Delaware franchise tax for LLCs
Delaware LLCs pay a flat $300 annual franchise tax, due June 1 every year. There's no income tax filing, no annual report to the state, no calculations. Two minutes online at the Division of Corporations site, debit card, done. The only way to mess this up is to forget — and the late penalty is steep enough to be worth a calendar reminder.
The number: $300, flat, every year
Every Delaware LLC pays the same amount regardless of revenue, profit, number of members, or activity level. Dormant single-member with no revenue or 50-member with $50M in revenue, both owe $300. It's a privilege fee for being registered in Delaware, unrelated to income tax.
This is different from Delaware corporations, which calculate franchise tax via either the Authorized Shares Method or the Assumed Par Value Method — that's where the famous "$180,000 Delaware franchise tax bill" stories come from. LLCs are spared. $300, flat.
The deadline: June 1
Due every June 1 for the prior calendar year. Pay it in May to be safe; the Delaware Division of Corporations site occasionally gets slow on the deadline day with everyone filing at once.
First-year LLCs: if you formed in 2026, your first $300 is due June 1, 2027. Some founders get tripped up forming in November or December and assuming they need to pay $300 within weeks — you don't. The franchise tax cycle is annual and starts the year after formation.
How to pay (2 minutes)
- Go to
icis.corp.delaware.gov/Ecorp/EntitySearch/NameSearch.aspx - Search your LLC name
- Click your entity, then "Pay Taxes/File Annual Report"
- Confirm the entity details, click through to the payment screen
- Enter card details (Visa, MasterCard, Amex, Discover, or ACH). $300 + $2.50 card processing fee.
- Save the payment confirmation PDF
That's it. No annual report to fill out (LLCs are exempt), no income calculation, no membership disclosure. The state just wants the $300.
Late penalty: $200 + 1.5% per month interest
Miss June 1 and the penalty is automatic:
- $200 late filing fee — flat, applied immediately
- 1.5% monthly interest on the $300 unpaid principal — compounds monthly
- "Not in good standing" status — the state flags your LLC publicly. Banks, lenders, courts, and contractors can see it.
Three years late and the LLC owes ~$362 in penalties + interest ($200 flat fee + ~$162 interest) on top of the original $300 — about $662 all-in. Five years late and the state administratively cancels the LLC entirely — reinstatement requires paying everything owed plus a $200 reinstatement fee. Pay it on time.
Registered agent fee (separate, also annual)
Delaware requires every LLC to maintain a registered agent with a physical Delaware address. If you formed through a service, you're already paying them annually:
- Northwest Registered Agent: $125/yr
- ZenBusiness: $199/yr (after Year 1 promo expires)
- LegalZoom: $249/yr
- Harvard Business Services (Delaware incorporator): $50–$100/yr
- Delaware Registered Agents Inc.: $50/yr
RA fees are billed separately by the agent on whatever month you signed up. They're not part of the franchise tax payment to the state.
If you want to switch RA providers (e.g., from $249 LegalZoom to $50 Delaware Registered Agents Inc.), file the Statement of Change of Registered Agent with the state — $50 fee, takes 1 business day. Easy way to save $150–$200/yr.
Total Delaware LLC ongoing cost
| Item | Annual cost |
|---|---|
| Franchise tax (state) | $300 |
| Card processing fee | $2.50 |
| Registered agent (cheap end) | $50 |
| Registered agent (premium) | $249 |
| Total: $352–$551/yr | depending on RA |
If you also operate in another state
This is the math that catches most "Delaware LLC" owners by surprise. Delaware-formed LLC operating in California pays:
- Delaware franchise tax: $300/yr
- Delaware registered agent: $50–$249/yr
- California foreign-qualification filing: $70 (one-time) + $20 statement of information (annual)
- California minimum franchise tax: $800/yr
- California registered agent: $50–$249/yr
Total: $1,290–$1,888/yr instead of $850/yr if you'd just formed in California. The "Delaware advantage" is structural, not financial — it's about the Court of Chancery and the body of corporate law, not lower fees. For most operating businesses, forming in your home state is cheaper. See foreign qualification for the full math.
What about Delaware corporations?
This guide is LLCs only. Delaware C-corps and S-corps use a different franchise tax calculation:
- Authorized Shares Method: $175 minimum (5,000 shares or fewer) up to $200,000 maximum
- Assumed Par Value Method: usually much cheaper for startups with high authorized shares
- Plus a $50 annual report filing fee (corporations do file an annual report; LLCs don't)
If you're a Delaware C-corp seeing a $25,000+ franchise tax bill, you're probably defaulting to Authorized Shares when you should be using Assumed Par Value. That's a different article.
