Delaware Franchise Tax: Everything You Need to Know

A tax haven or shelter is a method of reducing taxable income which results in a reduction of tax payment. The method is any that recovers more than $1 in tax for ever $1 spent within a four-year period. A tax shelter can be created by an individual or a corporation. If you don’t file your Delaware franchise tax on time, you will be charged a late fee. If you don’t want to pay your Delaware franchise tax yourself, you can hire a registered agent to do it for you.

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. Business that are formed out of state but are registered to do business in Delaware must pay a $125 registration fee. To use this method, you must supply the company’s total gross assets and the total number of issued shares. Payment can be submitted with an electronic check or credit card.

  • By not requiring more information, businesses that file their franchise tax in Delaware can maintain privacy.
  • Delaware allows you to pay the lower of the two methods.
  • This means if you have a Delaware corporation and have not yet filed and paid for the annual Franchise Tax report, then it needs to be filed right away.
  • There’s also a better chance of avoiding discrepancies if you do them together.
  • If your business was formed or is located in another state but generates income in Delaware, you may need to pay Delaware taxes.

The San Joaquin County Treasurer-Tax Collector is responsible for collecting tax payments for secured and unsecured taxes owed to San Joaquin County. Our office processes thousands of annual Franchise Tax reports each year. In order to make sure all the filings are processed on time, we must enforce a cut-off time for accepting any new orders. Once we have received your online order, we will submit the filing to the state of Delaware. You will receive an email copy of the documentation for your records. The annual Registered Agent fee is paid to Harvard Business Services, Inc. for you to act as an agent of your business in the state of Delaware.

Delaware Franchise Tax: Everything You Need to Know

This is the lowest Registered Agent fee in the industry. You will also be charged a 1.5 percent monthly interest on the amount due. Filing your Delaware franchise tax is a simple, online process.

He has also been quoted as an expert by USA Today, Forbes, U.S. News & World Report, Reuters, Accounting Today, and other media outlets. Rocky holds a law degree from the University of Connecticut and a B.A. Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more – straight to your e-mail. 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.

Other Tax Information

Don’t forget to include the $50 annual report fee. Along with your business’s annual Delaware franchise tax, your business is required lessen the burden to submit a Delaware annual report. Both the Delaware annual report and the Delaware franchise tax are due by March 1 each year.

Special Cases for Delaware Franchise Tax

Delaware also has no personal property tax or value-added taxes. To find your Business Entity File Number search for your business name.

Delaware Annual Report

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. This is the first method that is typically used to calculate tax. Whether your business is physically in Delaware or not, you don’t pay any state taxes.

With this type of business, your business income will be distributed to you as the sole proprietor. You will pay tax to the state on that income on your individual state tax return. The tax rate will depend on your overall taxable income that year. We recommend filing both federal and state returns at the same time if possible. State returns typically “piggyback” off the federal return, so it’s usually easier to do them at the same time. There’s also a better chance of avoiding discrepancies if you do them together.

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When paying the annual report fee, corporations are sorted into two categories. You probably already know that most Americans have to file their 2018 federal tax return by April 15, 2019 (as we told you earlier). For most states with an income tax (there are nine states with no income tax), the state return is also due on April 15 this year. However, some states give you more time to file — such as Delaware.

For information about other states with delayed tax filing deadlines, see 9 States Where You Can File Your State Tax Return After April 15. Profit and prosper with the best of expert advice – straight to your e-mail. If you need to take care of this mandatory obligation, then Harvard Business Services, Inc. can help you get this done. The fastest and easiest way to proceed is by paying the Franchise Tax online on our website.

Delaware: Tax Haven

This article focuses on businesses that are operating solely in Delaware. If your business is operating in multiple states, your business may have “nexus” with those other states. This means that you’re likely to need to pay taxes in those states. Foreign corporations, those that are formed outside of Delaware, cannot file online. Delaware allows you to pay the lower of the two methods.

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