Franchise Tax is a form of state tax imposed by the state of Delaware for the right to own a company in Delaware. This tax is not calculated based on any income or company activity, it is more of a fee rather than a tax which is required by the state of Delaware to maintain the good standing status of the company.
Any company that is incorporated in Delaware, regardless of where the company conducts business, must file an Annual Franchise Tax Report and pay Franchise Tax for incorporating in Delaware. Companies incorporated in Delaware but not conducting business in Delaware are not subject to corporate income tax but do have to pay Franchise Tax.
Limited Partnerships, Limited Liability Companies (LLC) and General Partnerships formed in the State of Delaware do not file an Annual Report but they are required to pay an annual tax of $300.00.
As for the corporations, the calculations is more complicated. The amount is based on the corporation type and the number of authorized shares of the company.
The due date of Franchise Tax varies, depending on the company type. Generally, Franchise Taxes and annual reports are due no later than March 1st of each year.
You can also check for your current Delaware Franchise Tax information by clicking here. (This application is available daily between 8:00 am and 11:45 pm Eastern Time. Only use the English version of characters when entering data, otherwise, it may cause an inaccurate record on your Annual Report.) If you see that you will get a penalty and interest on your Delaware Franchise Tax, you need to contact with tax Deparment of the State of Delaware and pay your penalty and its interest.
All Delaware companies have to pay Delaware Franchise Tax and Registered Agent fee. Delawarefile.com provides help to pay Franchise Tax for all entrepreneurs. E-Government LLC has the lowest Delaware Registered Agent fee, which is $40 yearly. It always will be the same and never will increase. It’s our promise.
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