Mon 19 Oct 2015 | By:

Delaware Business Taxes: All You Need to Know

Small Business Taxes

One of the key understandings you have to learn when forming a business in Delaware (LLC, Corporation, DBA, etc) is that your Delaware business tax obligations should be a top priority.

An in-depth understanding of what these Delaware business taxes entail for your business will ensure that you are always ahead of what, how, and why you need to comply with them.

That said, your business tax requirement isn’t just composed of a single tax obligation. There are actually several tax obligations your business might qualify for depending on a number of factors.

The nature of your business can influence your tax requirements as well as its structure. Having said this, it’s important that you stay alert with all your tax obligations. This guide can be your source of reference to comply with your Delaware business tax requirements.


1) Delaware Corporate Income Tax

One of the several tax requirements your business may be obliged to comply with each year of operation is the Corporate Income tax.

Corporate Income tax rates may vary from one state to another, but usually are a flat rate depending on the amount of income your business makes in a year. A usual rate of 4% to 9% is common, but still, you need to refer to the state’s policies to get a clearer view of the estimated cost you have to pay. Check out this guide for more details on Corporate Income Tax.


2) Delaware Federal Tax Forms and Publications

As discussed earlier, there are tons of requirements for complying with your business taxes in Delaware.

There are forms and requirements for corporate income tax, sales and use tax, franchise tax, etc. that you need to sort out. However, you can always refer to Delaware’s Department of Revenue tax forms and publications guide to help ease the stress of filing your tax obligations.

Aside from the guide on taxes, general information on how to start a business in Delaware and frequently asked questions can also be found on the link. Highly recommended!


3) Delaware Franchise Tax

In Delaware, aside from the standard Corporate Income tax, the state also imposes a Franchise Tax. This type is tax is imposed for any company given the right to operate a business within the state.

Whether you qualify for this type of tax is also dependent on the business structure you have incorporated in. The rate for the calculation of your business’ franchise tax can be a flat rate computation or one that is dependent on your business’ net value, whichever applies.


4) Delaware Sales and Use Tax

In lieu of the usual sales tax imposed by some states, the state of Delaware has no sales tax, but instead it imposes Gross Receipts tax. Gross receipts include all receipts obtained from all the goods sold as well as services offered within the state of Delaware.


(Bonus) A Powerful Tool

Startup Tools and ResourcesJust as you need resources to help you sort out the requirements when completing your Delaware business tax obligations, you also might need a few tools to help comply these requirements in the short and long term.

The tools below are an example of powerful applications that will make your life as a business owner significantly easier when managing your Delaware business taxes and finances.

A Small Business Accounting Software

FreshBooks, Xero, and QuickBooks are small business accounting softwares that will simplify the accounting process for you. They help you keep track of your finances, taxes, and expenses – on a budget. Visit each review and start a free trial to see which is right for you.

As a reminder, this business taxes guide is not legal advice and does claim to be one. It should only be used as an informational guide. For detailed questions on Delaware business taxes or starting a new business, you can refer to a lawyer or accountant.

About Liesha Petrovich

Liesha is a small business owner of 20 years, host of Startup Savant, the owner of a karate dojo in Maine, and creator of Work Mobly. During free time she's with her family and working on a Doctorate in Entrepreneurship.