It's that time of year again! The state of Delaware is collecting franchise taxes for all corporations that were incorporated as of December 31, 2020. If you have a Delaware corporation, be sure to get your franchise taxes paid and file your annual report. Here's some more information and details:
Corporate Annual Report:
All active Domestic Corporation Annual Reports and Franchise Taxes for the prior year are due annually on or before March 1st and are required to be filed online. Failure to file the report and pay the required franchise taxes will result in a penalty of $200 plus 1.5% interest per month on tax and penalty.
Franchise Tax Rates:
If using the authorized shares method, the minimum tax is currently $175.00 for 1500 shares of NO par value stock. The Minimum Tax using the Assumed Par Value Capital Method is $400 with a maximum tax of $200,000 for both methods unless it has been identified as a Large Corporate Filer, then their tax will be $250,000.
Taxes are assessed if the corporation is active in the records of the Division of Corporations anytime during January 1st through December 31st of the current tax year.
Annual Report Filing Fees:
Domestic Corporations - $50
Non-Profit Corporations (aka Exempt) $25
The Delaware Code allows a qualified domestic corporation to file as an exempt corporation. The definition of an exempt corporation is as follows:
In order to file as an exempt corporation you must meet the requirements of 391 (j) as follows: “…the term “exempt corporation” shall be defined as any corporation organized under this chapter that is not authorized to issue capital and that:
is exempt from taxation under § 501(c) of the United States Internal Revenue Code or any similar provisions of the Internal Revenue Code, or any successor provisions;
qualifies as a civic organization under § 8110(c)(1) of Title 9 or § 6840(4) of Title 16;
3) qualifies as a charitable/fraternal organization under § 2593(1) of Title 6;
4) is listed in § 8106(a) of Title 9;
5) is organized primarily or exclusively for religious or charitable purposes; or
6)(i) is organized not for profit and (ii) no part of its net earnings inures to the benefit of any member or individual.
Most corporations will pay a total of $225 per year. This breaks down as follows: a franchise tax fee of $175 and an annual report fee of $50. These fees are due at the same time.
Here's a quick video about 2020 Delaware Franchise Taxes:
If you need assistance with paying your 2020 Delaware Franchise Taxes and filing your annual report, please do not hesitate to call us at 1-800-423-2993 or 302-996-5819. We'll be happy to help you.