Delaware Incorporation Taxes

Delaware incorporation taxes are among the most favorable in the nation. Nearly six in 10 Fortune 500 companies are registered as Delaware corporations, though nowhere near that many are actually located in the state. Companies from around the United States can incorporate in Delaware, and many do just that in order to garner unmatched tax benefits.

Federal taxes are paid by all US corporations, but state taxes can vary widely from region to region. Delaware does not burden corporations with a state income tax, a fact which can cut taxation costs immediately for many businesses. Delaware likewise does not impose a personal property tax on corporations.

State franchise taxes, like federal taxes, must be paid by all corporations. Delaware's annual franchise taxes, however, are among the lowest in the nation. Some Delaware corporations can realize additional tax benefits by declaring themselves S-Corporations. This corporate distinction can allow businesses to pay only half of the general rate for Social Security and Medicaid taxes.

Taking Advantage of Delaware Incorporation Taxes

If you are interested in setting up a Delaware corporation, you should contact a registered agent in the state to talk over preliminary procedures. Registered agents can take care of many application tasks for you, such as applying for a Employer Identification Number and finding a business name that has not been taken. The services of agents, moreover, are required by Delaware state law, not only for setting up a corporation but for paying annual franchise taxes.