By IncReg Editorial Team · Last updated: April 2026
Delaware LLC Franchise Tax: What You Owe, When It’s Due, and How to Pay
If you’ve formed a Delaware LLC — or you’re about to — the Delaware LLC Franchise Tax is the one recurring state bill you cannot ignore. It’s a flat fee, not a percentage of income, so it applies whether your company earned $0 or $10 million last year. The rules are simpler than most articles make them sound, but the penalties for missing the deadline are steeper than most founders expect. At IncReg, we file for entrepreneurs in 50+ countries and review every document before it goes to the State, and this is one of the first things we walk new clients through.
Every Delaware LLC owes a flat $300 franchise tax each year, due on or before June 1. There is no annual report to file and no formula to calculate — the amount is the same for every LLC regardless of revenue, members, or activity. Miss the deadline and Delaware adds a $200 penalty plus 1.5% interest per month on the unpaid tax and penalty. Payment is made online through the Delaware Division of Corporations.
What the Delaware LLC Franchise Tax Actually Is
The franchise tax is not an income tax. It’s a fee you pay for the privilege of existing as a Delaware entity — the state’s way of charging for access to its business-friendly laws and Court of Chancery. Per the Delaware Division of Corporations, every domestic and foreign LLC, LP, and GP formed or registered in Delaware owes $300 annually.
Worth noting: “foreign” here means formed in another US state or country and registered to do business in Delaware. It has nothing to do with whether the owner is a US citizen. A Delaware LLC owned by someone in Lagos, Lisbon, or Los Angeles owes the same $300.
Why Delaware Calls It a “Franchise” Tax
The word trips up a lot of first-time founders, especially those outside the US. No one is selling a franchise. It’s a historical term for a tax on the corporate charter itself — the right to operate as a state-chartered entity. You owe it even if you never opened a bank account, never made a sale, and never set foot in Delaware.
How Much Is the Delaware LLC Franchise Tax?
$300. Flat. Every year. Every LLC.
This is one of the cleanest parts of Delaware compliance and a major reason entrepreneurs choose the state. There’s no authorized shares calculation, no par value method, no revenue tiers. Those rules apply to Delaware corporations — LLCs skip them entirely.
If you operate a Series LLC, there’s one extra wrinkle most guides skip: each registered series (not the protected series under the parent) owes its own $75 annual tax on top of the parent’s $300, also due June 1. A standard single-member or multi-member LLC with no series structure just pays the flat $300.
When Is the Delaware LLC Franchise Tax Due?
The deadline is June 1 every year. Delaware does not extend this date, and it does not adjust for weekends in a way that helps you — plan to pay early rather than test the exact cutoff.
One common point of confusion for new filers: if you formed your LLC in, say, March 2026, your first franchise tax payment isn’t due until June 1, 2027. Delaware bills you for the prior calendar year. But if you formed in December 2025, you’d owe the $300 by June 1, 2026 — yes, for a company that existed for barely three weeks. The tax attaches to any LLC active in the Division’s records at any point during a given tax year.
What Happens If You Miss the June 1 Deadline?
Delaware doesn’t send friendly reminders if you’re late. The consequences stack quickly:
- $200 late penalty added automatically on June 2.
- 1.5% monthly interest on the tax and the penalty — so interest compounds on the combined $500 balance, not just the $300.
- Loss of good standing. The Division of Corporations will not file documents on behalf of an LLC that isn’t in good standing. That means no certificate of good standing for opening bank accounts, no foreign qualification in other states, no amendments, no certified copies.
- No access to Delaware courts. An LLC that’s not in good standing cannot bring a lawsuit in Delaware until it’s restored.
- Eventual cancellation. If the tax remains unpaid long enough, Delaware cancels the LLC’s certificate of formation and the entity ceases to legally exist.
Restoring good standing requires paying all back taxes, penalties, and interest — which for a three-year lapse can exceed $1,500 on what started as a $300 bill.
Skip the math and the reminders — IncReg tracks your June 1 deadline and files the franchise tax payment for you, so a missed email doesn’t turn into a $500+ problem.
How to Pay the Delaware LLC Franchise Tax
Payment is done online at corp.delaware.gov, on the “Pay LLC/LP/GP Tax” page. You’ll need your 7-digit Delaware file number (on your Certificate of Formation) and the LLC’s exact legal name. The portal accepts credit card for smaller amounts and ACH debit for payments over $5,000 — though a single-entity LLC payment will never hit that threshold.
Steps:
- Go to the Division of Corporations payment portal.
- Enter your file number and select your entity.
- Confirm the $300 amount (plus any penalty if you’re late).
- Pay by card or ACH and save the confirmation.
The system runs daily from 8:00 am to 11:45 pm Eastern. If you click “submit” on a credit card payment more than once, you may double-charge yourself — the state warns about this explicitly.
Do I Need a Delaware Registered Agent to Pay?
You don’t need the agent to make the payment, but you do need one to keep the LLC alive. Your registered agent is who receives the state’s tax notification each December. If you’ve lost track of your agent — or you’re using an unreliable budget service — you may never see the notice and miss the deadline entirely. This is the single most common reason non-US founders end up with penalties.
