Delaware corporate taxes and fees

The following are taxation requirements and ongoing fees in Delaware:

• Annual report and franchise tax. Delaware requires corporations to file an Annual Franchise Tax Report. The due date for corporations is March 1. The annual report fee is $50 and the franchise tax is calculated based on the number of shares and par value. If the number of shares is above 5,000, the Annual Franchise Tax Report amount may increase.

• Taxes. For complete details on state taxes for Delaware corporations, visit Business Owner's Toolkit or the State of Delaware .

• Federal tax identification number (EIN). An EIN is required for corporations that will have employees. Additionally, most banks require an EIN in order to open a business bank account.

• State tax identification number. Delaware does not require a state tax identification number.

Delaware Corporations:

Who do NOT Conduct Business in Delaware are not required to file a Delaware Corporate Income Tax Return, regardless if incorporated under the laws of Delaware.

Who DO Conduct Business in Delaware:

Are required to file a Corporate Income Tax Return (regardless of the amount, if any, of gross or taxable income) using Delaware Corporate Income Tax Return Form 1100 or Delaware S-Corporation Reconciliation and Shareholders Return Form 1100S.

The Delaware Division of Revenue offers multiple options for filing your business taxes and/or paying your business taxes. Please keep the following in mind:

1. Corporate Income Tax Rate: 8.7% of federal taxable income allocated and apportioned to Delaware based on an equally weighted three-factor method of apportionment. The factors are property, wages and sales in Delaware as a ratio of property, wages and sales everywhere.

2. Consolidated Corporate Income Tax Returns: Not Permitted. Each member of a consolidated group must file a separate return, reporting income and deductions as if a separate Federal Income Tax Return was filed.

3. Estimated Tax Liability: To be prepaid by every corporation in four installments: 50% (due on or before the first day of the fourth month of the taxable year) 20% (due on or before the 15th day of the sixth month of the taxable year) 20% (due on or before the 15th day of the ninth month of the taxable year) 10% (due on or before the 15th day of the 12th month of the taxable year).

4. Penalties: a. A penalty of 1½% per month is imposed on the failure to pay, timely pay or underpay any estimated tax installments. b. Late Returns are subject to a penalty of 5% per month, up to a maximum of 50% of the tax due plus interest of 1% per month from the original due date until the tax is paid. In addition, an additional penalty of 1/2% per month, not to exceed 25%, is imposed for failure to pay (in whole or in part) the tax liability due on a timely filed return.