What is the difference between the LLC annual tax and corporate franchise tax?

LLCs pay a flat $400 annual tax with no report, due June 1. Corporations file an annual report and calculate a variable franchise tax, due March 1. The two systems are separate; the corporate rules do not apply to LLCs.

Delaware LLC Annual Tax & Filing Requirements (2026)

Q: Do Delaware LLCs file an annual report?

No. Delaware LLCs do not file an annual report. They pay a flat $400 annual tax to the Division of Corporations by June 1 each year. Annual reports and a separate report fee apply to Delaware corporations, not LLCs.

Q: How much is the Delaware LLC annual tax?

The Delaware LLC annual tax is a flat $400 for the 2026 tax year, up from $300 under House Bill 400. It is the same for every LLC regardless of income, assets, or activity, and it is paid to the Division of Corporations.

Q: When is the Delaware LLC annual tax due?

The flat $400 annual tax is due on or before June 1 of the year following the tax year. For example, the 2026 tax is due June 1, 2027. There is no report to file, only the payment.

Q: What is the penalty for paying the Delaware LLC tax late?

Delaware adds a $200 penalty plus interest at 1.5% per month on the unpaid tax and penalty. If the tax stays unpaid for three years, the LLC's certificate of formation is canceled by operation of law under Section 18-1108.

Fact-checked by the LegalGlass editorial team against primary sources · Published Aug 6, 2026 · Last updated Aug 6, 2026

Delaware LLCs file no annual report. Instead, every LLC pays a flat $400 annual tax to the Delaware Division of Corporations by June 1 each year. Paying late adds a $200 penalty plus 1.5% monthly interest. Annual reports and a variable franchise tax apply to Delaware corporations, not LLCs.

Quick Answer

Annual report for LLCs?: No - LLCs file none
What LLCs owe: Flat $400 annual tax (2026), §18-1107
Due date: June 1 (for the prior tax year)
Late penalty: $200 plus 1.5% monthly interest
Paid to: Delaware Division of Corporations
After 3 years unpaid: Certificate of formation canceled (§18-1108)

Delaware LLCs Do Not File an Annual Report

The single most important fact for a Delaware LLC owner: your LLC does not file an annual report. Searches for a "Delaware annual report" mostly describe the requirement for corporations. A Delaware LLC's only recurring state obligation is a flat annual tax under Section 18-1107 of the Delaware Limited Liability Company Act (Title 6, Chapter 18). You send a payment; you do not file a report of income, members, or activity. This makes Delaware LLC compliance simple compared with states that require detailed annual filings.

The confusion is understandable, because Delaware is famous for its corporate "annual report," and many search tools and even some filing services use "Delaware annual report" loosely to mean any yearly Delaware obligation. For an LLC, there is no form that lists officers, no schedule of assets or shares, and no report fee - just a flat tax payment. If a website tells you a Delaware LLC must "file its annual report," read that as shorthand for paying the annual tax. Knowing the difference matters because the corporate rules carry a different deadline and a variable amount that do not apply to your LLC.

How Much the Annual Tax Is

For the 2026 tax year, the Delaware LLC annual tax is a flat $400. The amount rose from $300 under House Bill 400, which Delaware enacted in 2026. The same flat tax applies to Delaware limited partnerships and general partnerships. It is a fixed charge - every LLC owes $400 whether it earned millions or nothing at all. Registered series of an LLC each owe an additional tax as well. Because the amount does not depend on income, there is nothing to calculate; you simply pay the flat figure. See Delaware LLC cost for how this fits the overall budget.

When It Is Due

The flat $400 tax is due on or before June 1 of the year following the tax year. Under Section 18-1107, the tax for a calendar year is payable by the first day of June of the next year - so the tax for the 2026 tax year is due June 1, 2027. A newly formed LLC does not owe its first annual tax until the June 1 after its first full tax year. There is no report deadline separate from the payment; the June 1 date is the whole obligation.

There is no proration for a partial first year. An LLC formed in December 2026 owes the same $400 for the 2026 tax year as one formed in January 2026, and both are due June 1, 2027. Delaware does not reduce the tax for LLCs that were dormant, unprofitable, or never opened a bank account - it is a flat privilege tax for existing as a Delaware entity, not a tax on income. If you form an LLC you are not sure you will use, keep this in mind: the meter starts at formation and the flat tax follows every year until you file a Certificate of Cancellation.

How to Pay

You pay the annual tax online through the Delaware Division of Corporations. The state (and commercial registered agents) send reminders, but the obligation exists whether or not you receive one. To pay, you generally need the LLC's file number and the tax year. Payment can be made by credit card or electronic check. Keep the confirmation as proof of good standing - banks, lenders, and counterparties sometimes ask for evidence that the LLC is current. Your Delaware registered agent can also help ensure notices reach you.

Because the entire obligation is a single payment, the most common failure mode is simply forgetting. Delaware does not mail a paper bill to owners the way a utility does; if your registered agent's reminder lands in a spam folder or goes to an old address, the deadline can pass unnoticed. Two habits prevent this: keep your registered agent's contact information current so its reminders reach you, and set your own calendar alert for mid-May every year. Paying a week early costs nothing and removes any risk of the $200 penalty.

Penalty and Interest for Late Payment

If the $400 tax is not paid by June 1, Delaware adds a $200 penalty plus interest at 1.5% per month on the unpaid tax and penalty until it is paid. The penalty is fixed and the interest compounds monthly, so the amount grows steadily the longer the tax goes unpaid. An LLC that is not current loses good standing, which can block financing, contracts, and the ability to obtain a certificate of good standing. The table below summarizes the numbers.

