The Delaware Franchise Tax and Annual Report deadline was March 1st! If you didn’t know that, your report is late!
For a lot of clients with Delaware corporations, franchise tax season seems straightforward: file the annual report, pay the tax, and move on.
But, the Delaware Secretary of State does sometimes follow up requesting more information.
That usually happens when a corporation uses the Assumed Par Value Method to lower what would otherwise be a steep franchise tax bill, sometimes a heart-attack-inducing one. Because that method ties the tax calculation to the corporation’s actual assets, Delaware often asks for supporting documents, including the balance sheet for the tax year in question.
The catch is that these follow up requests often go to the registered agent. If nobody is actively checking that mail, the request will sit there unnoticed until the next filing season.
At that point, you’re stuck dealing with last year’s problem while also trying to get the current year’s filing done on time (by March 1st!). In some cases, the corporation’s online account is flagged, which then requires a call to customer service at the worst possible moment.
The takeaway is simple: if your corporation is incorporated in Delaware, make sure someone is actually monitoring your registered agent mail. Missing a follow-up notice can turn a manageable issue into a much bigger headache later.
Thanks for reading…and remember, be kind to your back while shoveling!