Delaware LLC's are required to pay an annual tax to the state of Delaware on or before June 1st. The tax is often referred to as "franchise tax".
Why is it called franchise tax?
This terminology confuses some, simply because our common use of the word franchise usually means a store with multiple locations. In this case, the term is used because the taxes for LLC's are not based on the income of the company, but rather are a flat fee for every Delaware LLC. It is essentially a privilege fee that you pay to the state of Delaware to maintain your entity, thus the use of the term franchise.
What happens if I don't pay?
Failure to pay the required annual taxes by the due date will result in a penalty of $200.00 plus 1.5% interest per month on tax and penalty, and non-payment could also result in loss of the entity charter.
How do I know if I owe franchise taxes?
Every Delaware LLC received notification by letter, which included instructions for the payment of taxes due. The letter was mailed to the address currently on file for the LLC. You do not need the letter to pay your franchise tax.
Some registered agents scan these notices and forward them to you via email or upload them to a login portal. At The Incorporators, we forward you the notice directly so it is prudent that you ensure we have an accurate address for you so that you do not miss this notice.
What about annual report filing?
Delaware LLC's are not required to file an annual report. This requirement only applies to Delaware corporations.
How to pay your Delaware LLC Franchise Taxes
Clients of The Incorporators have the following options available for payment:
Use the eFiling Service on our website, which provides our clients with these valuable benefits:
- A user-friendly, comprehensive online form for quick and accurate electronic payment of your franchise tax.
- Order a Certificate of Good Standing.
- You will receive e-mail confirmation within minutes of completing your payment.
- Login to review your payment history anytime.
To use our eFiling Service, click here. Note: A $25.00 service fee applies.
File at the Division of Corporations website: www.corp.delaware.gov
Don’t know your file number? Look it up here.
Please note: Check payments MUST be sent directly to the Division of Corporations. See back of tax notice for mailing instructions. The Incorporators Ltd. is unable to process check payments for LLC taxes. Checks received in our office will be returned to sender.
If you have any questions, feel free to contact us here or give us a call at 800-223-3928.
DISCLAIMER: The Incorporators LTD. is a business formation service company only.
All content on this site is for informational purposes only and should not be construed as legal, taxation or financial advice or services.