Delaware LLC Taxes
How to form an LLC in Delaware
This Quick Start Guide is a brief overview of how to form an LLC in Delaware.
Delaware LLC costs:
LLC formation cost: $90 (one-time fee)
Annual franchise tax: $300 (every year)
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Note: Our tax lesson is not as step-by-step as our LLC formation lessons, due to the uniqueness and variation among businesses. Taxes are usually not as straightforward as forming an LLC, and therefore, the information below is an overview, and not a comprehensive guide.
You will likely need to consult with a local tax professional to make sure you meet all your Delaware tax obligations. We recommend using Thumbtack.
Do it Yourself in Delaware
Annual Franchise Tax ($300)
All LLCs registered in Delaware are required to pay a $300 flat-rate tax every year in order to remain in compliance. See this lesson for instructions: DE LLC Annual Franchise Tax.
How is my LLC taxed in Delaware?
Delaware follows federal taxation rules. Having said that, whether or not you are a resident of the state will determine how you file and pay Delaware taxes.
If you’re a Single-Member LLC (1 member), you will be taxed like a Sole Proprietorship. DE Residents file their return on Form 200-01 and non-residents file their return on Form 200-02.
If you’re a Multi-Member LLC (2 or more members), you will be taxed like a Partnership and will file your return on Form 300 and DE Schedule K-1.
Business Services + Tax Forms
Individual Services + Tax Forms
Delaware does not impose a state sales tax.
Gross Receipts Tax
Delaware imposes a tax on the gross receipts of most businesses. Gross receipts are the total amount received from the sale of goods or services sold by the business. Gross receipts tax rates range from 0.1037% to 2.0736%, depending on your business activity. See here for chart: http://revenue.delaware.gov/services/current_bt/gr_rates.pdf
Tax Guides Based on Industry
For more info on taxes based on your business industry, see Delaware’s Tax Tips.
If You Have Employees
If you have employees, you are required to withhold State of Delaware withholding tax for each employee and submit this to the Delaware Division of Revenue. You register as a withholding agent by mail or online.
What other taxes/forms are due?
Depending on your industry, where your business is located, how you are taxed by the IRS, and whether or not you have employees, will determine which additional taxes and forms are due.
Some examples of other taxes and forms due are:
- Form 200
- Form 300/Schedule K-1
- Net Income Tax
- Motor Vehicle Fuels Tax
- Franchise Tax
- Property Tax
- And potentially more
Calculating your tax obligations in Delaware can be complicated and if done improperly can negatively impact your LLC.
Hiring a tax professional will not only help you keep your Delaware LLC in compliance, but it will also give you an advisor to go to for other business questions.
You’ll want someone who’s a good fit for your company, makes you feel comfortable, and is willing to answer all of your questions. It should be someone you like personally as well as professionally. We recommend talking with at least 2-3 people before making your final decision.