Delaware Business Taxes: 2026 Rates, Forms & Deadlines

Which Delaware Tax Agencies Apply to Your Business

Delaware splits business taxes across two main state agencies based on whether you merely formed your entity in the state or conduct business there. A company incorporated in Delaware that does not conduct business in the state only deals with the Delaware Division of Corporations for annual franchise or entity taxes, and does not file a Delaware Corporate Income Tax return.

If you sell goods, provide services, maintain an office, or hire employees inside Delaware, you also report to the Delaware Division of Revenue and the Delaware Department of Labor. New businesses with operations or employees in the state register online through Delaware's One-Stop Business Registration, Licensing, and Withholding Services portal, while tax filings happen on the Delaware Taxpayer Portal at tax.delaware.gov.

By our calculation from the Delaware Division of Corporations fee schedule, a standard non-exempt domestic corporation owes at least $225 every year ($175 minimum franchise tax under the Authorized Shares Method plus the $50 annual report fee), which is $175 less than the flat $400 annual entity tax charged to a Delaware LLC.

• revenue.delaware.gov: Filing Corporate Income Tax
• corp.delaware.gov: Annual Report and Tax Instructions

Division of Corporations: Franchise Tax and Entity Tax Rules

Every entity formed in Delaware must stay in good standing with the Delaware Division of Corporations at corp.delaware.gov. If your corporation or LLC is active in the Division of Corporations records at any point between January 1 and December 31 of the current tax year, taxes are assessed for that year. Any Delaware corporation ending its existence or renewing its status to good standing must also file an Annual Report and pay all tax due before submitting a dissolution, merger, conversion, or renewal.

Domestic corporations must file their Annual Report and pay Franchise Tax online each year. Effective September 1, 2019, the Annual Report filing fee is $50 for non-exempt domestic corporations and $25 for exempt domestic corporations. Exempt domestic corporations do not pay franchise tax, while non-exempt corporations calculate their tax using one of two methods.

Limited Liability Companies (LLCs), Limited Partnerships (LPs), and General Partnerships (GPs) formed in Delaware do not file an Annual Report and instead pay their annual tax online. Foreign corporations (incorporated outside Delaware but registered to do business in the state) must file an Annual Report with the Delaware Secretary of State each year.

• Authorized Shares Method: Minimum franchise tax of $175, plus the $50 non-exempt Annual Report fee ($225 total minimum).
• Assumed Par Value Capital Method: Minimum franchise tax of $400, plus the $50 non-exempt Annual Report fee ($450 total minimum).
• Maximum Franchise Tax Cap: $200,000 under either calculation method, unless the corporation is identified as a Large Corporate Filer, which carries a $250,000 tax.
• Quarterly Estimated Franchise Tax: Corporations owing $5,000 or more must pay estimated franchise tax in four installments: 40% due June 1, 20% due September 1, 20% due December 1, and the remainder due March 1.
• Payment Rules and Late Penalties: Electronic payment via ACH Debit (Bank Identification Number 1225092400) is required for all Division of Corporations transactions over $5,000. Missing the March 1 corporate deadline or the June 1 LLC/LP/GP deadline triggers a $200 penalty plus 1.5% monthly interest on both the tax and penalty. Missing the June 30 foreign corporation deadline adds a $250 penalty to the $250 fee.

• corp.delaware.gov: Annual Report and Tax Instructions
• corp.delaware.gov: Annual Report and Tax Information

Division of Revenue: 8.7% Corporate Income Tax and Pass-Through Returns

The Delaware Division of Revenue administers corporate and pass-through income taxes for businesses that conduct business in Delaware. Corporations that conduct business in Delaware must file a return regardless of the amount, if any, of gross or taxable income. C corporations file Form CIT-TAX (with Form CIT-EXT for an extension and Form CIT-VCH for electronic payment vouchers), S corporations file Form SCT-RTN and Form SCT-TAX, and partnerships file Form PRT-RTN with Schedule K-1 (Form PRT-PSI). Holding companies and investment companies use Form CIT-EXM and Form CIT-HIC, and Headquarters Management Corporations file Form HMC-TAX.

Delaware's Corporate Income Tax rate is 8.7% of federal taxable income allocated and apportioned to Delaware. According to the Division of Revenue's Filing Corporate Income Tax guide, apportionment uses an equally weighted three-factor method comparing property, wages, and sales in Delaware as a ratio of property, wages, and sales everywhere under Chapter 19, Title 30 of the Delaware Code. Consolidated corporate income tax returns are not permitted in Delaware. Each member of a consolidated group must file a separate return, reporting income and deductions as if a separate federal return was filed.

