Every Delaware LLC owes a flat $300 tax by June 1 - with no return to file, it is the deadline non-residents forget. Miss it and a $200 penalty plus 1.5% monthly interest hit at once, your company loses good standing, and after three years it can be cancelled outright. Here is exactly how it works and what to do.
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The Tax With No Return
Delaware is one of the most popular states in the world for non-resident company owners - and one of the easiest places to lose your company by accident. The reason is a small, flat charge called the annual LLC tax.
Every Delaware LLC (as well as LP and GP) owes a flat $300 to the state each year, due on or before June 1. There is no annual report to complete, no income to calculate, no revenue threshold, and no form to submit - just the payment. Because there is nothing to "file," many owners assume there is nothing to do. That assumption is exactly how the deadline slips past.
The $300 is owed regardless of whether your LLC made a single dollar, or any dollars at all. A dormant Delaware LLC with no bank account and no activity still owes the same $300 as an active one.
Why $300 Turns Into $500 Overnight
If the $300 is not paid by June 1, Delaware adds a $200 penalty the moment you are late. On top of that, interest accrues at 1.5% per month on both the tax and the penalty.
So a $300 bill becomes a minimum of $500 the day after the deadline - and then keeps climbing every month it stays unpaid. What began as a routine annual charge quietly turns into a growing debt against your company.
What "Not in Good Standing" Actually Costs You
The moment the tax is overdue, your LLC stops being in good standing in Delaware. That status is not just a label. While the tax is outstanding, Delaware will not issue a Certificate of Good Standing for your company.
That certificate is what banks, payment processors, and other states routinely ask for. If you are trying to open or keep a business bank account, register your LLC to do business in another state, bring on an investor, or sell the company, a missing Certificate of Good Standing can stall the whole process - often at the worst possible moment.
The Three-Year Cliff
The most serious consequence is the one almost nobody plans for. Under Delaware law (6 Del. C. section 18-1108), if the annual tax goes unpaid for three years from its due date, the LLC's certificate of formation is cancelled - effective on the third anniversary of that due date.
In plain terms: leave the tax unpaid long enough and your company legally ceases to exist as a Delaware LLC. Bringing it back is not automatic. Reviving a cancelled LLC requires filing a Certificate of Revival and paying every year of back tax, plus all the accumulated penalties and interest (6 Del. C. section 18-1109). A bill that started at $300 a year can easily run into four figures by the time the company is restored.
The Mistakes Non-Residents Make Most
A few misunderstandings cause the majority of missed payments:
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Confusing it with the IRS. Delaware's $300 is a state charge. It is completely separate from your federal obligations, such as Form 5472 and the pro forma Form 1120 for a foreign-owned single-member LLC. Paying the IRS does not cover Delaware, and paying Delaware does not cover the IRS.
Assuming "no income means nothing owed." The $300 is flat and unconditional. Zero revenue, zero activity, and even zero bank account do not reduce it.
Assuming the registered agent pays it for you. Your Delaware registered agent forwards the annual reminder, but does not pay the tax out of their own pocket unless you have specifically arranged and funded that. The legal responsibility to pay stays with the company.
Falling for scam mail. Delaware's Division of Corporations openly warns about deceptive solicitations that mimic official notices. Pay only through the state's own portal or your genuine registered agent - never a random letter demanding a fee.
How and When to Pay
The tax is paid online through the Delaware Division of Corporations portal. You will need your entity's file number, and you can pay by credit card or by ACH from a bank account. The system is available daily between 8:00 a.m. and 11:45 p.m. Eastern Time.
The cleanest approach is simple: mark June 1 on your calendar every year, and pay in May so a bank delay or a busy week never pushes you past the line. If you use a registered agent or a service provider, confirm in writing who is responsible for pressing "pay" - you, or them.
If You Already Missed June 1
If the deadline has passed, the priority is to stop the interest from growing. Pay the outstanding tax and penalty as soon as you can, because the 1.5% monthly interest keeps compounding on the full balance until it is cleared. The longer you wait, the larger the gap between the original $300 and what you actually owe.
If your company has been unpaid for years and may already be cancelled, do not assume it is gone for good - a revival is usually possible, but it is worth getting the numbers and the paperwork right before you file.
Have Questions About Your Own Situation?
Every LLC is a little different, and it is easy to second-guess whether you have paid the right thing to the right authority. If you would like to talk it through, the MP Partner team is happy to help - no pressure, no hard sell, just clear answers about where your company stands.
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MP Partner Team
Specialist in US and UK company formation for non-residents. Helping international entrepreneurs build their legal presence.