Delaware Increases Annual Entity/Franchise Taxes

On April 15, 2014, Delaware Governor Jack Markell signed into law legislation that increases the annual taxes paid by companies to the state. The new law is retroactive to January 1, 2014, which means companies registered in Delaware will be liable to pay the increased taxes for 2014 and future years. The tax increases apply specifically to Delaware’s annual entity tax and franchise tax. Below we have provided a summary illustrating how companies in Delaware and doing business in Delaware will be impacted.

Annual Entity Tax

Starting in 2014, limited liability companies, limited partnerships and registered partnerships are required to pay $300. This represents a $50 increase over the 2013 annual entity tax.

Annual Franchise Tax Increase

In addition to the entity tax, companies that pay an annual franchise tax will also experience an increase. What a corporation will pay is determined by the number of authorized shares. Since

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