Delaware franchise tax for a corporation is the lower of two calculations: the authorized shares method and the assumed par value capital method. For most startups the second is far lower, often the $400 minimum. The tax and annual report for 2026 are due March 1, 2027. Enter your numbers to see both.
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Delaware franchise tax calculator
Estimate the franchise tax your Delaware corporation owes for 2026 under both methods, and see the lower amount Delaware lets you pay.
For the 2026 tax year, due in 2027. Assumes one par value for all shares and no change to your shares during the year; otherwise use the Delaware Division of Corporations calculator. Results are estimates for general information only, not legal, tax or financial advice. Confirm them with your own CPA, tax adviser or attorney before making decisions. Using this tool does not create a client relationship with Catching Numbers Inc.
How is Delaware franchise tax calculated?
Delaware gives every corporation two ways to work out the tax, and you pay whichever is lower. The rules below come from the Delaware Division of Corporations.
How does the authorized shares method work?
| Authorized shares | Franchise tax |
|---|---|
| 5,000 or fewer | $175 (the minimum) |
| 5,001 to 10,000 | $250 |
| More than 10,000 | $250, plus $85 for each additional 10,000 shares or part of 10,000 |
This method only looks at the shares your certificate of incorporation allows, not at what the company is worth. A startup with 10,000,000 authorized shares gets a result of $85,165, which is why the first notice often looks alarming.
How does the assumed par value capital method work?
- Find the assumed par value. Divide total gross assets by total issued shares, to six decimal places.
- Find the assumed par value capital. Multiply the assumed par value by your authorized shares. If your stated par value is higher than the assumed par value, use the stated par value.
- Apply the rate. The tax is $400 for each $1,000,000 of assumed par value capital, rounded up to the next million once you are over $1,000,000. Under $1,000,000, it is the capital divided by $1,000,000, times $400.
- Apply the minimum. The minimum under this method is $400. The maximum is $200,000.
Example. A startup has 10,000,000 authorized shares at $0.00001 par, 8,000,000 issued shares and $500,000 in total gross assets. Assumed par value is $500,000 ÷ 8,000,000 = $0.0625. Assumed par value capital is $0.0625 × 10,000,000 = $625,000. The tax works out to $250, so the $400 minimum applies. Add the $50 annual report fee and the company pays $450, not $85,165.
When is Delaware franchise tax due, and what if you are late?
- March 1, 2027 for the 2026 annual report and franchise tax. Annual reports must be filed online.
- $50 filing fee for the annual report of a non-exempt domestic corporation, on top of the tax.
- $200 penalty plus 1.5% interest a month if you file or pay late.
- Estimated payments if you owe $5,000 or more: 40% by June 1, 20% by September 1, 20% by December 1 and the rest by March 1.
What do Delaware LLCs pay?
LLCs, limited partnerships and general partnerships do not use either method. They pay a flat annual tax, due June 1, and file no annual report. House Bill 400, signed in May 2026, raised it from $300 to $400 starting with the 2026 tax year, so the first $400 payment is due June 1, 2027.
How should you record franchise tax in your books?
Franchise tax for 2026 is a 2026 expense even though you pay it in 2027. On accrual-basis books, record it as an accrued liability at December 31 and clear it when you pay in March. Keep it in its own account, separate from income tax, so your tax CPA and investors can see it. Total gross assets for the calculation should match total assets on your year-end balance sheet, which is one more reason to finish the December close before March 1.
Frequently asked questions
Why is my Delaware franchise tax bill so high?
Most likely it was calculated with the authorized shares method, which charges by the number of shares you are allowed to issue. Startups with millions of authorized shares usually owe far less under the assumed par value capital method, which uses your issued shares and total gross assets.
Do I owe Delaware franchise tax if the company had no revenue?
Yes. Franchise tax is owed for the right to exist as a Delaware corporation, whether or not the company did business or made money. The minimum is $175 under the authorized shares method and $400 under the assumed par value capital method, plus the $50 annual report fee.
What counts as total gross assets?
Delaware uses the total assets reported on Form 1120, Schedule L, for the same year. If you have not filed that return yet, use the total assets on your year-end balance sheet.
Is franchise tax the same as Delaware income tax?
No. Franchise tax is an annual charge on Delaware corporations based on shares or assets. Delaware corporate income tax is separate and depends on doing business in Delaware.
Can you file our Delaware annual report and franchise tax?
Yes. We file Delaware annual reports and franchise tax for clients and record the accrual in the books. We don’t prepare income tax returns; your tax CPA handles those.
Our accounting for startups covers the year-end close behind these numbers, and our cash runway calculator shows how long your cash lasts.
Want your Delaware filing handled?
Book a free consultation. We’ll confirm the lower method from your books and file the annual report and franchise tax for you.