At a glance
- Corporate tax
- 8.7% flat
- Tax on wages
- Up to 6.6%
- Sales tax
- None (gross receipts tax on sellers)
- Economic nexus
- None (no sales tax)
- Minimum wage
- $15.00/hr
- UI wage base
- $14,500
- New-employer UI rate
- 1.0%
- Paid leave program
- Delaware Paid Leave 0.8% (25+ employees)
- Annual report
- Mar 1 — $50 fee + franchise tax ($175 min)
2026 figures, each explained with its source on the area’s page. On top of the federal baseline.
Setup, in order
Keep a registered agent
From incorporationEvery Delaware corporation keeps a registered agent with a Delaware address. A company formed elsewhere that does business in Delaware registers as a foreign corporation and files its own annual report by June 30.
File the annual franchise tax report
By March 1 every yearFile the annual report with issued shares and total gross assets, so the tax can be computed on the assumed par value capital method if it is lower. Pay the franchise tax and the $50 report fee.
Get a business license
Before doing business in DelawareA company providing services or selling in Delaware takes out a Division of Revenue business license and registers for gross receipts tax, through Delaware One Stop.
Register for withholding and unemployment insurance
Before the first Delaware payrollRegister with the Division of Revenue for withholding and with the Department of Labor for an unemployment insurance account.
Report new hires
Within 20 days of the start dateReport each new or rehired employee to the Delaware State Directory of New Hires.
Enroll in Delaware Paid Leave
From 10 employeesRegister in the Department of Labor’s system for Delaware Paid Leave, file the quarterly Hours & Wage Report, and decide whether to deduct up to half of the contribution from employees.
Register with Wilmington
With an office or employees in WilmingtonRegister with the City of Wilmington for wage tax withholding and the head tax.
Buy workers’ compensation insurance
Before the first Delaware employee startsWorkers’ compensation insurance is required once the company has employees in Delaware.
The six areas
- AccountingAccounting and state tax in DelawareDelaware’s corporate income tax is 8.7% of apportioned federal taxable income, with separate-company returns and a single gross receipts factor. A Delaware corporation whose only Delaware activity is its registered office doesn’t file it, but still owes the franchise tax.Corporate income tax rate8.7%
- ReceivablesReceivables and sales tax in DelawareDelaware has no sales tax, so there is nothing to collect from Delaware customers. A company operating in Delaware instead pays a gross receipts tax on its own receipts, 0.3983% for services after a $100,000 monthly exclusion.Sales taxNone
- PayablesPayables and contractors in DelawareDelaware has no sales or use tax, so there is nothing to accrue on purchases. 1099s for Delaware contractors go directly to the Division of Revenue, and uncashed vendor checks are unclaimed property.1099-NEC and 1099-MISC to DelawareRequired, filed directly
- PayrollPayroll taxes and employer rules in DelawareDelaware payroll means withholding, unemployment insurance on the first $14,500 of wages, and, from 10 employees, Delaware Paid Leave. Wilmington adds a 1.25% wage tax.Minimum wage$15.00 an hour
- ComplianceCompliance and filings in DelawareEvery Delaware corporation files an annual report and pays franchise tax by March 1, keeps a registered agent, and reports unclaimed property, wherever it operates. The franchise tax is computed two ways, and the lower one has to be asked for.Franchise tax and annual report dueMarch 1
- AdvisoryAdvisory: credits and decisions in DelawareFor most startups Delaware is a corporate-law choice with three running costs: the franchise tax, the annual report and a registered agent. The planning questions are the franchise tax method, unclaimed property, and the R&D credit for any work done in Delaware.R&D credit, standard method10%
Who you register with
- Delaware Division of CorporationsAnnual franchise tax report, registered agent records, good standing
- Delaware Division of RevenueCorporate income tax, business license and gross receipts tax, withholding
- Delaware Department of LaborUnemployment insurance account and Delaware Paid Leave contributions
- Delaware State Directory of New Hires (Division of Child Support Services)New-hire reporting
- Delaware Office of Unclaimed PropertyAnnual holder report, verified report requests and audits
- City of Wilmington — Department of FinanceCity wage tax withholding, net profits tax, head tax
Hiring across the border
An employee who lives in one state and works in another is the most common way a startup ends up registered in two. These are Delaware’s neighbors.
