17 enero, 2024
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. When you submit your Delaware franchise tax payment, you’ll also need to submit an annual report. If you pay your Delaware franchise tax late, you’ll be charged a late fee.
How to Calculate Your Delaware Franchise Tax Fee
You will also be charged a 1.5 percent monthly interest on the amount due. If your business was formed or is located in another state but generates income in Delaware, you may need to pay Delaware taxes. If you own a business that operates in multiple states, you will greatly benefit from the knowledge of a tax professional. Multistate taxes and determining nexus can be very complicated.
Payment can be submitted with an electronic check or credit card. Delaware is considered a tax haven or tax shelter. Your Delaware franchise tax is due on June 1 for an LLC. The limited partnership or LP franchise tax is also due on June 1.
How much does my corporation have to pay?
Delaware allows you to pay the lower of the two methods. This means that if you receive a high bill that was calculated under the first method, you can request a recalculation using the second method. To use this method, you must supply the company’s total gross assets and the total number of issued shares. Filing your Delaware franchise tax is a simple, online process. As long as your issued shares constitute a third to half of your authorized shares, this method will save you money. Your Delaware franchise tax due date depends on the type of business you own.
- When paying the annual report fee, corporations are sorted into two categories.
- Foreign corporations, those that are formed outside of Delaware, cannot file online.
- The corporation does not have to be doing business in Delaware or earn any income there.
- There are other states, such as Nevada, that also do this.
Delaware corporations’ annual franchise report and tax is due March 1
Whether your business is physically in Delaware or not, you don’t pay any state taxes. Business that are formed out of state but are registered to do business in Delaware must pay a $125 registration fee. This is the first method that is typically used to calculate tax.
There is a $200 penalty for failure to file a complete report by the due date. Also, the Secretary of State will not issue a Certificate of Good Standing for a corporation that owes franchise taxes or a completed report. Delaware provides a favorable tax shelter for U.S. corporations. There are other states, such as Nevada, that also do this. This leads to a high number of businesses being incorporated in those tax shelter states. When you file your Delaware franchise tax, an annual report must comparable store sales also be filed.
The late fee is $125.00 and a 1.5 percent monthly interest afterward. The goal of the Delaware franchise tax is to make owning a business in Delaware simple. Since the tax payment process is simple, businesses are more likely to want to be incorporated in Delaware. If your Delaware franchise tax is submitted late, a $125 late fee and interest fee of 1.5 percent will be charged.
