-Delaware is the strongest state in the union to open a C Corporation. This is partly due to being the only state in the union that has a Court of Chancery. Meaning business cases are based on case laws rather than a jury of citizens.
The state of Delaware does have an individual income tax. Like most states with income tax, it is calculated on a marginal scale whose range is from 2.2% to 6.6% for 2020.
Additionally, the city of Wilmington, DE has an additional local income tax rate of 1.25% of income.
The state of Delaware has a flat Corporate Tax rate of 8.7%. In addition to the Corporate Tax, the state of Delaware also imposes a Gross Receipts tax called Manufacturers’ and Merchants’ License Tax. This tax is broken down into two parts – a fee and a tax. The total cost ranges from.095% to 1.99% of Gross Receipts.
Delaware is one of a few states that has a Capital Stock Tax. The tax rate is .04% upto a maximum payment of $200,000.
The average property tax rate for residential property in the state of Delaware is 0.58%, making it a very preferable place to own property.
Unemployment taxes usually consist of three factors. They are the wage base, range of rates, number of schedules. Below is an outline of the three:
Delaware is one of the strongest states in the union to open a Corporation. This is due many factors, most predominantly because it has a Court of Chancery. This allows business disputes to be based on case law and not a jury. The Chancery Court in Delaware spells out what business can and can’t do, regarding modern business laws. Many high profile companies have had their cases heard in the Court of Chancery (e.g. Disney, Microsoft, Yahoo, etc.)
This brings us to the Franchise Tax. Since Delaware is so preferable for Corporate entities, the state has decided to impose an annual business license fee (called the Franchise Tax) that is based on the authorized shares of the Corporate entity.
Here are some important factors.