Delaware tax compliance

I researched Delaware tax compliance for businesses (corporations, LLCs, partnerships) and collected authoritative, up-to-date guidance from Delaware state agencies (Division of Revenue and Division of Corporations) plus supporting summaries.

Below is a concise summary of the key compliance requirements, filing forms, deadlines, rates, penalties, and practical next steps for US business owners and LLC founders doing business in or incorporated in Delaware.

Summary of authoritative findings (high-level): - Corporate income tax: Delaware’s corporate income tax rate is 8.7% on federal taxable income allocated and apportioned to Delaware. The Division of Revenue provides Form CIT-TAX and requires corporations that conduct business in Delaware to file.

Estimated tax payments are required in four installments (50% due 4th month, 20% due 6th month, 20% due 9th month, 10% due 12th month). Penalties: 1.5% per month for underpayment of estimated installments; late returns penalty 5% per month up to 50% plus interest (1% per month) from original due date. (Source: Delaware Division of Revenue — Filing Corporate Income Tax) - Corporate apportionment: The Division of Revenue guidance indicates apportionment based on property, wages and sales (equally weighted three-factor method) for allocating federal taxable income to Delaware. (Source: Division of Revenue corporate guidance) - Franchise tax (corporations): Delaware requires corporations to file an annual report and pay franchise tax by March 1 each year.

Two calculation methods exist; taxpayers must use the method that produces the lower tax: - Authorized Shares Method: Minimum $175; tiers (5,000 or fewer = $175; 5,001–10,000 = $250; add $85 for each additional 10,000 shares or portion thereof); maximum $200,000 (higher cap $250,000 for Large Corporate Filers).

Estimated payments required if tax owed is $5,000 or more: 40% due June 1, 20% Sep 1, 20% Dec 1, remainder due March 1. Penalty for late filing/payment: $200 plus 1.5% interest per month. (Sources: Division of Corporations & Division of Revenue) - Assumed Par Value Capital Method: Uses total gross assets (Schedule L) and issued shares to compute an assumed par value capital; rate $400 per $1,000,000 (minimum $400 for this method); maximum $200,000 (or $250,000 for Large Corporate Filers).

Use the method that results in the lower tax. The Division of Corporations provides a franchise tax calculator. (Source: Division of Corporations "How to Calculate Franchise Taxes") - LLC / LP / GP taxes and annual fees: Domestic and foreign LLCs, LPs, and GPs formed or registered in Delaware must pay a flat annual tax of $300, due on or before June 1.

These entities are not required to file an Annual Report with the Division of Corporations. Penalty for non-payment: $200 plus 1.5% interest per month. (Source: Division of Corporations LLC/LP/GP Franchise Tax Instructions) - Gross Receipts Tax: Delaware imposes a gross receipts tax on the seller/provider (not the consumer).

Rates vary by business activity (approx. 0.0945% to 0.7468% depending on industry). Filing frequency is monthly or quarterly determined by a look-back period; new businesses default to quarterly filing.

Since Jan 1, 2021, online filing is mandatory (see TIM 2020-2); returns due monthly filers on or before the 20th day of each month for the prior month, quarterly filers due on or before the last day of the first month following the close of the quarter.

Penalties: 5% per month plus interest 0.5% per month; additional 1% per month (up to 25%) for failure to pay shown tax on a timely-filed return. (Source: Division of Revenue Gross Receipts Tax FAQs) - Sales & use tax: Delaware has no state sales tax; businesses should understand implications (no state sales tax collection, but gross receipts tax may apply to suppliers). (General state tax context) - Employer withholding and payroll: Employers must register for withholding/withholding accounts via Delaware One Stop.

Withholding filing/reconciliation: the State requires an annual withholding reconciliation form (WTH-REC) with W-2s due on or before the last day of January of the following year (or within 30 days of the last wage payment).

Electronic filing/portal registration is required; withholding due date tables and deposit schedules are published by the Division of Revenue. (Source: Division of Revenue Business Tax Forms — Withholding Tax) - Registration, business licenses, and filing portals: New businesses should register through Delaware One Stop Business Registration & Licensing (onestop.delaware.gov).

