Franchise Tax is the fee imposed by the state of Delaware (a one-time state fee) for the right or privilege to own and keep a Delaware company. The tax has no bearing on income or company activity; it is simply required by the state of Delaware to maintain the good standing status of your company. Your registered agent can easily help you with the Franchise Tax Fee..
When is it due?
The due date of the Delaware Franchise Tax payment varies, depending on the company type:
- Corporation Franchise Tax is due by March 1 of every year. 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%.
- Delaware LLC Franchise Tax is due by June 1 of every year. The limited partnership (LP) Franchise Tax is also due by June 1 of every year. If the tax is not paid on or before June 1, the state imposes a $200 late penalty, plus a monthly interest fee of 1.5%.
Corporations and LLCs s are taxed in arrears, meaning the tax 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.
For information on how to calculate your Franchise Tax, check out this detailed article.