The two methods
- Authorized Shares: $175 up to 5,000 shares, $250 up to 10,000, then $85 for each further 10,000 shares (maximum $200,000). With 10 million authorized shares that’s $85,165.
- Assumed Par Value Capital: assumed par = gross assets ÷ issued shares; each class is valued at the higher of its par and the assumed par; tax is $400 per $1 million (or part) of that capital, minimum $400, maximum $200,000.
- Plus the $50 annual report fee for domestic corporations; due 1 March.
Worked examples and filing steps: Delaware franchise tax guide.
Frequently asked questions
How is Delaware franchise tax calculated?
Delaware allows two methods. The Authorized Shares method charges $175 for up to 5,000 shares, $250 up to 10,000 and $85 per additional 10,000 shares. The Assumed Par Value Capital method uses gross assets and issued shares and charges $400 per $1 million of assumed par value capital, with a $400 minimum. You pay the lower amount, up to $200,000.
Why did I get a huge Delaware franchise tax bill?
Delaware's notice usually uses the Authorized Shares method, which is expensive for startups with millions of authorized shares. Filing the annual report with gross assets and issued shares under the Assumed Par Value Capital method usually brings it close to the $400 minimum.
When is Delaware franchise tax due?
For corporations, the annual report and franchise tax are due by 1 March for the previous year, with a $200 penalty plus 1.5% monthly interest if late.