If a company is doing business in Delaware, that company will have two or more requirements:
1. If you form a corporation under Delaware law you will pay an annual Franchise tax for the privilege of incorporating in Delaware payable to the Department of State. The fee is based on the number of authorized shares. If you are incorporated in another state but doing business in Delaware, you must also register with the Department of State.
2. An annual corporate income tax return at the rate of 8.7% of federal taxable income allocated and apportioned to Delaware based on an equally weighted three factor method of apportionment. The factors are property, wages and sales in Delaware as a ratio of property, wages and sales everywhere. (Chapter 19, Title 30, Delaware Code)
3. Delaware does not have a state or local sales tax. Delaware does, however, have an annual business license requirement and a gross receipts tax is imposed on the seller of goods or provider of services. Sales of tangible property are subject to a retail or wholesaler license and gross receipts tax. The tax is imposed on the seller and remitted monthly or quarterly, depending on the business activity. (Chapters 21, 23, 25, 27, and 29, Title 30, Delaware Code)
4. Every employer maintaining an office or transacting business in Delaware who makes payment of wages or other remuneration to a resident or non-resident of this state must deduct and withhold an amount substantially equivalent to the tax estimated to be due from the employee. Delaware withholding is required provided such payments are subject to withholding under the Internal Revenue Code. (Chapter 11, Title 30, Delaware Code)
The tax requirements of numbers 2, 3 and 4 are administered by the Division of Revenue.
If you need more information about Delaware taxes, please visit the Department of Finance site at http://www.state.de.us/revenue/
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