When is delaware franchise tax due

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All active Domestic Corporation Annual Reports and Franchise Taxes for the prior year are due annually on or before March 1st and are required to be filed online. Taxes are assessed if the corporation is active in the records of the Division of Corporations anytime during January 1st through December 31st of the current tax year. Willbrand Willbrand ThompsonHine. This advisory bulletin may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright.

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The gross assets come from U. Form , Schedule L tax form for the same year that the Company is filing its annual report. If the Company has not filed its taxes for that year yet, then a number from a recent balance sheet will suffice and can be amended later if necessary.

Startups can usually minimize franchise taxes by using the Assumed Par Value method, since it calculates tax as a function of total assets. The only pitfall to watch out for is that even a company with few assets could potentially owe very large franchise taxes if it authorizes a very large number of shares but then issues a tiny percentage of them.

So long as your issued shares constitute at least a third to a half of your authorized shares, the Alternative Par Method should work well for most startups. For Delaware corporations, franchise taxes are due March 1 st of every year for the previous calendar year. A company must pay its taxes by filing an annual report with the Secretary of State of the State of Delaware.

You should file the report online.