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1. If you form a corporation in Delaware, you must pay an annual Franchise Tax for the privilege of incorporating in Delaware. This Franchise Tax is payable to the Delaware Division of Corporations. The fee is based on the number of authorized shares within the corporation.
If incorporated in another state but doing business in Delaware, you must still register with the Delaware Division of Corporations.
Visit the Division of Corporations’ How To Form a New Business Entity for more information or contact:
Delaware Division of Corporations
PO Box 898
Dover, Delaware 19903
Phone: (302) 739-3073
2. If you form a corporation in Delaware, you must file Corporate Income Tax with the Delaware Division of Revenue at a rate of 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 (Chapter 19, Title 30, Delaware Code).
3. For all businesses: Delaware does not have a state or local sales tax. Delaware does, however, have an annual business license requirement, as well as a gross receipts tax that is imposed on the seller of goods or provider of services. Sales of tangible property are additionally subject to a retail or wholesaler license and gross receipts tax. These taxes are imposed on the seller and remitted monthly or quarterly, depending on the business activity, to the Delaware Division of Revenue (Chapters 21, 23, 25, 27, and 29, Title 30, Delaware Code).
4. For all businesses: Every employer maintaining an office or transacting business in Delaware who makes payment of wages or other remuneration to a resident or non-resident of this state, must deduct and withhold an amount substantially equivalent to the tax estimated to be due from the employee. Delaware withholding is required, provided such payments are subject to withholding under the Internal Revenue Code (Chapter 11, Title 30, Delaware Code), and is remitted to the Delaware Division of Revenue.
The Delaware Division of Revenue administers the tax requirements for numbers 2, 3 and 4 (above).
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