Delaware Corporate Franchise Tax Report Deadline Approaching

Thoughtware Alert Published: Jan 31, 2022
City hall building

Corporations legally organized in Delaware have a franchise tax and annual report due March 1, 2022. The return must be filed online. This particular tax does not apply to legal entities other than corporations, i.e., LLCs, LLPs, etc., or corporations legally organized outside of Delaware. The tax applies to corporations taxed as either a C corporation or an S corporation for federal income tax purposes. 

Exemptions also may apply. Notably, corporations legally organized in Delaware that are exempt from federal income tax under Section 501(c) of the Internal Revenue Code are not required to pay the franchise tax but must still file an annual report. 

The amount of tax due can vary based on the amount of shares issued and/or authorized by the corporation. There is a minimum tax of $175 and a minimum filing fee of $50; thus, there is a minimum Delaware franchise tax and annual report payment total of $225 a year for Delaware domestic corporations.

There is a $200 penalty if you miss the deadline for filing, and 1.5 percent a month interest on the amount due. Failure to file also can result in the suspension of the corporation’s status in Delaware, which can prevent the taxpayer from engaging in future transactions. 

If you or your client would like assistance filing and paying the franchise tax and annual report, please reach out to your BKD Trusted Advisor™ in our State & Local Tax Services group or submit the Contact Us form below.

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