Delaware Corporate Taxes

Delaware estimated corporate tax

In addition to submitting an annual report, some states require corporations to pay a franchise tax—sometimes called a privilege tax—to incorporate or conduct business in that state. This is the case in Delaware.

When a business fails to pay a franchise tax, this may result in the business being disqualified from doing business in a particular state.

What are corporate taxes and do they differ from franchise or privilege tax?

Corporate income taxes are different from a franchise tax. Corporate income taxes are assessed on profits of corporations. Franchise taxes do not apply to profit. Also sometimes referred to as a "privilege tax," this tax is assessed to these companies for the privilege of either doing business in the state or incorporating their business in that state. When a business fails to pay a franchise tax, this may result in the business being disqualified from doing business in a particular state.

Who is required to pay corporate tax?

As a general rule, corporate income tax only applies to corporations. Sole proprietorships, limited liability companies, and partnerships do not pay the corporate income tax. However, even companies that make little money or even lose money still may be required to pay the franchise tax.

Are there exceptions for businesses that were founded outside of Delaware?

There are a number of entities that are exempt from corporate franchise tax. These include most partnerships, limited liability corporations, and S-corps. These types of businesses pay taxes through the individual's tax returns, rather than on the entity's income. These entities are subject to minimum fees and are still required to pay the franchise tax.

All corporations incorporated in the state of Delaware are required to file an annual report and pay a franchise tax. There is a narrow list of exceptions who do not pay a tax but must file an annual report. Any Delaware corporation that is ending its existence or reinstating their status to good standing is required by law to file an annual report and pay any and all tax due.

How often do corporations pay these taxes? Are they due immediately after filing their annual reports?

Notification of annual report and franchise taxes due are sent to all Delaware registered agents in December of each year. Delaware has mandated electronic filing of domestic corporations' annual reports. Taxes and annual reports are to be received no later than March 1 of each year.

Delaware Annual Franchise Tax Report Snapshot

Business Type
Filing Fee
Due Date
Filing Requirements
Late Penalty
How to File
Corporations
$225 min
March 1
Annual report and franchise tax
$200 plus 1.5% interest per month
Online or work with a qualified corporate solutions provider
Foreign Corporations
$125
June 30
Annual report
$125
LLCs
$300
June 1
Annual franchise tax
$200 plus 1.5% interest per month
LPs
$300
June 1
Annual franchise tax
$200 plus 1.5% interest per month

Why choose CSC to file your Delaware franchise tax and annual report

By letting CSC's team of experts take care of your annual report filing needs and assist you during every phase of reporting cycle, you'll have time to focus on other, more ambitious business goals.

CSC will monitor compliance events like:

  • Due dates
  • Sorting and reviewing compliance mail
  • Sourcing and completing state forms

We offer annual report services in all 50 states, streamlining your reporting and filing requirements for you.

We're ready to talk

If you'd like to talk through your Delaware franchise tax needs and learn how CSC can assist you in meeting these important deadlines, complete the form on the right for a free consultation with a CSC compliance expert.

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