Tax is one of the most significant issues to be handled after setting up your US company. Whether you comply with tax obligations or not is of great importance no matter where your company is located. In terms of tax, one of the highly advantageous states in the USA is Delaware. A company established in Delaware but operates in another state, doesn’t earn revenue in the state. In this way, the state is being exempted from tax requirements. Such companies only have to pay the Franchise Tax, which is a fixed fee.
Taxes in the United States
Franchise Tax and Payment Dates:
Franchise Tax is the fee imposed by the state of Delaware for the right or privilege to own a Delaware company. This tax has no impact on the revenue or the activity of the company.
The due date of the tax varies depending on the company type.
The Franchise Tax of a company is due no later than March 1st of each year. If the tax is not paid on or before March 1st, the state receives 200 USD as a delayed penalty and 1.5% interest per month.
Franchise Tax of Delaware LLC is paid before June 1st of each year. Limited Partnership Franchise Tax is also due no later than June 1st of each year. If the tax is not paid on or before June 1st, the government claims 200 USD as a delayed penalty and 1.5% interest per month.
Suppose you don’t want your company to be marked void by the Delaware Division of Corporations. In that case, you need to pay your Delaware Franchise Tax regularly and keep an active Delaware Registered Agent.
If you don’t meet all these requirements, your company could face an administrative dissolution. For instance, if your Delaware LLC fails to pay the Franchise Tax for three consecutive years, the State of Delaware will put in a Cancelled/Voided status for your company.
The same conditions also apply to your Delaware Corporation. If you don’t pay your Delaware Franchise Tax and deliver the Annual Report within two years, the State of Delaware will administratively dissolve your corporation.
In case you prefer to use it, Workhy offers services such as:
- Making Sales Tax payments,
- Quickbooks cleanup,
- 1040, 1040NR, 1040EZ, 1040ES,
- 1120, 5742 forms,
- and ITIN & EIN Application.
It also offers private consultancy services in the area of international tax in English, Spanish, and Turkish.
Incentives in the United States
- Trademark registration and advertising in the United States are supported by 60% of the business activities for the companies that benefit from government support and have a branch. This incentive is provided with a maximum of 150,000 USD.
- Trademark registration and advertising in the United States are supported by 60% of the business activities for the companies that benefit from government support but do not have a branch. This incentive is provided with a maximum of 250,000 USD.
Companies must have a domestic trademark registration certificate to benefit from advertisement, promotion, and marketing support. A company must have a trademark registration certificate in the country in which it will make a promotion or have an application to obtain this certificate. You can benefit from this support similar to rent assistance. The maximum validity of this support is four years.
Companies with a trademark registration certificate will have to pay certain fees to register and maintain their brands operating abroad. 50% of the expenses related to the brand registry abroad is supported with a maximum of 50,000 USD. You can benefit from this support for a maximum 4-year period.
Companies that apply for this support but don’t have a trademark registration certificate should obtain the certificate during the application period.
You can also see our blog post on the advantages of starting a company in the state of Delaware by clicking this link.