Who pays, and when
| Entity | What’s due | Deadline |
|---|---|---|
| Delaware corporation | Annual report ($50 filing fee) + franchise tax | 1 March |
| Delaware LLC / LP | Flat annual tax (no annual report): $400 for the 2026 tax year onwards, first due 1 June 2027 — up from $300 under HB 400 | 1 June |
Corporations owing $5,000 or more pay in instalments during the year. The tax applies whether or not the company has revenue or does business in Delaware.
The two calculation methods
Authorized Shares method (the default the notice uses)
- Up to 5,000 authorized shares: $175 minimum.
- 5,001–10,000 shares: $250.
- Each additional 10,000 shares (or part): +$85.
Startups typically authorize around 10 million shares — which under this method produces a bill of about $85,165.
Assumed Par Value Capital (APVC) method
This method uses your gross assets (from your balance sheet / Form 1120 Schedule L) and issued shares:
- Assumed par = total gross assets ÷ total issued shares.
- If assumed par is at least the stated par value, multiply it by authorized shares; otherwise use stated par × authorized shares. This is the assumed par value capital.
- Tax = $400 per $1,000,000 of assumed par value capital (rounded up to the next million above $1M; proportionate below it), with a $400 minimum.
Delaware lets you pay whichever method gives the lower tax — but you must file with the APVC figures to get it.
Worked example
| Input | Value |
|---|---|
| Authorized shares | 10,000,000 |
| Issued shares | 8,000,000 |
| Par value | $0.00001 |
| Gross assets (31 Dec) | $500,000 |
- Authorized Shares method: $250 + (999 × $85) = $85,165
- APVC method: $500,000 ÷ 8,000,000 = $0.0625 assumed par → × 10,000,000 = $625,000 → below $1M, so the $400 minimum applies
- Total due: $400 tax + $50 annual report fee = $450
How to file
- Close your books for the year and get total gross assets.
- Confirm issued and authorized shares from your cap table.
- File the annual report online on the Delaware Division of Corporations site, entering gross assets and issued shares so the APVC calculation applies.
- List directors and an officer, and pay the tax plus the $50 fee before 1 March.
Late filing and penalties
Missing the deadline adds a $200 penalty plus 1.5% interest per month on unpaid tax, and a company that keeps missing filings loses its good standing — which you will need for fundraising, banking and any exit.
What about LLCs?
Delaware LLCs don’t use either method: they pay a flat $400 by 1 June — Delaware raised this from $300 under House Bill 400, effective for the 2026 tax year. Foreign-owned LLCs also have a separate federal filing — see Form 5472.
Setting up a new company? Choose authorized shares and par value with this tax in mind — US company registration.
Frequently asked questions
When is Delaware franchise tax due?
Why is my Delaware franchise tax so high?
What is the minimum Delaware franchise tax?
What is the penalty for filing late?
Please note: this guide is general information based on the rules as they stood on the review date above. Regulations and RBI/CBDT procedures change often — please get advice on your specific facts before acting.