Harvard Business Services, Inc

delaware franchise tax due date

When it comes to paying the Delaware Franchise Tax, businesses have several options available to them. For credit card payments, major credit cards such as Visa, Mastercard, and American Express are typically accepted. To use an ACH debit payment, a business must provide their checking account information to allow for the tax charge to be directly withdrawn from their account. Corporations must complete an annual report along with their Delaware Franchise Tax payment. Yes, regardless of your Delaware company activity or not conducting business, you are still required to pay the Delaware Franchise Tax to remain in Good Standing. If your company is no longer active and you wish to close your business, be sure to follow the proper steps to Dissolve a Corporation, or Cancel an LLC.

Franchise Taxes vs. Corporate Income Tax

In addition to corporations, other business entities in Delaware, such as Limited Liability Companies (LLCs), Limited Partnerships (LPs), and General Partnerships, are impacted by the Franchise Tax. Franchise taxes are levied on corporations for benefitting from the legal and other advantages offered by the State of Delaware, while the Corporate Income Tax is imposed on a corporation’s earnings. Harvard Business Services, Inc. guarantees your annual Delaware Registered Agent Fee will remain fixed at $50 per company, per year, for the life of your company.

What are the consequences of failing to pay Delaware franchise tax on time?

Follow the prompts for filing your annual report and submitting the franchise tax payment. This type of company does not pay the standard annual Delaware Franchise Tax, but must still file and pay the annual report fee of $25 per year. The Delaware Franchise Tax Calculator is a convenient tool available for calculating the annual tax owed by corporations operating in the state of Delaware. This easy-to-use service is helpful for businesses looking to estimate their franchise tax payment as accurately as possible. The Delaware Franchise Tax is an annual fee imposed on corporations that are incorporated in the state of Delaware, regardless of whether they conduct business in the state or not. The objective of this tax is to provide a straightforward and affordable taxation process to encourage businesses to incorporate in Delaware.

Limited Liability Companies and Partnerships

Corporations may be charged a penalty of $200 and accrue a 1.5% monthly interest for late payments. Owners of multiple corporations will need to pay Delaware Franchise Tax for each entity separately as each entity is required to file an annual report. In Delaware, the franchise tax for LLCs is a flat fee of $300, regardless of company size, income, or activity. This flat fee structure simplifies https://www.online-accounting.net/ the process and allows for easier compliance for LLCs, due annually by June 1st. By utilizing the Delaware Franchise Tax Calculator, business owners can stay informed and prepared, ensuring they meet the state’s tax obligations and avoid any penalties. This valuable service makes managing Delaware franchise tax requirements more accessible and clear for businesses of all sizes.

delaware franchise tax due date

As your Registered Agent, we will send you tax reminders both by mail and email, well in advance of the due date. For a discounted rate you can submit your Delaware Franchise Tax payment via our online Franchise Tax form. If the tax is not paid on or before March 1, the state imposes a $200 late penalty, plus a monthly interest fee of 1.5%. These payments are determined based on the expected income and expenses of the business for that particular year, along with any other relevant factors such as tax credits or deductions.

  1. Corporations not conducting business in Delaware still have to pay a franchise tax, which is collected annually by the Department of State.
  2. Corporations are required to pay this fee for the privilege of doing business in the state.
  3. In order to utilize this filing method, you will need to provide the company’s total gross assets (as reported on Form 1120, Schedule L) and the total number of issued shares.

What Happens if Delaware Franchise Tax Is Paid on Time?

delaware franchise tax due date

Once the required information is inputted, the calculator will generate an estimate of your franchise taxes due based on your Total Gross Assets and other relevant data. It should be noted that the calculator is primarily intended for measuring your food waste stocks with a par value, and taxes will be calculated using the Authorized Share Method. Considering the payable tax deadlines and abiding by the requirements ensures businesses stay in good standing with the Delaware tax authorities.

delaware franchise tax due date

The franchise tax in this method is based on a minimum of $400 and a maximum of $200,000. Companies with no-par value stock need to contact a franchise tax specialist for assistance in calculating their taxes using this method. Depending on the size of the corporation, this method can be a more straightforward approach to calculating the Delaware franchise tax. However, it does not take into consideration the actual value of issued shares, making it potentially less accurate in some cases. Our annual Registered Agent Fee is $50 per year, and is due on the anniversary month of the formation of your company.

The tax is then often calculated to the minimum payment of $400 tax plus the $50 annual report fee, for a total of $450 due per year. Delaware franchise tax is an annual fee paid by businesses that are incorporated in the state, irrespective of whether they conduct business in Delaware or not. This tax is a requirement for maintaining good standing and compliance within the Delaware Division of Corporations. Business entities such as corporations and limited liability companies (LLCs) are affected by this tax, with each having specific payment and filing obligations. The tax calculation method and the amount of the Delaware franchise tax differ based on the type of business entity. For instance, corporations can choose between the Authorized Share Method and the Assumed Par Value Capital Method.

The minimum tax for the Authorized Shares method is $175.00, while the minimum tax for the Assumed Par Value Capital Method is $400.00. In conclusion, the Delaware Division of Corporations and official state government resources provide a wealth of information and assistance for businesses to understand and meet their franchise tax obligations. Be sure to stay informed, and consult these resources as you navigate the franchise tax process. The Division of Corporations is a part of the Delaware Department of State that handles franchise tax administration.

Corporations are required to pay this fee for the privilege of doing business in the state. If the Delaware Franchise Tax calculation uses the assumed par value capital method, the gross assets and issued shares are also to be listed. If you decide to pay your Delaware Franchise Tax for a corporation with us over the phone, the annual report would need to be separately submitted to us by email, fax or mail. A corporation with 5,001 authorized shares or more is considered a maximum stock corporation.

Therefore, if you receive a tax bill for tens of thousands of dollars, it may be in your best interest to try calculating your Delaware Franchise Tax with the assumed par value capital method. Corporations, LLCs and LPs are taxed in arrears, meaning the tax https://www.accountingcoaching.online/sober-living-scholarships-in-texas/ due by each due date is for the previous calendar year. The franchise tax is due even if the business didn’t conduct any activity or lost money. If your company is no longer operating, it’s important to close your Delaware business and end these fees.

Delaware LLCs do not have to complete the annual report, but still pay the $300 Delaware LLC Franchise Tax fee. If you’re ready to file and pay your Delaware Franchise Tax now, please visit our online Franchise Tax payment form. Moreover, the Delaware Franchise Tax Calculator is designed to be user-friendly, allowing businesses to effortlessly determine their annual tax liabilities.

The Delaware annual report fee is $50 and the tax is $175 for a total of $225 due per year. For corporations, the annual franchise tax payment and annual report are both due by March 1st. To pay your Delaware franchise tax online, visit the Delaware Department of State’s Division of Corporations website.