Form a Delaware LLC
Delaware LLC tax guide 2026

Delaware company taxation for owners abroad: US$400 a year, and usually nothing else

Updated 13 November 2026Division of Revenue, Division of Corporations and IRS rulesAbout 11 minutes to read
The short answer

Delaware taxes an LLC in two very different ways. Every Delaware LLC owes a flat annual tax, US$400 from the 2026 tax year, due each 1 June. That one has nothing to do with profit.

Delaware's income tax, gross receipts tax and business licence attach to business done in Delaware, not to being formed there. An LLC owned from abroad that sells to clients elsewhere usually meets none of them. Delaware has no sales tax.

Am I doing business in Delaware? Build my Delaware year
Flat, yearly US$400 Delaware LLC annual tax, due 1 June For the 2026 tax year onward, first paid at this rate on 1 June 2027. It was US$300 before.

Search "Delaware company taxation" and you get franchise tax horror stories, sales tax trivia and an 8.7% corporate rate, all mixed together. Most of it is about corporations doing business in Delaware. A founder abroad with a Delaware LLC sits in a much quieter corner of the code, and this page stays in it, with the Division of Revenue's wording behind every rule.

Key takeaways

Chapter 1

Formed in Delaware is not doing business in Delaware

The Division of Revenue's rule for LLCs is two sentences long. Classification follows the federal one, and members of an LLC that hasn't elected corporate status have Delaware filing duties "for each year the entity does business in Delaware". Corporations get an express carve-out too: keeping only a registered office in the state, without doing business there, doesn't create corporate income tax.

Doing business in Delaware
  • An office, shop or warehouse in Delaware
  • Staff working in Delaware
  • Selling goods or providing services in the state
Not on its own
  • The certificate of formation on file in Dover
  • A Delaware registered agent and address
  • A US bank account or payment processor

The rules are on the Division's LLC tax page and in 30 Del. C. chapter 19. For edge cases the Division runs a nexus questionnaire.

1
Key takeaway

Delaware's taxes on business start with business in Delaware. The paperwork in Dover doesn't count.

Chapter 2

The US$400 annual tax: the one Delaware bill you can't avoid

JUNE1

People call it the franchise tax. For an LLC the statute calls it an annual tax, and it's a flat amount: no shares, no assets, no profit test. Corporations pay a different franchise tax with an annual report; LLCs file no report.

An LLC formed in November 2026Flat tax
2026 tax year, due 1 June 2027US$400
2027 tax year, due 1 June 2028US$400
If paid late+US$200
Plus interest on tax and penalty1.5% a month
Unpaid for three years, the certificate of formation is cancelled under 6 Del. C. 18-1107 and 18-1108.

Our Delaware annual fees page has the first-payment dates by formation month, revival costs and a corporation franchise tax calculator.

2
Key takeaway

Form in late 2026 and the first US$400 arrives on 1 June 2027. Budget for it on day one.

Chapter 3

Gross receipts tax, and why Delaware has no sales tax

0%

Delaware doesn't charge shoppers a sales tax. It taxes the seller's gross receipts instead, which is why a store in Wilmington shows no tax on the till. The tax is on the business, before costs.

0.0945%Lowest gross receipts rate, depending on the activity
1.9914%Highest standard rate; petroleum can reach 2.4218%
US$100,000Typical monthly exclusion before tax starts; up to US$1,250,000 for some activities

It applies "when you engage in business in the State of Delaware", to the seller of goods or provider of services in the state. Goods a Delaware business ships straight to a customer outside Delaware aren't taxed, if the records show it. A Delaware LLC selling services from abroad to clients abroad has no Delaware gross receipts. Rates and exclusions: the Division's gross receipts tax FAQ.

3
Key takeaway

No Delaware customers or operations, no gross receipts tax and no Delaware business licence.

Chapter 4

Delaware income tax: 8.7%, but only after two triggers

Delaware's corporate income tax is 8.7% of the federal taxable income allocated to Delaware, set by 30 Del. C. 1902. An LLC reaches it only by doing both of these things.

Trigger oneCorporate electionThe LLC files Form 8832 and is taxed as a corporation federally
Trigger twoBusiness in DelawareProperty, payroll or sales in the state give Delaware a share
ResultForm CIT-TAX8.7% on the Delaware share; no minimum tax

Without an election on Form 8832, the LLC itself pays no Delaware income tax. Its members file in Delaware only for years it does business there. One wrinkle worth knowing: when a corporation is the single member, the Division says that member files corporate income tax, business licence and gross receipts returns for Delaware activity. Rate: the corporate income tax FAQ.