Do Delaware LLCs File an Annual Report?
No. This is one of the biggest differences between an LLC and a corporation in Delaware, and it’s often misreported. LLCs pay the $300 tax and that’s the entire compliance requirement at the state level — no form, no member list, no financial disclosure.
Delaware corporations are a different story. They file an annual report by March 1, pay a $50 report fee, and owe franchise tax calculated by one of two methods (minimum $175 using Authorized Shares, $400 using Assumed Par Value). If you’ve been reading Delaware compliance content and seeing talk of “authorized shares” and “par value,” that’s for corporations — ignore it if you have an LLC.
Delaware LLC vs Delaware Corporation: Franchise Tax at a Glance
| Requirement | LLC | Corporation |
|---|---|---|
| Annual tax amount | Flat $300 | $175 minimum (Authorized Shares) / $400 minimum (Assumed Par Value); max $200,000 |
| Due date | June 1 | March 1 |
| Annual report required | No | Yes ($50 fee) |
| Late penalty | $200 + 1.5% monthly interest | $200 + 1.5% monthly interest |
| Estimated quarterly payments | Never | Required if tax owed ≥ $5,000 |
| Calculation method | Flat fee, no calculation | Two methods — pick the lower one |
Does My Delaware LLC Owe Any Other Delaware Taxes?
If your LLC doesn’t conduct business in Delaware — meaning no office, no employees, no physical operations in the state — the $300 franchise tax is typically the only Delaware-level tax you owe. Delaware does not impose a state-level income tax on out-of-state LLC activities.
But the LLC still has US federal tax obligations through the IRS. A single-member LLC is treated as a disregarded entity by default; a multi-member LLC files a partnership return. You’ll need an EIN to open a bank account, file taxes, or hire anyone — and for non-US residents, getting an EIN without a Social Security Number means filing Form SS-4 by fax or mail, a process that takes several weeks directly through the IRS.
Forming from Outside the US?
The franchise tax rules are identical for non-resident owners — $300, June 1, every year. No US citizenship or residency is required to own a Delaware LLC, and the state doesn’t care where the member lives.
What does change is the operational friction around paying it. A foreign credit card may be declined by the Delaware payment portal. Wire transfers aren’t an option for this payment. And the tax notice mailed by your registered agent each December may never reach you if the agent’s communication is unreliable or your address has changed.
The bigger non-resident headache is not the franchise tax itself but everything around it: getting an EIN without an SSN, opening a US business bank account without being able to walk into a branch, and keeping your registered agent informed of address changes. These are the steps where founders in our 50+ countries hit the most friction, and they compound if the franchise tax deadline slips during the first year.
Frequently Asked Questions
What triggers Delaware franchise tax?
Existence in Delaware’s records triggers it. Any LLC, LP, or GP formed or registered in Delaware at any point between January 1 and December 31 of a given tax year owes the full $300 for that year. Revenue, activity, and business operations do not matter. Even a dormant LLC with no bank account and no transactions owes the tax until it’s formally cancelled with the Division of Corporations.
How does Delaware calculate franchise tax for an LLC?
It doesn’t calculate — it’s a flat $300 per LLC per year. The calculation methods you may have seen (Authorized Shares Method, Assumed Par Value Capital Method) apply only to Delaware corporations, not LLCs. This flat-fee structure is one of the main reasons entrepreneurs choose an LLC over a C-Corp when they don’t need to raise venture capital.
What is the minimum Delaware LLC franchise tax?
$300 — which is also the maximum. Unlike corporations, LLCs have no tiered structure. A Series LLC with registered series pays $300 for the parent plus $75 for each registered series, but a standard LLC’s total state tax is simply $300 per year, due June 1.
What are the disadvantages of a Delaware LLC?
The main disadvantage for a business operating outside Delaware is dual compliance. If you operate in another state, you’ll likely need to foreign-qualify there, pay that state’s fees, and maintain a registered agent in both states. For small, purely local businesses, this doubles the compliance burden. Delaware makes sense when you want its legal framework, investor-friendly reputation, or privacy protections — not as a blanket tax-saving move.
Can I pay the Delaware LLC franchise tax late without losing my LLC?
Yes, as long as you pay before the state cancels the certificate of formation. Once a payment is late, you owe the $200 penalty plus 1.5% monthly interest on the combined balance. Your LLC loses good standing immediately but can be restored by paying everything owed. If the tax stays unpaid for three years, Delaware cancels the entity and restoration becomes significantly more expensive and complicated.
Do I need to pay the franchise tax if my Delaware LLC made no money?
Yes. The Delaware LLC franchise tax is not based on income, profit, or revenue. It applies to every active LLC regardless of financial activity. The only way to stop owing it is to formally cancel the LLC by filing a Certificate of Cancellation with the Division of Corporations — and any outstanding franchise tax must be paid first.
Keep your Delaware LLC in good standing without thinking about it — IncReg handles formation, registered agent service, EIN, and annual franchise tax filings in one place, so you can focus on the business instead of the paperwork.