Every Delaware LLC pays $300/year regardless of income. Here is how it works and why it matters for your cost calculation.
By Alif Al Razi, Tax & Compliance Lead, Anonymousllc.co
Delaware\'s franchise tax for LLCs is a flat $300 annual fee. It is not based on income, revenue, or assets. Whether your LLC earns $0 or $10 million, you pay $300. This is fundamentally different from Delaware\'s corporate franchise tax, which uses complex share-based calculations. LLC franchise tax is simple: $300, every year, no exceptions.
The franchise tax is due June 1 of each year. The first payment is due June 1 following your LLC\'s formation. If you form in January 2026, your first franchise tax is due June 1, 2026. If you form in October 2026, your first franchise tax is still due June 1, 2027 - there is no proration for the first partial year.
Miss the June 1 deadline and Delaware charges a $200 late penalty plus 1.5% monthly interest on the unpaid amount. If the franchise tax remains unpaid, Delaware can forfeit your LLC - essentially suspending its good standing. Reinstatement requires paying all back taxes, penalties, and a reinstatement fee. Set a calendar reminder for May.
Payment is made online through the Delaware Division of Corporations portal at corp.delaware.gov. You can pay by credit card, debit card, or ACH. The portal requires your LLC\'s file number (assigned at formation). Anonymousllc.co provides this number in your formation documents.
| State | Annual state obligation | Amount |
|---|---|---|
| New Mexico | None | $0 |
| Wyoming | Annual report | $60 |
| Delaware | Franchise tax | $300 |
| Nevada | Business License + Annual List | $350 |
Delaware\'s $300 franchise tax is 5x Wyoming\'s annual report and infinity-x New Mexico\'s $0. Over 10 years, this adds up to $3,000 in franchise taxes alone - not including formation costs or RA renewal. This is the primary reason most non-VC buyers should choose Wyoming over Delaware.
No. The franchise tax is a payment obligation, not a disclosure obligation. Paying the franchise tax does not add your name to any public record. Your Delaware LLC remains anonymous regardless of franchise tax status. However, if you fail to pay and the LLC is forfeited, the LLC cannot conduct business - which indirectly affects your operations.
Delaware deliberately separates LLC taxation from corporate taxation. C-Corporations pay franchise tax on either the authorized shares method or the assumed par value capital method, which scales with share count and asset value and can run into thousands of dollars. LLCs sidestep that entire calculation. The Delaware Limited Liability Company Act sets a single fixed alternative entity tax of $300 for every LLC, LP, and general partnership registered in the state. There is no tiered rate, no revenue test, and no headcount adjustment. This predictability is one reason attorneys route holding entities and special-purpose vehicles through Delaware: the annual carrying cost is known in advance and never surprises the owner.
Delaware does not prorate the franchise tax for a partial year. If your LLC is active on any day of a calendar year, the full $300 is owed for that year. To stop the clock, you must file a Certificate of Cancellation with the Division of Corporations before the tax accrues for the next cycle. Owners who plan to wind down should time the cancellation to avoid paying another full $300. Anonymousllc.co handles the cancellation filing and confirms that all outstanding franchise tax is cleared, because Delaware will not accept a cancellation while a balance is open.
Anonymousllc.co tracks the June 1 deadline for every Delaware LLC we form and sends a reminder in May so the $300 is never missed. Your total first-year outlay is $407 (a $297 service fee plus the $110 state filing fee), and the franchise tax begins the following June. Because the tax is flat, budgeting is simple: $300 every year for as long as the LLC stays active. If Delaware is not the right fit, Wyoming carries only a $60 annual report, New Mexico carries no annual state fee at all, and both preserve the same anonymity on public filings.
No. The franchise tax is a privilege fee for being registered in Delaware. It is separate from any federal or state income tax your LLC or its members owe. A single-member LLC taxed as a disregarded entity still pays the $300, and so does an LLC that elects corporate taxation.
Delaware LLCs do not file an annual report or a franchise tax return. You simply remit the $300 payment through the Division of Corporations portal by June 1. This is simpler than the corporate process, which requires both an annual report and the tax.
Unpaid franchise tax compounds with the $200 penalty and 1.5% monthly interest, and Delaware ultimately declares the LLC forfeited. A forfeited LLC loses good standing, cannot sue in Delaware courts, and cannot obtain a certificate of good standing for banking or financing. Reinstatement requires clearing every past-due year plus fees.
No. Delaware is the most expensive of the anonymous states on annual carrying cost at $300. Wyoming charges a $60 annual report and New Mexico charges nothing each year. Choose Delaware for Court of Chancery access and VC readiness, not for low ongoing cost.