State Legislative Updates

Delaware Corporations: Annual Franchise Tax is Due March 1

Delaware — If you are the owner or compliance officer of one of the hundreds of thousands of business corporations that call Delaware home you should know this: Your corporation has to file its annual franchise tax report and pay its annual franchise tax by Friday, March 1, 2019.

Who Has to Pay? - Every for-profit corporation incorporated in Delaware is subject to the annual report and franchise tax requirement. The corporation does not have to be doing business in Delaware or earn any income there. Think of this as a license fee. You are paying for the right to incorporate and exist as a Delaware corporation.

How Much Does My Corporation Have to Pay? - A corporation has to pay a $50 filing fee plus the franchise tax. The franchise tax can be calculated based on one of two methods. The corporation can use whichever method results in the lower tax. One is called the “authorized shares” method. The tax due depends on the number of authorized shares (that's the maximum number of shares the corporation can issue as set forth in its certificate of incorporation). The other is the “assumed par value capital method”. The minimum tax is $175 using the authorized shares method and the minimum tax using the assumed par value capital method is $400. There is a maximum tax of $200,000 for both methods unless the corporation has been identified as a Large Corporate Filer, in which case the tax will be $250,000.

What Are the Penalties for Non-Compliance? - Failure to file the report and pay the required franchise taxes will result in a penalty of $200 plus 1.5% interest per month on tax and penalty.

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