Common questions
We’re a Delaware C-corp with no one in Delaware. Do we file a Delaware income tax return?
Usually not. A Delaware corporation whose only activity in the state is maintaining its registered (statutory) office is exempt from filing the Delaware corporate income tax return under 30 Del. C. § 1902(b)(6). It still owes the annual franchise tax and annual report to the Division of Corporations, which is a separate tax on being incorporated, not on income.
Do we collect sales tax from Delaware customers?
No. Delaware has no sales tax, so there is no economic nexus threshold, no exemption certificates and nothing to collect from Delaware customers.
Do we file 1099-NECs with Delaware?
Yes, if the contractor lives in Delaware or did the work in Delaware. Delaware participates in the Combined Federal/State Filing program, but the Division of Revenue says 1099-NEC and 1099-MISC information must be submitted to it directly, on the federal due dates.
Do we owe Delaware Paid Leave with a small team?
It depends on headcount. Employers with 25 or more employees contribute 0.8% of wages (medical 0.4%, family caregiving 0.08%, parental 0.32%) for 2025 and 2026. Employers with 10 to 24 contribute only the 0.32% parental component. Employers with nine or fewer are exempt but can join voluntarily. Up to half can be deducted from employees.
We operate entirely in another state. Do we still owe Delaware franchise tax?
Yes. The franchise tax is imposed on every Delaware corporation for the privilege of being incorporated there, unless it is specifically exempt. Where the company operates, sells or hires doesn’t change it. The Division of Revenue’s own instructions say so: a corporation exempt from the income tax return still owes the annual franchise tax.
Our Delaware franchise tax bill says $85,000. Do we really owe that?
Probably not. The invoice the state sends by default is computed on the authorized shares method, which charges by the number of shares in the charter: a company with 10 million authorized shares sees a five-figure number. The assumed par value capital method uses gross assets and issued shares instead, and for a typical early-stage company it comes out at or near the $400 minimum. You must file the annual report with issued shares and total gross assets to get it, and the lower tax applies only if the report says so.
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
- Delaware Division of Corporations — Annual Report and Tax Information
- Delaware Division of Corporations — How to Calculate Franchise Taxes
- Delaware Division of Corporations — Pay Taxes / File Annual Report
- Delaware Division of Revenue — Corporate Income Tax Instructions (CIT-TAX, 2025)
- Delaware Division of Revenue — Corporate Income Tax FAQs
- Delaware Division of Revenue — TIM 2025-2, HB 255 decoupling from the OBBBA
- Delaware Division of Revenue — Gross Receipts Tax FAQs
- Delaware Division of Revenue — Tax Tips for Occupations / General Service
- Delaware Division of Revenue — Business Licenses FAQs
- Delaware Division of Revenue — W-2 and 1099 Form FAQs
- Delaware Division of Revenue — BUS-RDC Instructions (R&D credit)
- Delaware Code — Title 30, Chapter 20, Subchapter VIII (§ 2070)
- Delaware Department of Labor — Unemployment Insurance Employer Services
- Delaware Department of Labor — Delaware Paid Leave
- Delaware Code — Title 19, Chapter 37 (Paid Family and Medical Leave)
- Delaware Office of Labor Law Enforcement — Wage & Hour
- Delaware Division of Child Support Services — Employers
- Delaware Office of Unclaimed Property
- Delaware Secretary of State — VDA Program, Post-VDA Compliance
- City of Wilmington — City Wage & Net Profits Taxes
- City of Wilmington — Doing Business in the City of Wilmington
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.