Item	Amount (2026)	Authority
Flat annual LLC tax	$400	§18-1107
Due date	June 1 (for prior tax year)	§18-1107
Late penalty	$200	§18-1107
Interest on unpaid tax + penalty	1.5% per month	§18-1107
Cancellation for nonpayment	After 3 years unpaid	§18-1108

What Happens After Three Years Unpaid

If the annual tax remains unpaid for three years from its due date, the LLC's certificate of formation is canceled by operation of law under Section 18-1108, effective on the third anniversary of the due date. Cancellation for nonpayment does not erase the debt: if you later want to revive the LLC, you must pay all back taxes, penalties, and interest and file a certificate of revival. To close an LLC cleanly instead of letting it lapse, see how to dissolve an LLC in Delaware.

The practical lesson is that "just abandoning" a Delaware LLC does not make the cost go away for three years - it makes it grow. During that window the LLC accrues $400 for each year plus the $200 penalty and compounding 1.5% monthly interest, and it remains a public entity that could be served with a lawsuit. If you are finished with an LLC, filing the Certificate of Cancellation while you are still current is almost always cheaper and cleaner than waiting for the automatic cancellation under Section 18-1108.

LLC Tax vs. Corporate Franchise Tax

Delaware corporations have a different, more complex system, and confusing the two is a common error. A Delaware corporation must file an annual report and pay a franchise tax that varies with its shares or assets, due March 1. A Delaware LLC files no report and pays the flat $400 tax by June 1. If you own both entity types, track each deadline separately. If you are still choosing a structure, see what an LLC is and S-corp vs LLC.

The contrast is worth internalizing because it drives real dollars. A corporation's franchise tax can range from a few hundred dollars to a large sum depending on the calculation method, and it must file a report listing directors and officers by March 1. An LLC sidesteps all of that with a single flat $400 payment by June 1 and no report. For many small businesses, that simplicity - a known amount, one date, no disclosure of ownership - is a genuine advantage of the LLC form over a Delaware corporation, quite apart from the liability and tax differences.

Income Tax and Other Obligations

The flat $400 tax is separate from income tax. A Delaware LLC is a pass-through by default, so its profits are reported on the owners' federal returns; the IRS treats a single-member LLC as a disregarded entity and a multi-member LLC as a partnership unless it elects otherwise. If the LLC actually operates in Delaware, it also needs a Delaware business license and must pay gross receipts tax to the Division of Revenue - a distinct obligation from the annual tax. An LLC that only holds Delaware registration for out-of-state activity generally owes neither Delaware income tax nor gross receipts tax, but still owes the flat $400 tax. Get a free EIN from the IRS to handle federal filings.

How your LLC is taxed federally does not change the flat state tax, but it is worth understanding the two layers. By default the IRS treats a single-member LLC as disregarded and a multi-member LLC as a partnership; either can elect S-corporation or C-corporation treatment. Whichever election you make, the profits flow through to the appropriate return and the Delaware annual tax stays a flat $400. In other words, electing S-corp status can change your federal self-employment tax picture but has no effect on what Delaware charges the LLC each June. See S-corp vs LLC for that federal analysis.

Finally, keep good records of each year's payment. Because the only proof that an LLC is current is the state's record and your payment confirmation, save the receipt every year. If you ever need a certificate of good standing - lenders, banks, and parties in other states and countries frequently ask for one - Delaware will only issue it if your annual taxes are paid in full. A single missed $400 payment can hold up a financing or a transaction until it is cured with the penalty and interest, so staying current is as much about deal-readiness as it is about compliance. In short, the flat $400 payment is not just a tax - it is what keeps your Delaware entity in the "good standing" the rest of the business world relies on.

Frequently Asked Questions

Do Delaware LLCs file an annual report?

No. Delaware LLCs file no annual report. They pay a flat $400 annual tax to the Division of Corporations by June 1. Annual reports and a report fee apply to Delaware corporations, not LLCs.

How much is the Delaware LLC annual tax?

A flat $400 for the 2026 tax year, up from $300 under House Bill 400. It is the same for every LLC regardless of income, assets, or activity.

When is the Delaware LLC annual tax due?

On or before June 1 of the year following the tax year - the 2026 tax is due June 1, 2027. There is no report to file, only the payment.

What is the penalty for paying the Delaware LLC tax late?

A $200 penalty plus 1.5% monthly interest on the unpaid tax and penalty. After three years unpaid, the certificate of formation is canceled under Section 18-1108.

How is this different from corporate franchise tax?

LLCs pay a flat $400 with no report, due June 1. Corporations file an annual report and pay a variable franchise tax, due March 1. The systems are separate.

Sources

Delaware Division of Corporations - Annual Report and Tax Information (flat LLC tax; June 1 due date; $200 penalty; 1.5% interest; LLCs file no annual report).
Delaware Code, Title 6, Chapter 18, Subchapter XI - Taxation of LLCs (§18-1107); Cancellation for nonpayment (§18-1108).
Delaware Division of Corporations - Pay LLC/LP/GP Taxes (how to pay the annual tax).
Delaware General Assembly - House Bill 400 (annual tax increased to $400).
Justia - Delaware Code §18-1107, Taxation of LLCs.
Delaware Division of Corporations - How to Calculate Franchise Taxes (corporate system, for contrast).
Delaware Division of Revenue - Step 3: Licensing & Registration (gross receipts tax for in-state businesses).
IRS - Limited Liability Company (LLC) (federal pass-through treatment).
IRS - Get an Employer Identification Number (free EIN).
Legal Information Institute (Cornell) - 26 CFR 301.7701-3 (entity classification election).

LegalGlass provides general information for educational purposes and is not legal advice, is not a law firm, and is not a substitute for advice from a licensed attorney or tax professional. Laws, fees, and thresholds change; verify current amounts with the Delaware Division of Corporations before acting.