Does Delaware have corporate income tax?

Yes, Delaware does have a corporate tax on income. Up to 2025, the state levies a flat rate of 8.7% corporate income tax on income from business activities conducted within Delaware. But if a business is incorporated in Delaware but conducts business entirely outside the state, it is usually not subject to this tax. This disparity makes Delaware popular with companies that want to capitalize on its corporate law and tax-friendly environment without being physically located in the state.

In addition to the corporate income tax, Delaware also imposes most corporations an annual franchise tax. This is not based on income but on the number of authorized shares or the value of the company's assets, depending on the choice made.

Delaware's combination of liberal business statutes, a highly respected Court of Chancery, and low tax charges on foreign business activity makes it very attractive for entrepreneurs, start-ups, and multinationals alike. Firms should nevertheless consult legal or tax advisers to determine how Delaware tax laws specifically impact their individual situations.

For tailored guidance in integrating and handling tax matters in Delaware, professional counsel is required. Familiarity with local requirements prevents companies from paying penalties and optimizing their organization. For professional assistance, contact One IBC USA today.