Explore Delaware LLC Franchise Tax in with founder-focused guidance, entity steps, and launch considerations. Start your LLC or C-Corp with Lovie today.
By Omer Aydin ·
Every Delaware LLC owes a flat $300 annual franchise tax, due June 1 each year, starting the calendar year after formation. It does not matter whether the LLC earned millions, earned nothing, or never opened a bank account — the amount is the same $300, and there is no annual report to file alongside it. Pay late and Delaware adds an automatic $200 penalty plus 1.5% interest per month, and the LLC loses its good standing.
Here is everything about the tax — deadlines, payment mechanics, penalties, and the questions founders actually ask (like what happens to an abandoned LLC that never paid).
| Question | Answer |
|---|---|
| How much? | $300 flat — every Delaware LLC, every year |
| When? | June 1, annually |
| First payment? | June 1 of the year after formation (form in 2026 → first payment June 1, 2027) |
| Based on income? | No — flat regardless of revenue, profit, or activity |
| Annual report required? | No — LLCs pay the tax only (corporations file reports) |
| Late penalty | $200 + 1.5% interest per month |
| How to pay | Online through the Delaware Division of Corporations tax portal |
Despite the name, it is not a tax on income or on a "franchise" in the fast-food sense — it is a fee for the privilege of existing as a Delaware entity. Officially Delaware calls it the LLC annual tax. It is entirely separate from:
A dormant LLC owes the full $300. There is no zero-activity exemption, no proration for mid-year formation, and no reduction for single-member LLCs.
Your registered agent typically receives and forwards the annual notice, but the obligation exists whether or not a notice reaches you — calendar June 1 independently.
The consequences escalate on a predictable schedule:
Reinstatement (revival) is possible by filing a certificate of revival and paying all back taxes, penalties, and interest — meaning the cost of ignoring a Delaware LLC compounds at roughly $500+ per year of neglect.
If you are done with an LLC, cancel it properly instead of letting it rot: a Certificate of Cancellation costs $200 and stops the tax clock. The wind-down process is covered in how to dissolve a Delaware or Wyoming LLC.
That is really the Wyoming vs. Delaware question. Wyoming maintains an LLC for $60/year; Delaware's extra $240 buys the Court of Chancery, maximal contractual freedom, Series LLCs, and investor familiarity. For VC-track companies the premium is trivial; for a solo online business it is the single biggest recurring difference between the states.
$300, flat, for every Delaware LLC — regardless of income, activity, size, or member count. It is due June 1 each year, starting the year after formation.
June 1 of the calendar year after the LLC was formed. An LLC formed any time in 2026 — January or December — owes its first $300 on June 1, 2027. There is no proration.
An automatic $200 penalty plus 1.5% interest per month on the unpaid balance, and immediate loss of good standing. Three consecutive unpaid years lead to cancellation of the LLC's certificate.
Yes. The tax is for existing, not for earning. Dormant, empty, and never-used LLCs owe the same $300 until they are formally canceled with the state.
No — that requirement applies to Delaware corporations ($50 report + calculated franchise tax, due March 1). LLCs simply pay the flat $300 by June 1. No financial information is filed.
File a Certificate of Cancellation ($200) after winding up the LLC, or convert/domesticate the entity to another state. Until one of those happens, the $300 accrues every year — walking away does not end the obligation, it compounds it.
It is generally a deductible business expense for federal income tax purposes, like other state fees and taxes. Confirm treatment with your tax professional.
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Lovie keeps the June 1 deadline (and every other one) on your radar — form or move your Delaware LLC for $29 one-time plus Delaware's filing fee, with registered agent service at $79/year.
Form your company with Lovie — $29 one-time + state fees; registered agent $79/year.