same as your Delaware annual report and will not mention internal company information, such as director or officer details.
- You can reduce your Delaware franchise costs in certain circumstances if you use the Assumed Par Value method.
What are some of the exemptions from the Delaware Franchise Tax?
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. Failing to pay your franchise tax by March 1st for corporations or June 1st for LLCs will result in a late penalty and interest. After missing the deadline, you’ll need to pay a $200 late fee with cumulative interest each month. This tax is imposed on businesses operating in the state, and there are a few things that you need to know about it. In this blog post, we will discuss what the Delaware franchise tax is, how to pay it, and some of the exemptions that may apply to your business. Corporations must complete an annual report along with their Delaware Franchise Tax payment.
Delaware Franchise Tax: What Is It and How Do I Pay It
In addition, every corporation that is incorporated in Delaware or does business in Delaware has to file a yearly report with the state of Delaware. The report is due by March 1st and must include information about the corporation’s assets and liabilities. 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 self-employment with the size of your business.