Delaware nonprofit annual report: exempt corporations
Which Delaware corporations are exempt from franchise tax, what they still file each March 1, and why a startup calculator is the wrong tool.
Summary
Our answer: a Delaware nonprofit corporation that is an exempt corporation under 8 Del. C. 501(b), for example one exempt under section 501(c) of the Internal Revenue Code or organized not for profit with no earnings going to members, pays no franchise tax. It still files an annual report by March 1, like every Delaware corporation (502(a)), and pays the $25 fee for exempt domestic corporations. Do it yourself on the state portal: there is no tax to compute and no reason to buy a calculator, ours included.
Exempt Delaware corporations (8 Del. C. 501(b)): no franchise tax, annual report by March 1, $25 fee.
| Franchise tax | None for an exempt corporation8 Del. C. 501(a). |
|---|---|
| Annual report | Still due by March 18 Del. C. 502(a) applies to every corporation. |
| Fee | $25Exempt domestic corporations ($50 for non-exempt). |
| Who is exempt | 501(c) organizations, not-for-profit corporations with no private benefit, religious or charitable corporations and others listed8 Del. C. 501(b)(1)-(6). |
| Penalties | The Secretary may remit themFor corporations not required to pay the tax (505(c)). |
Our verdict
If your corporation is exempt under Section 501(b), file the annual report yourself on the state portal by March 1 and pay $25. Do not pay anyone to calculate a franchise tax that is zero.
Who this page is for, and who it is not for
For: officers of Delaware nonprofit, charitable, religious or civic corporations. Not for: startups and other for-profit corporations (they pay the franchise tax), and nonprofits organized as LLCs.
Exempt corporations versus startups
The same March 1 report covers both, with different amounts.
| Item | Exempt corporation (501(b)) | Taxable stock corporation |
|---|---|---|
| Franchise tax | None | Lower of two methods; $175 or $400 minimum for a full year |
| Annual report fee | $25 | $50 |
| Due | March 1 | March 1 |
| Penalty remission by the Secretary | Possible (505(c)) | Only via a 505 petition if erroneously fixed |
Next steps
Common questions
Does a Delaware nonprofit pay franchise tax?
Not if it is an exempt corporation under 8 Del. C. 501(b): for example, a corporation exempt under section 501(c) of the Internal Revenue Code, or one organized not for profit where no part of the net earnings benefits a member or individual.
Does an exempt corporation still file an annual report?
Yes. Section 502(a) requires every corporation to make an annual franchise tax report by March 1. The Division of Corporations lists a $25 annual report fee for exempt domestic corporations.
What if the nonprofit files late?
The late-report penalty applies to any corporation that fails to file by March 1, but for corporations not required to pay the tax, Section 505(c) lets the Secretary of State remit all or part of the penalties and interest. Ask the Division directly.
Not exempt? Compare the two methods
Our calculator is for taxable stock corporations with par-value shares. Exempt corporations do not need it.
Open checkerRelated guides
Delaware annual report checklist for a small corporation
A source-backed checklist for founders preparing a Delaware domestic corporation annual report before using the official state portal.
Delaware foreign corporation annual report hard stop
A scope boundary page separating Delaware domestic stock corporation franchise tax from Delaware foreign corporation annual report filing.
Delaware franchise tax minimum and annual report fee
The minimum tax and filing fee numbers founders should separate before comparing methods.
Official sources for this guide
Last reviewed: .