• 1st Estimated Installment (50%): Due on or before the 1st day of the 4th month of the taxable year using Form CIT-EST.
• 2nd Estimated Installment (20%): Due on or before the 15th day of the 6th month of the taxable year.
• 3rd Estimated Installment (20%): Due on or before the 15th day of the 9th month of the taxable year.
• 4th Estimated Installment (10%): Due on or before the 15th day of the 12th month of the taxable year.
• Corporate Income Tax Penalties: Failing to pay, timely pay, or underpaying estimated installments carries a 1.5% monthly penalty. Late corporate income tax returns face a penalty of 5% per month (up to 50% of the tax due) plus 1% monthly interest from the original due date until paid, and an additional penalty of 1/2% per month (up to 25%) applies for failing to pay the tax shown due on a timely filed return.

• revenue.delaware.gov: Filing Corporate Income Tax
• revenue.delaware.gov: Gross Receipts Tax FAQs

Gross Receipts Tax and Business Licenses (Instead of Sales Tax)

Delaware does not have a state or local sales tax. Instead, every business conducting activity in the state must obtain an annual Delaware business license and pay a Gross Receipts Tax on the total gross revenues of the business, regardless of their source. The tax is levied directly on the seller of goods (tangible or otherwise) or the provider of services, rather than on the consumer.

No deductions are allowed for cost of goods or property sold, material or labor costs, interest expense, discounts paid, delivery costs, state or federal taxes, or any other operating expenses. Most businesses receive a monthly or quarterly gross receipts exclusion based on their business activity, starting at $100,000 per month and reaching as high as $1,250,000. Tax rates after the exclusion range from .0945% to 1.9914%, or up to a variable rate of 2.4218% on petroleum products.

Starting January 1, 2021 under TIM 2020-2, Delaware mandates online filing for gross receipts taxes through tax.delaware.gov using your Federal Employer Identification Number (or Social Security Number) and your Delaware Business License Number. All new businesses are automatically set up as quarterly filers, and the Division of Revenue uses a look-back period to determine whether a business files monthly or quarterly.

• Quarterly and Monthly Deadlines: Quarterly filers must file and pay on or before the last day of the first month following the close of the quarter. Monthly filers must file and pay on or before the 20th day of each month for the preceding month's aggregate gross receipts.
• Out-of-State Shipments vs. In-State Pickup: Goods shipped directly to a customer outside Delaware are exempt if you keep interstate shipment documentation. Retail sales picked up in Delaware are taxable regardless of the ultimate destination. Wholesale sales picked up in Delaware for out-of-state delivery and consumption are exempt only if you complete Form 373 (Wholesale Exemption Certificate) prior to or concurrent with the sale, keep a list of certificates, and note the exemption on each sales invoice.
• Gross Receipts Penalties: Late returns incur a 5% monthly penalty plus 0.5% monthly interest from the original due date until paid. Failing to pay the tax liability shown on a timely filed return adds a 1% monthly penalty, not to exceed 25%.

• revenue.delaware.gov: Gross Receipts Tax FAQs
• revenue.delaware.gov: Doing Business in Delaware

Worked Example: Calculating First-Year Delaware Taxes for Two Businesses

Worked example written by our team. The businesses and numbers are invented to show how Delaware's official rules apply to two common setups.

Scenario A (Remote Delaware LLC): Suppose a founder forms a software consulting LLC in Delaware on March 10, 2026, and does all work from outside the state with no Delaware office, employees, or in-state operations. Because the LLC is active on the Division of Corporations records during the calendar year, the LLC is subject to the flat $400 annual entity tax by June 1 of the following year. Because the company does not conduct business in Delaware, a Delaware business license and Delaware Gross Receipts Tax do not apply to the LLC.

Scenario B (In-State Delaware C Corporation): Suppose a business forms a non-exempt domestic C corporation operating entirely inside Delaware with $60,000 in federal taxable income for the year. First, the corporation files its online Annual Report and pays the $225 minimum total under the Authorized Shares Method. Second, because 100% of its property, wages, and sales are in Delaware, the 8.7% Delaware Corporate Income Tax applies to the $60,000 taxable income, which equals $5,220. During the taxable year, that $5,220 estimated liability breaks down into four installments: $2,610 by the 1st day of the 4th month, $1,044 by the 15th day of the 6th month, $1,044 by the 15th day of the 9th month, and $522 by the 15th day of the 12th month. Finally, if its quarterly gross receipts stay under its industry's exclusion threshold (starting at $100,000 per month for most activities), the corporation's taxable gross receipts after the exclusion are $0, though the business still maintains its annual business license and files via tax.delaware.gov.

