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Delaware Tax and Fee Changes Signed Into Law

By: John Morrissey on Jul 6, 2017 9:00:00 AM

On July 2, 2017, Delaware Governor John Carney signed House Bill No. 175 into law. The bill amends Title 6, Title 8 and Title 12 of the Delaware: Code, which relate to various taxes and fees charged by the Secretary of State.

Highlights include the following:

Uniform Commercial Code Fee Changes
Effective August 1, 2017, Section 9-525 is amended, resulting in an increase in the filing fee for paper UCC filings to $125 from $100 plus a $25 per name fee when there are more than two names required to be indexed plus $2 per page in excess of 4 pages.

Penalty for Late Filing of Annual Franchise Tax
Effective January 1, 2018, Title 8, Section 502(c) is amended to increase a domestic corporation’s penalty for failure to file its annual franchise tax report on or before March 1 to $200 from $125.

Corporate Franchise Tax Changes  
Certain annual corporate franchise tax rates and calculations are changed in amendments to Title 8, Section 503.

The bill increases the corporate franchise tax maximum to $200,000 from $180,000 for most corporations, effective for the tax year beginning on January 1, 2017. For exception, see Large Corporate Filers section below.

Effective January 1, 2018, the assumed par value multiplier for calculation of the corporate franchise tax has been increased to $400 from $350 for each $1,000,000 or fraction thereof in excess or $1,000,000 of assumed par value capital.

The fee under the authorized shares franchise tax calculation method for corporations with over 10,000 shares has been increased to $250 plus $85 (was $75) for each additional 10,000 shares or portion thereof, effective January 1, 2018.

The fee under the assumed no par capital calculations increases to $85 (was $75) for each million dollars or part thereof of such additional assumed no par capital, effective January 1, 2018.

Large Corporate Filers 
Effective for the tax year beginning on January 1, 2017, Title 8, Section 503, as amended, includes provisions for large corporate filers. The legislation provides that in each calendar year, the Secretary of State shall compile a list of corporations that: had a class or series of stock listed on a national securities exchange and reported in financial statements: consolidated annual gross revenues equal to or greater than $750 million or consolidated assets equal to or greater than $750 million, consolidated gross revenue of not less than $250 million and consolidated assets of not less than $250 million. These large corporate filers will pay an annual franchise tax of $250,000 instead of $200,000.

Statutory Trusts
Title 12, Chapter 38, section 3813(a)(2) provides for a fee increase maximum of $500 (was $300) for certain filings relating to statutory trusts. These changes will become effective on August 1, 2017.

For additional information, review the full text of House Bill No. 175.

Topics: Delaware Corporate, UCC and Compliance