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Delaware Tax and Fee Increases for Business Entities

Corporate Services Update Kathryn M. Buono

A new Delaware law will increase taxes and fees assessed by the Delaware Secretary of State on business entities. Most of the increases will become effective on August 1, 2009; however, certain of the franchise tax increases are effective retroactively for the tax year beginning January 1, 2009. Specifically, the maximum franchise tax for domestic business corporations will increase from $165,000 to $180,000. The assumed par value multiplier that is used to calculate the corporate franchise tax will also increase from $250 to $350 per $1 million of assumed par capital. Taking effect in the tax year beginning January 1, 2010 are increases in the minimum franchise tax that apply under the assumed par value test and the late penalty for untimely filing of an annual franchise tax report.

Some of the additional fee and tax changes, all of which will become effective on August 1, 2009, are summarized below.

Expedited Service Fee Increases:

  • Thirty minutes. A new expedited service fee for business entities of "up to $7,500" for certain services that are requested to be completed within 30 minutes.
  • Same day. Same-day expedited service fee increases from "up to $200" to "up to $300."
  • Twenty-four hours. Twenty-four hour expedited service increases from "up to $100" to "up to $150."

Good Standing Certificate Fee Increases:

  • Short form. Short form good standings will increase from $30 to $50.
  • Long form. Long form good standings will increase from $125 to $175.

UCC Filing Fee Increases:

  • UCC Filings. Increase in UCC document filing fee amount to "not to exceed $100" (from $75), plus $2.00 per page in excess of four pages (submitted in writing or as an image).
  • UCC Expedited Fee.
    • From "up to $50" to "up to $100" for 24-hour service.
    • From "up to $100" to "up to $200" for same-day service.
    • From "up to $200" to "up to $500" for two-hour service.
  • New UCC Expedited Service. New one-hour service for "up to $1,000."

Other fee increases are as follows:

  • Increase in certified copy fees, from $30 to $50 per document.
  • Increase in foreign corporation annual report fee, from $100 to $125, and increase in the penalty for failure to file, from $100 to $125.
  • Increase in the penalty for failure to pay partnership and domestic and foreign limited partnership annual tax, from $100 to $200.
  • Increase in the penalty for a domestic or foreign limited liability company's failure to pay its annual tax, from $100 to $200.

This update is intended as a general summary of legal matters and not as specific advice to any particular client. If you have questions concerning the subject matter of this update, please contact Kathie Buono at (414) 277-5109 / kathie.buono@quarles.com or your Quarles and Brady attorney.