If you have a Delaware LLC, you owe $300 every year. That’s the Delaware LLC franchise tax — and missing it means the state will dissolve your company.
It sounds intimidating. It isn’t. This post covers exactly what the tax is, when it’s due, how to pay it, and what happens if you miss it.
This is part of our complete Delaware LLC formation guide →
What Is the Delaware LLC Franchise Tax?
The Delaware franchise tax is an annual fee that every LLC registered in Delaware must pay to maintain its good standing with the state.
It is not a tax on your income. It is not based on your revenue. It is not a percentage of anything. It is a flat $300 fee — every LLC pays the same amount, regardless of whether the business made $0 or $10 million last year.
Think of it as the cost of keeping your Delaware LLC alive and in good standing.
Who Has to Pay It?
Every LLC formed in Delaware is required to pay the franchise tax. This includes:
- LLCs that operate inside Delaware
- LLCs registered in Delaware but operating in other states
- LLCs with no revenue or no active business
- Single-member LLCs
- Multi-member LLCs
There is no exemption for inactive companies. If your LLC is registered with the state, the tax is owed. The only way to stop owing it is to formally dissolve the LLC.
How Much Is the Delaware LLC Franchise Tax?
$300 per year. That’s it.
Unlike Delaware corporations — which use a formula based on shares and can owe thousands of dollars — LLCs have a simple flat fee. No calculation required.
Delaware LLCs are not required to file an annual report — only corporations are. Your only recurring compliance obligation as an LLC is the $300 franchise tax each year.
When Is It Due?
June 1 every year.
The payment covers the prior calendar year. So the tax due on June 1, 2025 covers your LLC’s activity in 2024.
If June 1 falls on a weekend or holiday, the deadline moves to the next business day — but don’t count on that. File early.
What Happens If You Miss the Deadline?
Delaware charges a $200 late penalty if you don’t pay by June 1. On top of that, interest accrues at 1.5% per month on the unpaid balance.
More seriously: if you continue to not pay, Delaware will void your LLC’s good standing status. Eventually, the state will administratively dissolve your company. That means your LLC no longer legally exists — which creates real problems if you’re actively running a business, have contracts, or are trying to open or maintain a bank account.
Reinstating a dissolved LLC is possible, but it costs time and money. It’s far easier to pay $300 on time.
Set a recurring calendar reminder for May 15 every year. That gives you two weeks of buffer before the June 1 deadline.
How to Pay the Delaware LLC Franchise Tax
Delaware makes this straightforward. Here’s how to do it:
Step 1: Go to the Delaware Division of Corporations website
Navigate to corp.delaware.gov and look for the online franchise tax payment portal.
Step 2: Enter your LLC information
You’ll need your LLC’s file number (found on your Certificate of Formation) and the registered entity name.
Step 3: Pay the $300 fee
Payment is accepted by credit card or ACH transfer. You’ll receive a confirmation once payment is processed.
The entire process takes about five minutes.
Is the Delaware Franchise Tax Deductible?
Yes — the Delaware LLC franchise tax is generally deductible as a business expense on your federal tax return. It’s a state tax paid in connection with your business, which makes it deductible under ordinary business expense rules.
That said, tax situations vary. Talk to your accountant before claiming any deduction to confirm it applies to your specific situation.
Delaware LLC Franchise Tax vs. Delaware Corporation Franchise Tax
This is worth clarifying because it causes a lot of confusion.
LLCs: Flat $300/year. Simple.
Corporations: Calculated using one of two methods — the Authorized Shares Method or the Assumed Par Value Capital Method. Depending on the number of authorized shares and the company’s assets, this can run from $175 to hundreds of thousands of dollars per year. Most early-stage startups pay between $450 and $1,000 annually once they optimize the calculation.
If you have a Delaware LLC, you don’t need to worry about any of that. It’s $300, due June 1.
Does Your Delaware LLC Need to File an Annual Report?
No. Delaware LLCs are not required to file an annual report with the state — only corporations are.
Your only annual obligation as a Delaware LLC is to pay the $300 franchise tax by June 1. That’s the full extent of Delaware’s annual compliance requirement for most LLCs.
You do still need to maintain a registered agent in Delaware and keep your company in good standing — but that’s separate from the franchise tax.
Common Mistakes to Avoid
Forgetting it exists — If you formed your LLC and moved on with building your business, it’s easy to lose track of annual compliance. Don’t. One missed payment turns into a $200 penalty. Two or three missed years turns into a dissolved company.
Confusing LLC and corporation tax amounts — If you Google “Delaware franchise tax” and see large numbers, those are for corporations. Your LLC owes $300.
Thinking no revenue means no tax — The franchise tax is owed regardless of business activity. Zero revenue doesn’t exempt you.
Waiting until June 1 to pay — Pay in May. Give yourself time in case there are any issues with the payment portal or your banking details.
Forming from Outside the US?
The Delaware LLC franchise tax works exactly the same way for non-US owners. You owe $300 per year, due June 1 — regardless of where you’re based or where your business operates.
The payment is made online through the Delaware Division of Corporations website and accepts international credit cards. No US bank account is required to pay the franchise tax.
One thing to note: if your LLC has been administratively dissolved for non-payment and you need to reinstate it from outside the US, the process is more involved. It’s better to stay current.
Frequently Asked Questions
Is the Delaware LLC franchise tax the same as income tax?
No. The franchise tax is a flat annual fee to maintain your LLC’s good standing with the state. It is not based on your revenue or profit, and has nothing to do with federal or state income taxes.
What happens if I don’t pay the Delaware franchise tax?
Delaware charges a $200 late penalty plus 1.5% monthly interest on the unpaid balance. If the tax remains unpaid long enough, Delaware will administratively dissolve your LLC.
Do I owe the franchise tax if my LLC has no revenue?
Yes. The franchise tax is owed regardless of business activity. Even if your LLC has never made a dollar, you still owe $300 per year to maintain it.
How do I pay the Delaware LLC franchise tax?
Online at corp.delaware.gov. You’ll need your LLC’s file number and can pay by credit card or ACH. The process takes about five minutes.
Can I deduct the Delaware franchise tax on my federal taxes?
Generally yes — it’s typically deductible as a business expense. Confirm with your accountant based on your specific situation.
Bottom Line
The Delaware LLC franchise tax is $300, due June 1, every year. It’s one of the simplest compliance requirements in business — a flat fee with a clear deadline.
Pay it on time. Put it in your calendar. Don’t let a $300 bill turn into a $500 penalty or a dissolved company.
If you haven’t formed your Delaware LLC yet and want someone to handle formation, compliance, and registered agent service from day one, that’s what we do at IncReg →
Already formed and need a registered agent to make sure you stay on top of your annual obligations? Learn about our registered agent service →
Questions about your Delaware LLC’s annual compliance? [Reach out directly](https://increg.com/contact/) — you’ll hear back from someone who handles this every day.
This article is for informational purposes only and does not constitute legal or tax advice. Consult a qualified attorney or tax professional for advice specific to your situation.