Legal Updates /

Delaware Annual Entity/Franchise Taxes Adjusted (House Bill 265 w/HA1, HA3)

By Marla H. Norton

On April 15, 2014, the Governor of the State of Delaware signed legislation increasing the annual tax payable to the Division of Corporations by limited liability companies (“LLCs”), limited partnerships (“LPs”) and general partnerships and registered limited liability partnerships that have filed statements of existence (collectively, “Registered Partnerships”), increasing the minimum annual tax for corporations that file under the default authorized shares method.

Commencing with the 2014 annual entity tax, payable in June of 2015, LLCs, LPs and Registered Partnerships will now pay $300 each year (a $50 increase).

Commencing with the 2014 annual franchise tax, payable in March of 2015, corporate franchise taxes will increase by $100, from $75 to $175 for corporations with  5,000 or less  authorized shares, from $150 to 250 for corporations  with 5,001 – 10,000 shares and  $250 for the first 10,000 shares and an additional $75 for each 10,000 thereafter.  The maximum corporate franchise tax will remain at $180,000, but the minimum will increase to $175.  Corporate franchise taxes calculated under the assumed par value capital method remain unchanged by the bill.

The Delaware Division of Corporations has announced that commencing July 1, 2014, it will begin collecting 2014 minimum entity/franchise tax at the increased rate from entities that dissolve or merge or convert out of Delaware.

For more information about these changes or Delaware LLCs, LPs, Registered Partnerships or corporations, please contact:

Marla H. Norton

Elizabeth Rocco

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