Delaware, US tax laws

Income Tax on Businesses

A limited liability company is a pass-through tax entity- thus, the earnings you make from your LLC business only go through your personal income taxes.

C-Corporations pay a tax of 8.7% on its federal taxable income allocated and apportioned to Delaware in the state of Delaware. Apart from that, C-Corporation is also subject to 21% Federal Income Tax on income from US sources effectively connected with that business (i.e., effectively connected income or ECI). Certain US-source income (e.g., interest, dividends, and royalties) not effectively connected with a non-US corporation’s business continues is to be taxed on a gross basis at 30%.

Income Tax on Individuals

Profits of an LLC will be taxed in Income Tax Return of Individual Member/s with rates being from 0% to 6.6%.

when a shareholder receives a dividend from their shares in C-Corporation, they are taxed on the amount they receive in their personal return with rates being from 0% to 6.6%.

Currently $ 300 to be paid on June 1 each year

The Delaware Franchise Tax for a corporation is based on your corporation type and the number of authorized shares your company has (Minimum is $ 225 per year)

Gross Receipts Tax

Delaware’s Gross Receipts Tax is a tax on the total gross revenues of a business, regardless of their source. This tax is levied on the seller of goods or services, rather than on the consumer. Gross receipts tax rates currently range from .0945% to .7468%, depending on the business activity. Delaware gross receipts tax is due in instances when the retail customer picks up or takes delivery of the product in Delaware, regardless of the ultimate destination.

Federal Self-employment Tax

This tax is administered by the Federal Insurance Contributions Act (FICA), and covers Social Security, Medicare and other benefits. The current self-employment tax rate is 15.3 percent of net earnings to be taxed in Income Tax Return of Individual Member/s

Any gain from the sale of real estate in Delaware by an individual that lives in a different state is taxed at 6.75 percent. This applies to any gain minus any expenses of selling the real estate.