Delaware Franchise Tax Calculator

Why the notice is so high

Every Delaware corporation pays an annual franchise tax with its annual report, due March 1. Delaware allows two ways to compute it and says to "use the method that results in the lesser tax", but the notice it sends is usually based on the first one, the Authorized Shares method, which only looks at how many shares your charter authorizes. A typical startup authorizes 10,000,000 shares, which under that method is $85,165. Founders who pay the notice as printed overpay by tens of thousands of dollars.

The second way, the Assumed Par Value Capital method, uses your gross assets and issued shares. For the same startup with 9,000,000 shares issued and $500,000 of assets it comes to the $400 minimum. To use it, you file the annual report yourself (or through your incorporation service) and enter your issued shares and total gross assets.

The two methods, step by step

• Authorized Shares: $175 for 5,000 shares or fewer, $250 for 5,001 to 10,000, then $85 for each additional 10,000 shares or part of 10,000. 100,000 shares costs $1,015; 10,000,000 costs $85,165.
• Assumed Par Value Capital: divide total gross assets (the "total assets" line on Form 1120, Schedule L) by total issued shares, to six decimals: that is the assumed par. Multiply it by the authorized shares of every class whose par value is below it; add the authorized shares of any class with a higher par times that par. The result is the assumed par value capital. The tax is $400 per million or part of a million, prorated below $1,000,000, with a $400 minimum.
• Both methods are capped at $200,000 a year. Large corporate filers pay more and are not covered here.

As assets grow, so does the tax: the same share structure with $3,000,000 of assets after a seed round owes $1,600, and with $12,000,000 after a Series A, $5,600. From $5,000 a year Delaware wants estimated payments: 40% by June 1, 20% by September 1, 20% by December 1 and the rest by March 1.

Deadlines and penalties

The annual report and the tax are due March 1 for the previous year; the report filing fee is $50. Missing it costs a $200 penalty plus 1.5% interest a month, and a corporation that fails to pay or file for a full year has its charter declared void (8 Del. C. § 510). The tax is not prorated for a part year: a company incorporated in late December owes the full year.

Rules and rates from the Delaware Division of Corporations (How to Calculate Franchise Taxes), read on October 12, 2026. The calculator reproduces Delaware's own worked examples. It is an estimate, not tax advice: check the figures you file against your tax return.

Frequently asked questions

Why is my Delaware franchise tax $85,165?

Because the notice uses the Authorized Shares method on 10,000,000 authorized shares. If you file with the Assumed Par Value Capital method and report your issued shares and gross assets, a startup with modest assets usually owes the $400 minimum.

Do I have to pay Delaware franchise tax if I have no revenue?

Yes. The tax is owed by every Delaware corporation for every year it exists, whatever its revenue or profit; the minimum is $175 (Authorized Shares) or $400 (Assumed Par Value Capital), plus the $50 report fee.

When is Delaware franchise tax due?

March 1, together with the annual report. If you owe $5,000 or more, estimated payments are due June 1, September 1 and December 1 of the tax year, with the balance on March 1.

What counts as gross assets?

The "total assets" figure from Schedule L of your federal Form 1120 for the fiscal year ending in the report year. Cash raised from investors sits in it, which is why the tax rises after a funding round.

Franchise tax is a small but certain line in your yearly costs. To see it next to payroll, tools and runway, model it in Adlega.