Key takeaways
- A Delaware LLC pays a flat $300 annual franchise tax, due every June 1, regardless of income or whether it did any business that year.
- Unlike Delaware corporations, an LLC does not file an annual report; it only pays the $300 tax.
- Missing the deadline adds a $200 penalty plus 1.5% monthly interest and can push the LLC out of good standing.
Before you start
- Understand that the $300 is a flat tax, not based on your revenue, so it is owed even in a year with no activity.
- Mark June 1 as the LLC deadline, which is different from the March 1 deadline that applies to Delaware corporations.
- Keep your Delaware registered agent current, because the state and your agent are how the franchise tax notice reaches you.
Who this is for
- Owners of a Delaware LLC who want to understand the annual franchise tax and avoid penalties.
- Founders comparing Delaware with other states on ongoing cost, not just formation cost.
- Foreign-qualified LLCs registered in Delaware that are also on the hook for the tax.
Delaware is one of the most popular states to form an LLC, but a lot of owners are surprised by the bill that arrives every spring. The Delaware LLC franchise tax is a flat $300 a year, due June 1, and it has nothing to do with how much you earned.
What the Delaware LLC Franchise Tax Actually Is
The name is a little misleading. The franchise tax is not a tax on profit or a fee for doing a certain volume of business. It is a flat annual charge for the privilege of keeping your LLC registered in Delaware, and every Delaware LLC owes the same amount.
- The amount is a flat $300 per year for every domestic and foreign-registered Delaware LLC.
- It does not change with your revenue, profit, or level of activity, so a dormant LLC owes the same $300 as an active one.
- It is separate from any federal income tax and from taxes in the state where you actually operate.
Flat means flat
Whether your Delaware LLC made nothing or made millions, the franchise tax is $300. Budget for it as a fixed yearly cost of keeping the entity alive, not a variable one.
LLC vs Corporation: Different Rules in the Same State
Delaware treats LLCs and corporations differently for this tax, and confusing the two is a common mistake. The corporation rules are more complex and use a different deadline.
| Entity | Annual report? | Tax | Deadline |
|---|---|---|---|
| Delaware LLC | No annual report | Flat $300 | June 1 |
| Delaware corporation | Yes, annual report required | Calculated (varies by method) | March 1 |
An LLC simply pays $300 by June 1. A corporation files a report and calculates its tax, due March 1.
LLC owners file nothing extra
If you have a Delaware LLC, there is no annual report to prepare. You pay the $300 and you are done, which is one reason the LLC is simpler to maintain than a Delaware corporation.
Ready to get a professional business address?
Activate your save office address in under 24 hours.
The June 1 Deadline and the Late Penalty
Delaware is strict about the date. The $300 is due on or before June 1 each year, and the penalty for missing it is fixed and applied automatically.
- Pay on or before June 1 to stay current; the payment is made online through the Delaware Division of Corporations.
- Missing the deadline adds a $200 penalty, plus interest at 1.5% per month on the unpaid tax and penalty.
- The penalty is applied automatically, so reasons for a late payment generally do not remove it.
Do not let it lapse
Unpaid franchise tax piles up year over year and eventually costs the LLC its good standing in Delaware. That can block financing, banking, and expansion until it is cured.
Good Standing, Your Registered Agent, and Your Address
Paying the franchise tax on time is part of what keeps a Delaware LLC in good standing, and the address side of that matters more than it looks. Delaware requires every LLC to keep a registered agent in the state, and that agent is a key channel for compliance notices.
- A Delaware registered agent with a physical Delaware address is required for the LLC to exist in the state.
- Franchise tax reminders and state notices route through that agent and the address on file, so both need to be current.
- If you later need to prove the LLC is current, you request a certificate of good standing, which depends on the tax being paid.
Because save office maintains a business address in Delaware among its seven cities, an owner can keep a consistent Delaware presence for mail and entity correspondence while a registered agent handles the statutory role. You can check any address with our free Address Checker and set up mail handling through save office onboarding. When you need to confirm the LLC is current, see our guide on the certificate of good standing.
Delaware vs California vs Texas: The Ongoing Cost Differs
Formation cost is only part of the picture. The annual cost of keeping an LLC alive varies a lot by state, and Delaware sits in the middle on this measure.
- Delaware: a flat $300 franchise tax, no annual report for the LLC, due June 1.
- California: a higher annual franchise tax floor plus a separate Statement of Information requirement.
- Texas: a franchise tax tied to revenue with a no-tax-due threshold, so many small LLCs owe nothing but still file.
For the details of those other two, see our guides on the California LLC franchise tax and Statement of Information and the Texas LLC franchise tax. Comparing the ongoing cost, not just the setup fee, is the better way to choose a state.
The Delaware LLC franchise tax is one of the simpler annual obligations in business compliance: a flat $300, due June 1, with no annual report to file. The trap is treating it as optional in a slow year, because the tax is owed regardless of income and the late penalty and interest add up quickly.
Put June 1 on your calendar, keep your Delaware registered agent and address current so the notices reach you, and pay online before the deadline. Do that and your Delaware LLC stays in good standing for the price of one predictable yearly payment.
Frequently Asked Questions
