If your LLC is registered in Delaware but you've never set foot in the state, you're about to feel it anyway. Delaware's flat $300 annual tax on LLCs, limited partnerships, and general partnerships — a fee that hadn't moved in years and applies whether or not you owe a dollar of state income tax — just jumped to $400. And unlike most fee changes, this one isn't waiting for a clean new fiscal year to kick in: it's retroactive to January 1, 2026, meaning every entity that exists this year owes the higher amount when the bill comes due.
If you formed an LLC in Delaware for the strong case law, the fast courts, or simply because "that's what startups do," this is the fee schedule you're now working with.
What HB 400 Actually Changed
Delaware House Bill 400 was signed into law on May 21, 2026, and it touches fees across five different titles of Delaware code — pretty much everything the Secretary of State's office administers. Most of the changes (formation fees, certified document fees, expedited processing charges) take effect August 1, 2026. But the two changes that hit the widest number of businesses arrived earlier and apply retroactively to the whole 2026 tax year:
- LLC, LP, and GP annual tax: $300 → $400
- Annual tax on registered series of LLCs and limited partnerships: $75 → $100 per series
Because the increase is retroactive to January 1, 2026, it applies to every existing Delaware LLC and partnership, not just entities formed after the bill passed. You'll see the new $400 figure when you pay your 2026 annual tax in 2027 (Delaware LLC and partnership annual taxes are paid a year in arrears, due by June 1 of the following year).
For context on scale: Delaware has more than 1.5 million registered LLCs. A $100 bump per entity, times that population, is why the state's own estimate puts the combined revenue from HB 400's various fee increases at roughly $150 million a year — money the bill's sponsors say is earmarked for education, transportation, healthcare, and small-business support programs, partly to offset anticipated federal funding cuts.
Why This Bill Moved So Fast
The original proposal from the Delaware Secretary of State's office was more modest: raise the LLC tax from $300 to $350. House Majority Leader Kerri Harris's version pushed it further, to $400, and it passed with the supermajority (three-fifths in each chamber) that Delaware's constitution requires for tax increases.
The debate inside the statehouse is worth knowing about if you're weighing whether to keep your entity in Delaware. Republican critics warned that a bigger-than-recommended increase hands ammunition to competing states — Nevada and Wyoming in particular — that have spent years marketing themselves as lower-cost alternatives for LLC formation, a pitch sometimes nicknamed "DExit." Supporters countered that Delaware's real competitive advantage was never the fee schedule — it's the depth of corporate case law and the specialized Court of Chancery that gives founders, investors, and litigators predictability that a cheaper filing fee elsewhere doesn't replicate.
That argument matters if you're actually comparing states. A $100 annual tax increase is real money at scale, but it's small relative to the legal and administrative certainty Delaware entities are usually formed for in the first place. If you're weighing Delaware against Wyoming or Nevada for a new entity, run the full cost comparison — formation fees, annual taxes, registered agent costs, and privacy rules — rather than reacting to a single line item.
Who Actually Feels This
- Existing Delaware LLC and LP owners, even if you operate entirely outside Delaware and have no Delaware-source income. The annual tax is a flat franchise-style fee, not an income tax — it's owed regardless of revenue or profitability.
- Series LLC and series LP structures, where each registered series now carries its own $100 annual tax (up from $75), on top of the parent entity's $400.
- Registered agents and formation services, who typically bill this tax through to clients as part of an annual compliance package — expect your renewal invoice to reflect the new number starting with the 2026 tax year billing cycle.
- Founders currently deciding where to incorporate. This doesn't change the analysis dramatically, but it's one more data point worth folding into a state-of-incorporation decision, especially for entities that don't need Delaware's litigation infrastructure.
If you're not sure whether your entity type is subject to the annual tax at all — Delaware corporations pay franchise tax under a different, more complex formula, not the flat LLC/LP tax — check your entity type against Delaware's Division of Corporations fee schedule directly, since HB 400 adjusted several fee categories differently.
What To Do Before Your Next Renewal
- Update your budget line for Delaware compliance costs. If you've been forecasting $300 (or $300 plus a registered agent markup), rebuild that number around $400, and $100 per registered series if applicable.
- Confirm your registered agent has the new figure. Most registered agent services collect the annual tax as part of a bundled renewal invoice. Ask them directly whether their upcoming invoice reflects the retroactive January 1, 2026 effective date — some services were still quoting $300 in early client communications before the bill's final passage.
- Don't let the fee change trigger a rushed re-domestication decision. Moving an LLC's state of formation has its own costs and legal complexity, and $100 a year rarely outweighs the reason you chose Delaware to begin with. Treat this as a line-item update, not a strategic emergency.
- Recalculate multi-entity structures. If you run a holding company with several Delaware subsidiaries — a common structure for real estate investors and multi-brand operators — the increase compounds per entity. Five LLCs just went from $1,500 to $2,000 a year in combined annual tax.
Keep Your Compliance Costs Visible, Not Buried
A $100-per-entity fee increase is easy to miss until a registered agent invoice arrives, especially if you're running multiple Delaware entities or a series LLC structure. Recording each entity's annual tax as its own tracked expense — rather than lumping it into a generic "fees" category — makes it obvious when a state changes the rules and lets you catch the new number before it surprises you. Beancount.io provides plain-text accounting that keeps every recurring compliance cost, across every entity, transparent and easy to audit in one place. Get started for free and see why founders managing multi-entity structures are switching to plain-text accounting.