Corporate filings, annual reports and franchise tax payments are handled online through the Division of Corporations eCorp/pay tax portal; gross receipts tax filings use the state GRT online system. Division of Corporations sends annual notices to registered agents in December/January. (Sources: Division of Revenue Business Tax Forms; Division of Corporations paytaxes/payments page) - Penalties & interest (summary): Franchise/annual report late penalty $200 + interest 1.5% per month; LLC/LP/GP late penalty $200 + 1.5% monthly interest; gross receipts late penalty 5% per month + 0.5% interest per month + potential additional 1% per month up to 25% for underpayment; corporate income tax penalties for late returns and underpayment of estimates described above. (Sources: Division of Revenue & Division of Corporations) Practical compliance checklist (quick actions for business owners / LLC founders): 1.

Determine which taxes apply: corporate income tax (if you conduct business in DE), franchise tax and annual report (if incorporated in DE), LLC annual tax ($300) if LLC/LP/GP registered in DE, gross receipts tax if selling goods/services in DE, payroll withholding if you have employees in DE.

I researched Delaware tax compliance for businesses (corporations, LLCs, partnerships) and collected authoritative, up-to-date guidance from Delaware state agencies (Division of Revenue and Division of Corporations) plus supporting summaries.

Below is a concise summary of the key compliance requirements, filing forms, deadlines, rates, penalties, and practical next steps for US business owners and LLC founders doing business in or incorporated in Delaware.

Summary of authoritative findings (high-level):

8.7% on federal taxable income allocated and apportioned to Delaware. The Division of Revenue provides Form CIT-TAX and requires corporations that conduct business in Delaware to file.

Estimated tax payments are required in four installments (50% due 4th month, 20% due 6th month, 20% due 9th month, 10% due 12th month). Penalties: 1.5% per month for underpayment of estimated installments; late returns penalty 5% per month up to 50% plus interest (1% per month) from original due date. (Source: Delaware Division of Revenue — Filing Corporate Income Tax)

- Franchise tax (corporations): Delaware requires corporations to file an annual report and pay franchise tax by March 1 each year. Two calculation methods exist; taxpayers must use the method that produces the lower tax: - Authorized Shares Method: Minimum $175; tiers (5,000 or fewer = $175; 5,001–10,000 = $250; add $85 for each additional 10,000 shares or portion thereof); maximum $200,000 (higher cap $250,000 for Large Corporate Filers).

Estimated payments required if tax owed is $5,000 or more: 40% due June 1, 20% Sep 1, 20% Dec 1, remainder due March 1. Penalty for late filing/payment: $200 plus 1.5% interest per month. (Sources: Division of Corporations & Division of Revenue) - Assumed Par Value Capital Method: Uses total gross assets (Schedule L) and issued shares to compute an assumed par value capital; rate $400 per $1,000,000 (minimum $400 for this method); maximum $200,000 (or $250,000 for Large Corporate Filers).

Use the method that results in the lower tax. The Division of Corporations provides a franchise tax calculator. (Source: Division of Corporations "How to Calculate Franchise Taxes") - LLC / LP / GP taxes and annual fees: Domestic and foreign LLCs, LPs, and GPs formed or registered in Delaware must pay a flat annual tax of $300, due on or before June 1.

These entities are not required to file an Annual Report with the Division of Corporations. Penalty for non-payment: $200 plus 1.5% interest per month. (Source: Division of Corporations LLC/LP/GP Franchise Tax Instructions)

0.0945% to 0.7468% depending on industry). Filing frequency is monthly or quarterly determined by a look-back period; new businesses default to quarterly filing.

Since Jan 1, 2021, online filing is mandatory (see TIM 2020-2); returns due monthly filers on or before the 20th day of each month for the prior month, quarterly filers due on or before the last day of the first month following the close of the quarter.

Penalties: 5% per month plus interest 0.5% per month; additional 1% per month (up to 25%) for failure to pay shown tax on a timely-filed return. (Source: Division of Revenue Gross Receipts Tax FAQs)

- Employer withholding and payroll: Employers must register for withholding/withholding accounts via Delaware One Stop. Withholding filing/reconciliation: the State requires an annual withholding reconciliation form (WTH-REC) with W-2s due on or before the last day of January of the following year (or within 30 days of the last wage payment).