• revenue.delaware.gov: Filing Corporate Income Tax
• revenue.delaware.gov: Gross Receipts Tax FAQs

Employer and Federal IRS Business Taxes

Every employer maintaining an office or transacting business in Delaware that pays wages to a resident or non-resident employee must withhold Delaware income tax and remit it using Form WTH-TAX (employees complete Form DE-W4, and qualifying military spouses use Form WTH-EXM). Payments must be made separately for each entity identification number. Delaware only requires an annual withholding reconciliation on Form WTH-REC with W-2 copies, due on or before the last day of January (or within 30 days of the final wage payment). Quarterly withholding reconciliations are neither required nor accepted.

Employers must also report hiring through the Delaware Business One Stop and pay Unemployment Insurance (UI) tax to the Delaware Department of Labor's Division of Unemployment Insurance (filing Form UC-1 to determine liability). Starting November 1, 2026, while the Division of Unemployment Insurance upgrades its online Employer (OES) portal payment module, employers can file reports on the OES portal but must mail payments to the UC8 Report and Payment Lockbox at DOL UI Tax, P.O. Box 5515, Binghamton, NY 13902. A new Delaware UI tax calculation system takes full effect in 2027. It selects a benefit ratio interval rate from eight schedules (A through H) based on the trust fund's Average High Cost Multiplier. That rate is then combined with industry and employer size add-on rates plus a 0.175% administration and technology add-on rate.

At the federal level, the IRS Business Taxes guide groups obligations into five categories: income tax, estimated taxes, self-employment tax, employment taxes, and excise tax. All businesses except partnerships file an annual income tax return, while partnerships file an information return. Sole proprietors and independent contractors with net earnings from self-employment of $400 or more (or $108.28 or more from a tax-exempt church) must pay Social Security and Medicare self-employment tax on Schedule SE (Form 1040 or 1040-SR) and make regular estimated payments. Employers must also handle federal income tax withholding, Social Security and Medicare taxes, Form 941, and Federal Unemployment Tax Act (FUTA) taxes on Form 940, while specialized businesses report excise taxes on Forms 720, 2290 (vehicles 55,000 pounds or more), 730, or 11-C.

• labor.delaware.gov: Passed 2027 Unemployment Insurance Tax Calculator
• revenue.delaware.gov: doing business tax forms

New Delaware Business Tax Compliance Checklist and Guides

Our team put together this six-step compliance plan so you can set up your accounts and avoid late filing penalties in your first year. You can also explore our dedicated Delaware guides for a small business accountant in Delaware, online bookkeeping in Delaware, business tax preparation in Delaware, and Delaware franchise and LLC tax filing.

Aldro is the cheapest way to get your business taxes done: $399 flat, with bookkeeping at $20 a month. The flat price covers everything tax for the year, including federal Form 1120 and state returns, multi-state returns at the same price, and the owner's personal return when the business income needs it. City and local business returns and state franchise tax reports are included, along with extensions and quarterly estimate reminders where we work out quarterly estimates. Each unfiled prior year is billed at the same flat price. Bookkeeping covers unlimited bank and card accounts, monthly reconciliation and statements, but not payroll processing or sales-tax filing. If you are switching from Bench or another service, we start within a week of getting the documents.

• Step 1: Get your federal EIN from the IRS to open business bank accounts and register on Delaware's state portals.
• Step 2: Calendar your annual Division of Corporations deadline (March 1 for domestic corporations, June 1 for LLCs, LPs, and GPs, or June 30 for foreign corporations). Watch out for deceptive mailed solicitations from Corporate Records Service asking for $125, and only file through corp.delaware.gov or your Delaware registered agent.
• Step 3: If you operate or hire inside Delaware, register online through Delaware's One-Stop Business Registration, Licensing, and Withholding Services portal for your Business License Number, withholding, and Unemployment Insurance accounts.
• Step 4: Register on the Delaware Taxpayer Portal at tax.delaware.gov using your EIN or SSN and Business License Number to file electronic quarterly Gross Receipts Tax returns.
• Step 5: If you operate a C corporation in Delaware, set reminders for the four corporate estimated income tax installments on Form CIT-EST during the taxable year.
• Step 6: If you have Delaware employees, submit your annual withholding reconciliation (Form WTH-REC) with W-2 copies on or before the last day of January.

• corp.delaware.gov: Annual Report and Tax Instructions
• revenue.delaware.gov: Filing Corporate Income Tax