Incorporated in Delaware? Your Annual Bill Just Jumped — Here's the New Cost

If your LLC or corporation is registered in Delaware — and roughly two-thirds of Fortune 500 companies plus hundreds of thousands of small businesses are — your next annual bill from the state is going to be bigger. Delaware House Bill 400, signed into law on May 21, 2026, raised annual taxes and a long list of filing fees, with most of the increases taking effect August 1, 2026.

For a state that built its reputation as the easiest, most predictable place in America to form a business, this is a real shift. Here's what actually changed, and what it costs you.

The Headline Number: Your LLC Annual Tax Just Went Up 33%

Delaware LLCs, limited partnerships, and general partnerships pay a flat annual tax regardless of income or size. Under HB 400, that tax rises from $300 to $400 per year — a 33% increase. If you also have a Series LLC, each registered series now owes its own separate annual tax on top of what the parent entity pays.

The increase technically applies to the 2026 tax year, but because Delaware's LLC annual tax is paid a year in arrears, most business owners won't feel it in their wallet until the payment due June 1, 2027. The tax due by June 1, 2026 — covering the 2025 tax year — stayed at the old $300 rate. If you're budgeting for next year, build in the higher number now.

Filing and Expedited Service Fees Rose Sharply Too

The bigger shock for many business owners is in the fine print: fees for certified copies, service of process, trademark filings, UCC filings, and — especially — expedited processing all went up starting August 1, 2026. If you've ever paid extra to rush a filing before a closing, a financing deadline, or a licensing requirement, the new ceiling on what the state (and your registered agent) can charge is dramatically higher:

• 24-hour expedited service: maximum rose from $100 to as much as $300
• Same-day service: maximum rose from $200 to as much as $500
• 2-hour service: maximum rose from $500 to as much as $1,500
• 1-hour service: maximum rose from $1,000 to as much as $2,500

These are authorized ceilings rather than guaranteed new prices — your registered agent may not charge the maximum — but businesses that regularly rely on fast turnaround for closings, acquisitions, or urgent compliance work should expect to pay more, potentially a lot more, going forward.

Why Delaware Did This

The state projects HB 400 will add roughly $152 million a year to its General Fund. Delaware collects a substantial share of its state revenue from business entity fees and franchise taxes, thanks to the huge number of companies incorporated there, and lawmakers who introduced the bill framed it as modernizing a fee structure that in some cases hadn't changed in years.

The reaction wasn't universally warm. Legislative critics, including State House Republican Leader Tim Dukes, questioned raising costs on corporations at a moment when Delaware's dominance as the default incorporation state is facing real competition. More than 60 public companies with a combined market capitalization exceeding $3 trillion have redomiciled out of Delaware over the past two years, with names like FirstCash Holdings and GPGI Inc. among those citing the move publicly. Whether a higher annual tax accelerates that trend for smaller private companies remains to be seen — but it's part of the backdrop against which HB 400 passed.

What This Means If You're Deciding Where to Form Your Business

For most small business owners already incorporated in Delaware, the honest answer is: not much changes operationally. A $100 annual increase and higher rush-filing fees are real costs, but they're unlikely to outweigh the benefits many businesses formed in Delaware for in the first place — a well-established body of corporate law, a specialized Court of Chancery, and investor familiarity if you're planning to raise outside capital.

If you're just starting the process of forming a business, though, this is a good moment to actually compare states rather than defaulting to Delaware out of habit. Delaware still makes sense for companies planning to raise venture capital or eventually go public. But if you're a local service business, a single-member LLC, or a company with no near-term plans to raise outside investment, forming in your home state often means one less annual filing, one less registered agent fee, and no franchise tax exposure in a state where you don't actually operate.

Our LLC formation guide walks through how to weigh state of formation against where you actually do business. If you're also deciding between an LLC and a corporate structure for tax purposes, the LLC vs. S corp guide covers how that decision interacts with where you incorporate.

What to Do Before Your Next Delaware Filing

A few practical steps for business owners with an existing Delaware entity:

• Confirm with your registered agent what their updated fee schedule looks like — many agents pass through the state's new maximums at different rates
• Budget for the $400 annual tax (plus $75 per registered series, if applicable) when the payment comes due by June 1, 2027
• Avoid last-minute expedited filings where possible; the cost difference between standard and rush processing just got much larger
• If you're forming a new entity and don't have a specific reason to choose Delaware, get your EIN and evaluate formation costs in your home state before defaulting to Delaware

Delaware isn't becoming an expensive place to incorporate in absolute terms — a few hundred dollars a year is still modest next to what most businesses spend on licensing, insurance, or banking. But after decades of being the default, low-friction choice, business owners now have one more reason to ask whether Delaware is actually the right fit, rather than just the familiar one.

Photo by Nastuh Abootalebi on Unsplash