Electronic filing/portal registration is required; withholding due date tables and deposit schedules are published by the Division of Revenue. (Source: Division of Revenue Business Tax Forms — Withholding Tax)

- Penalties & interest (summary): Franchise/annual report late penalty $200 + interest 1.5% per month; LLC/LP/GP late penalty $200 + 1.5% monthly interest; gross receipts late penalty 5% per month + 0.5% interest per month + potential additional 1% per month up to 25% for underpayment; corporate income tax penalties for late returns and underpayment of estimates described above. (Sources: Division of Revenue & Division of Corporations) Practical compliance checklist (quick actions for business owners / LLC founders): 1.

Determine which taxes apply: corporate income tax (if you conduct business in DE), franchise tax and annual report (if incorporated in DE), LLC annual tax ($300) if LLC/LP/GP registered in DE, gross receipts tax if selling goods/services in DE, payroll withholding if you have employees in DE.

• Corporate income tax: Delaware’s corporate income tax rate is
• Corporate apportionment: The Division of Revenue guidance indicates apportionment based on property, wages and sales (equally weighted three-factor method) for allocating federal taxable income to Delaware. (Source: Division of Revenue corporate guidance)
• Gross Receipts Tax: Delaware imposes a gross receipts tax on the seller/provider (not the consumer). Rates vary by business activity (approx.
• Sales & use tax: Delaware has no state sales tax; businesses should understand implications (no state sales tax collection, but gross receipts tax may apply to suppliers). (General state tax context)
• Registration, business licenses, and filing portals: New businesses should register through Delaware One Stop Business Registration & Licensing (onestop.delaware.gov). Corporate filings, annual reports and franchise tax payments are handled online through the Division of Corporations eCorp/pay tax portal; gross receipts tax filings use the state GRT online system. Division of Corporations sends annual notices to registered agents in December/January. (Sources: Division of Revenue Business Tax Forms; Division of Corporations paytaxes/payments page)

Register promptly

use Delaware One Stop for revenue accounts and business licenses; use Division of Corporations eCorp for annual reports/franchise tax notices and payments.

Track deadlines (mark calendar)

March 1 (corporate annual report + franchise tax), June 1 (LLC/LP/GP $300 and first estimated franchise payment when applicable), gross receipts and withholding deposit due dates per published tables.

Use the official tools

Division of Corporations franchise tax calculator (to compare Authorized Shares vs Assumed Par Value methods), Division of Revenue online portal for gross receipts and corporate filings, and Division of Corporations eCorp payment system for franchise tax and reports.

Keep records

maintain cap table, issued vs authorized shares, Schedule L (Form 1120) total assets (for Assumed Par Value method), GRT exemption certificates (Form 373) for exempt wholesale sales, and payroll records for withholding reconciliations. 6. Plan estimated payments: if franchise tax or corporate income tax liabilities exceed thresholds ($5,000 for franchise tax; $500 for corporate income tax typically triggers estimated payments), follow the state’s estimated payment schedule to avoid penalties. 7. Consider professional help: corporate structures (authorized shares, par values) can dramatically change franchise tax liability — consult a tax advisor or registered agent to optimize for your situation. Next steps I took (research log): - Performed statewide web searches and extracted official state guidance. - Scraped and compressed official Delaware Division of Revenue pages for corporate income tax, gross receipts tax, withholding/withholding schedules, and business tax forms. - Retrieved Division of Corporations pages for franchise tax instructions, LLC/LP/GP alternative entity tax instructions, the franchise tax calculator and corporate annual report payment guidance. If you want, I can now: - Draft the full blog post (with SEO meta, slug, excerpt, headings, FAQs, and practical examples) tailored to US business owners and LLC founders using the content above; and/or - Create the newsletter content and email subject line formatted to your 'default' template; and/or - Prepare a step-by-step compliance checklist or timeline (calendar) you can download or integrate into accounting software. Citations and verbatim excerpts (from the pages used):