Impuestos de una LLC en Delaware: Guía Completa

The taxes that an LLC must face vary greatly depending on which state the LLC is registered in.

Delaware is one of the most chosen states to form an LLC due to its great tax advantages and the fact that it is one of the 5 states to offer anonymity. It is no surprise that more than 66% of Fortune 500 companies are incorporated in Delaware.

Let's see what taxes LLCs are subject to in Delaware!

How to register your LLC in Delaware?

Disclaimer: Business taxation is complicated and has numerous variants. Consult a tax professional before incorporating a company in the United States. This information is generic and each company has particular conditions.

Pass-Through Taxation

The first thing you should know when evaluating the taxation of LLCs in Delaware is that you are going to benefit from one of the main advantages of LLCs: Tax transparency or "Pass-Through Taxation".

This term means that theLLC will not pay taxes on its profits as an entity, but rather the income passes to the company's shareholders, and they must pay taxes according to their personal tax conditions in their country of tax residence.

Delaware Tax Election: LLC or Corp?

In Delaware, LLCs can choose to be taxed in several different ways:

Normally, companies choose to be taxed as "Corporations" to reduce the tax burden. It is important to note that this election will not change the way your LLC operates, only the way you will pay taxes.

Franchise Tax

Delaware LLCs do not have to file an annual report(unlike other states), but they do have to pay an Annual Franchise Tax of $300 each year.

This tax must be paid by every LLC formed in Delaware, regardless of income or business activity. This is a requirement to keep your LLC active and in state compliance.

Your Annual Franchise Tax must be paid online by June 1 of each year. If you do not pay it on time, you will be charged a fine of $200 and a penalty with 1.5% interest for each month of delay.

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Sales Tax

This paragraph is short: There is no sales tax in Delaware.

If a company is registered in Delaware, even if it physically carries out its activity elsewhere, its customers do not have to pay sales tax.

Gross Receipt Tax

Although Delaware does not impose a sales tax, companies doing business in Delaware are taxed on their gross receipts. Gross income is essentially total income without any deductions.

Gross income is the total amount received from the sale of goods or services sold by the company. Gross income tax rates range from 0.1037% to 2.0736%, depending on your business activity. Here you can see the list of activities and their corresponding rate.

Employer taxes

If you have hired employees in Delaware, you must register at «Unemployment Insurance Tax».

Then, companies that must pay «Employee Withholding Tax«, by registering online with the Delaware Division of Revenue.

Also There are "Self Employment Taxes", related to the income that the owners of LLCs usually obtain. A "Schedule SE" form must be completed to calculate how much you owe. This does not apply to Delaware LLCs considered Foreign Owned.

If your LLC in Delaware is "Foreign Owned"

If your LLC is considered Foreign Owned, that is, if all its members are not residents of the USA and are not physically located in the USA, the Delaware LLC will only be taxed in the United States on income of US origin. This means that income from other countries will not be subject to United States tax conditions.

A non-U.S. resident cannot own an Scorporation in the United States; Therefore, your Delaware company will be an LLC or a C corporation.

Keep in mind that corporations are usually taxed on their total income, including US and non-US income.

Conclusion

If at the time of open your LLC in the United States you choose the state of Delaware, you will have to pay $300 in franchise tax annually, you will not have to pay sales taxes, you may have to pay gross income taxes and employer taxes.

Each tax case is unique, and planning the taxation of your Delaware LLC is essential. Therefore, it is essential that you contact an accountant or tax advisor to support you in these issues.

Read More: What taxes should an LLC pay?

Ignacio Navarro is a Certified Public Accountant, graduated in 2020 from the National University of Tucumán. Founder of Start Companies since 2023, he advises clients worldwide on forming LLCs in the United States and on proper tax filing. His expertise combines legal, tax, and practical knowledge, offering a comprehensive service that spans from company formation to bank account setup and sales platform integration.