4
Key takeaway

The 8.7% belongs to corporations doing business in Delaware. Default LLCs owned from abroad don't meet it.

Chapter 5

IRS returns for a Delaware LLC with owners abroad

5472

The federal rules don't care which state you formed in, but they care a lot about who owns the LLC and where the work happens.

Federal filings for a foreign-owned Delaware LLC
OwnerWhat the IRS seesYearly filing
One person or company abroadA disregarded entity, treated as a corporation only for reportingPro forma 1120 carrying Form 5472, by 15 April; fax or post
Partners, any of them abroadA partnershipForm 1065 by 15 March; Forms 8804 and 8805 if it has US business income
Elected corporationA US corporationForm 1120 at 21%; Form 5472 when 25% or more is foreign owned

US income tax lands only on income effectively connected with a US trade or business, or on US-source passive income at 30% of the gross (FDAP). A treaty may reduce federal tax; states decide for themselves whether to follow treaties (IRS). For partnerships, the withholding rate on a foreign partner's share of that income is 37%, or 21% for a corporate partner.

The Form 5472 penalty is US$25,000 per form, plus more if the IRS writes and you don't fix it within 90 days (instructions). Our Form 5472 guide lists what to report, including money you put in and take out.

5
Key takeaway

A single foreign owner's Delaware LLC has one federal form every year, even with zero revenue.

Chapter 6

Your country of residence: the bill Delaware doesn't send

Resident in pick it

Delaware sets the wrapper. Your country sets the tax.

The profit your Delaware LLC keeps is still yours in the eyes of most residence countries, either now or when it's paid out.

  • Look-through countries tax you on the LLC's profit each year, like a sole trade.
  • Company-view countries tax dividends when paid, and may tax kept profit under foreign company rules.
  • Management rules can treat the LLC as resident where you run it from.

If your country treats the LLC as a company and the IRS treats it as transparent, credits for any US tax can fail to line up. That mismatch is the main reason to get local advice before trading, not after.

6
Key takeaway

Ask one thing locally: does my country look through a US single member LLC or not?

Chapter 7

Your Delaware year: tick what applies

About your Delaware LLC

What's due

    Dates are for a calendar tax year. A guide, not tax advice.

    7
    Key takeaway

    Untick everything and the year is two payments: US$400 to Delaware and one Form 5472, which the IRS charges nothing to file.

    Chapter 8

    Delaware company taxation questions, answered

    ?
    How is a Delaware LLC taxed if I live abroad?
    Delaware charges the flat US$400 annual tax. Its income tax, gross receipts tax and business licence apply only if the LLC does business in Delaware. Federally, the LLC is taxed as the IRS classifies it, and US tax follows US-connected income.
    Does Delaware have a sales tax?
    No. Delaware taxes sellers' gross receipts instead, at 0.0945% to 1.9914% depending on the activity, after monthly exclusions, and only for business in Delaware.
    What is the Delaware franchise tax for an LLC?
    LLCs pay a flat annual tax: US$400 from the 2026 tax year, due 1 June. Corporations pay a share-based franchise tax instead. See Delaware annual fees.
    What is Delaware's corporate income tax rate?
    8.7% of federal taxable income allocated to Delaware. An LLC pays it only after electing corporate tax status and only on business done in Delaware.
    Does a Delaware registered agent count as doing business there?
    Delaware's own statute exempts a corporation that keeps only a registered office without doing business in the state, and the Division ties LLC members' filings to years the LLC does business in Delaware. An agent alone isn't Delaware business.
    Is my Delaware LLC on a public register?
    Yes, without owners' names. Our Delaware company search guide shows exactly what the free search returns.
    Do you pay the Delaware tax and file Form 5472 for me?
    Our yearly plan is US$139 plus the US$400 Delaware tax at cost. Form 5472 preparation and filing is US$179 a year. Details on the Delaware LLC page.

    Changelog

    • 13 November 2026: first published.

    More reading: US LLC for non-residents, Wyoming vs Delaware LLC, Form 5472 guide, Delaware annual fees. A guide, not tax advice.

    Your Delaware LLC

    A Delaware LLC, with the US$400 shown up front.

    US$269 for year one: US$159 for us plus Delaware's US$110 filing fee at cost. After that, US$139 a year plus the US$400 tax at cost.

    See the Delaware LLC Search a Delaware company