Common mistakes
- Confusing franchise tax with federal income tax. They're separate. Federal income tax (or pass-through to your personal return) goes to the IRS in April. Delaware franchise tax goes to Delaware on June 1.
- Confusing the LLC franchise tax with the corporation franchise tax. LLCs always pay $300 flat. Corporations have a calculation that can run into five figures.
- Paying the registered agent thinking it covers the franchise tax. They're separate bills. The RA invoice is from the RA company; the franchise tax payment is direct to the state.
- Letting the LLC lapse. Three years late costs ~$362 in penalties and interest on a $300 bill (~$662 all-in). Five years late and the state cancels the LLC entirely.
- Not budgeting for foreign qualification. If you operate in another state, you owe that state's fees too — usually doubling or tripling the all-in cost.
Bottom line
$300 to Delaware on June 1, every year, paid online in about two minutes — plus $50 to $249 to your registered agent on whatever month you signed up. Set a calendar reminder for May 25 to pay before the rush.
If you're choosing a registered agent for a Delaware LLC, Northwest at $125/yr is the privacy benchmark. If you want the formation + RA bundled, ZenBusiness Pro is the cleanest checkout. Cheapest pure RA: Delaware Registered Agents Inc. at $50/yr.
Confirming your franchise tax payment posted
After paying the franchise tax online via the Delaware Division of Corporations' payment portal, the system generates an immediate digital confirmation receipt with a transaction reference number. This receipt should be downloaded and retained in your records. However, confirmation of receipt does not guarantee that the payment has officially posted to your LLC's account with the state; processing delays can occur, particularly if paying via ACH or wire transfer instead of credit card.
To verify that the payment has posted and cleared, check the Division of Corporations' online entity search portal 2-3 business days after submission. Search your LLC by name or Delaware file number, then review the LLC's detail page. Once the payment is processed, the system updates the franchise tax status to "Paid" and displays the payment date. If the status still shows "Due" or "Outstanding" more than three business days after payment, contact the Division of Corporations directly at (302) 739-3073 to confirm the payment's status and obtain a reference number for follow-up if needed. This verification step prevents the risk of inadvertently missing the deadline due to processing delays outside your control.
Frequently asked questions
What happens if I miss the Delaware franchise tax June 1 deadline?
Delaware assesses a $200 late penalty plus 1.5% monthly interest on the unpaid $300 franchise tax. The LLC's status with the state shifts to 'Not in Good Standing' until the tax, penalty, and interest are paid. Continued non-payment for multiple years results in the LLC being cancelled by the state and the registered agent dropping the LLC, after which restoring the LLC requires a separate revival filing with cumulative back-taxes and revival fees.
Do I have to pay Delaware franchise tax if my LLC made no money?
Yes. Delaware's LLC franchise tax is a flat $300 annual amount unrelated to revenue, profit, or activity. The tax is owed for every Delaware-registered LLC regardless of whether the entity transacted any business in the prior year. An LLC that never operated still owes the $300 each year until it is formally cancelled with the Delaware Division of Corporations.
Is Delaware franchise tax different from Delaware income tax?
Yes — they are unrelated obligations. The franchise tax is a flat $300 annual fee owed by every Delaware LLC for the privilege of being registered in Delaware, regardless of where the LLC operates. Delaware income tax is owed only when the LLC has Delaware-source income — for example, employees working in Delaware or customers paying for goods or services delivered in Delaware. An LLC formed in Delaware but operating entirely in another state owes the franchise tax but no Delaware income tax.
Can I pay Delaware franchise tax online?
Yes. The Delaware Division of Corporations operates an online payment portal at corp.delaware.gov where the franchise tax can be paid with credit card, ACH, or wire transfer. The portal accepts payment any time before the June 1 deadline and issues immediate confirmation. Mailed payments are accepted but take longer to post and risk arriving after the deadline.
What is the late penalty for Delaware LLC franchise tax?
The penalty structure is straightforward: a flat $200 late fee assessed the day after the June 1 deadline, plus 1.5% monthly interest on the unpaid balance starting from June 2. Interest compounds monthly. On a $300 franchise tax bill paid 12 months late, the total owed is roughly $556 ($300 tax + $200 penalty + ~$56 cumulative interest). Penalty and interest are non-negotiable; the Division of Corporations does not waive them.
Do I need to file an annual report with Delaware franchise tax?
No, Delaware LLCs do not file an annual report. The June 1 obligation is the $300 franchise tax payment only. Delaware corporations are different — they file an annual report and pay franchise tax that scales with authorized shares. The LLC obligation is simpler: pay $300 each year by June 1, and the LLC remains in good standing without any informational filing.