Delaware Corporate Franchise Taxes

How to file a Delaware corporate annual report

Delaware Annual Report and Franchise Tax Overview

Domestic Delaware corporations have a franchise tax and annual report due every March 1st. The only way to file your Delaware corporate annual report for a domestic corporation is to file online. Or you can pay a Delaware registered agent to do it for you, but there’s no need to waste your money paying someone else to turn around and just enter the same info you give them into the Delaware Division of Corporations website.

Steps to filing the Delaware Annual Report and Franchise Tax

  1. Go to the Delaware Division of Corporations Website

    Domestic corporations can only file online. Use the link below to get started.

  2. 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. This can be found by performing a business name search. The number will be highlighted as part of your business’ name search result.

  3. Enter Corporation Information

    When you enter the Business Entity File Number, you will then be taken to a page that combines the annual report and franchise tax information. You’ll need to enter the following information: Federal Employer ID Number (EIN); corporation’s physical address; names and addresses of officers (if any); names and addresses of all directors; name, title, and address of person completing the filing.

  4. Pay the Franchise Tax and Annual Report Fee

    Complete the payment. You can pay with electronic check (ACH) or any major credit card. Once the payment is complete, you’re done, until next year.

Delaware Annual Report and Franchise Tax Costs

There is a minimum tax of $175 and a minimum filing fee of $50; so there is a minimum Delaware franchise tax and annual report payment total of $225 a year for Delaware domestic corporations. Domestic corporations must file by March 1 or face a $125 penalty, and a 1.5% interest rate on the amount due.

Delaware Franchise Tax Due Dates and Fees

Entity Type

Due Date

Fee

Corporation March 1 See Below
Benefit Corporation March 1 See Below
Foreign Corporation June 30 $125 (Annual Report Fee)
Nonprofit Corporation March 1 $25 (Annual Report Fee)
LLC June 1 $300
Foreign LLC June 1 $300 (Annual Report Fee)
General/Limted Partnerships June 1 $300
Limited Liability Partnerships June 1 $200 per partner

Delaware Foreign Corporation Annual Report and Franchise Tax

Corporations that are formed out of state and registered to do business in Delaware pay a $125 registration fee. However, foreign corporations (corporations formed in another state or jurisdiction) cannot file online. The foreign corporation form gets mailed to us, and we scan it into your online account. You can print it out and mail or fax it into the state of Delaware with the payment. Franchise taxes for corporations registered to do business in Delaware are due by June 30th of each year.

If I live in a different country, is my corporation a foreign corporation?

Even if you are a foreigner located out of the U.S., you do not have a foreign Delaware corporation. If the corporation was formed in Delaware, it is a domestic Delaware corporation, no matter where you actually live.

Delaware Annual Report and Franchise Tax Late Fees

There is a $125 penalty if you miss the deadline for filing, and 1.5% a month interest on the amount due. The Division of Corporations pull in a TON of money off hammering people with late fees and interest. As your Delaware registered agent, we send you a ton of reminders to file this to hopefully save you some money. Don’t waste $125 on late fees. Just get it filed and move on.

How to Calculate Domestic Delaware Corporations Franchise Tax

The Delaware Corporation Franchise Tax can be calculated through two methods: the Authorized Shares Method or the Assumed Par Value Method. When you receive your tax statement, Delaware has calculated the amount you owe using the Authorized Shares Method.

You are allowed, however, to calculate the tax you owe based on either method.

The lowest tax you’ll pay with the Authorized Shares Method is $175.

The lowest tax you’ll pay with the Assumed Par Value Method is $350.

So, if your tax statement says you owe more than $350, it may be worth your time to calculate your tax based on the Assumed Par Value Method. It may turn out that you can pay a lower tax.

The Authorized Shares Method:

This calculation is based on the total number of shares authorized, not the number of shares issued to shareholders.

Here’s how it breaks down:

  • 5,000 Shares or Less: $175
  • 5,001 Share to 10,000 Shares: $250
  • Every 10,000 Additional Shares Above 10,000: $75 for each 10,000
  • Max Payment: $180,000

The Assumed Par Value Method:

This method is based upon the issued shares, the authorized shares and your Corporation’s total gross assets. Your gross assets are reported on your federal tax return (Form 1120, Schedule L).

  • First, divide the gross assets by the issued shares. The resulting number is known as your Assumed Par Value.
  • Next, multiply the APV by the total number of authorized shares. This new number is known as your Assumed Par Value Capital.
  • Finally, the tax you owe is $350 for every $1,000,000 of your APVC. If your APVC is above $1,000,000 you need to round up to the next million, not down.

Corporations are required to pay the Franchise Tax and an additional $50 fee. If you do not file on time, there is a $125 late fee and a 1.5% interest assessed on the tax balance.

If you are a small, medium, or closely held large corporation, there is no need to be paying any more than $225 total for your Delaware Franchise Tax each year. If you are overpaying you should see our page on how to save money by amending your authorized shares.

Filing Information

Here is where you can file your Delaware franchise tax report for a Delaware corporation:
http://corp.delaware.gov/paytaxes.shtml

Here is a link to calculate your Delaware franchise tax fee if you have more than 5,000 authorized shares:
http://www.corp.delaware.gov/frtaxcalc.shtml

Foreign corporations can mail their franchise tax into:

Delaware Division of Corporations
Attention Franchise Tax
410 Federal Street, STE 4
Dover, DE 19901

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