When Do Your Delaware Annual Franchise Tax Fees Begin?


information about annual franchise tax feesCongratulations to our clients who formed new entities in 2015.  Starting a new business is exhilarating, and we hope your burgeoning business venture has already encountered success.

However, this can also be a daunting time, because you are making a number of significant decisions, filing a lot of paperwork and trying to devise a budget. You are no doubt sifting through a multitude of information and you may find it difficult to keep track of all the moving parts, including the important due dates.  

If you read our weekly blog, you will notice there are several posts regarding annual Franchise Tax fees. You may be wondering if these fees pertain to your entity, and here is the answer: any entity that is formed in 2015 does not actually have to pay Franchise Tax fees in 2015. 

The state of Delaware imposes Franchise Tax fees in the same manner that the IRS files income tax returns. Essentially, your business files this year’s report in the following year. Thus, if an entity is formed in 2015, the first Franchise Tax filing will be due in 2016; the 2016 Franchise Tax filing will be due in 2017, and so on.   

Specifically, the Franchise Tax fee deadline for all incorporated entities is March 1 of each year, and the Franchise Tax fee deadline for all LLC entities is June 1 of each year.

This situation is typically the same for entities that file a renewal for void or forfeiture.  If an entity is restored in 2015, then the first Franchise Tax filing will be due in 2016.

With so many costs involved in starting a new company, it can be a relief to know you may not have to worry about a Franchise Tax expense until next year.

If you formed your new entity with Harvard Business Services, Inc., here is another moment of relief: your first year’s Registered Agent fee is included in our formation package, so the fees you paid included one year of Registered Agent service. Thus, you will not have to pay this fee until one year from the date of the entity formation. 

While it may feel like your new business is consuming all your resources, it can be comforting to know the annual Franchise Tax and Registered Agent fees are generally not affecting your company’s budget this year.

If you have any questions about annual fees your entity may owe, please feel free to call us at 1-800-354-2677 or email us at info@delawareinc.com. Our knowledgeable representatives will be happy to further research and clarify any concerns you may have.


Photo Credit: Andrew Magill

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