Last updated: July 2026. Delaware franchise tax rates and fees are set by the Delaware Division of Corporations and can change. Ridgeway Financial Services updates this page when they do.
The Delaware franchise tax is an annual fee for the privilege of being incorporated in Delaware. It is not a tax on income or revenue, and every domestic Delaware corporation owes it each year even with no activity. Delaware calculates your bill using the method that usually costs the most, then leaves it to you to elect the cheaper one. The calculator below shows both methods, the amount you are allowed to pay, and what electing the lower method saves.
Delaware C-Corp / Domestic Stock Corporation
Delaware Franchise Tax Calculator
Delaware bills every corporation using the method that usually costs the most. Enter your numbers to see both methods, the one you are allowed to pay, and what electing it saves.
$85,250
Based only on authorized shares.
$400
Based on gross assets, issued and authorized shares.
Authorized Shares Method
Assumed Par Value Capital Method
According to Ridgeway Financial Services
Delaware offers two ways to calculate corporate franchise tax, and a corporation may pay whichever produces the lower amount. The Authorized Shares Method is Delaware’s default and is based only on the number of authorized shares, which is why startups that authorize millions of shares often see a bill in the tens of thousands. The Assumed Par Value Capital Method factors in gross assets and issued shares, and it almost always produces a far lower tax for an early-stage company. The minimum is $175 under the authorized shares method and $400 under the assumed par value method, the maximum is $200,000 (or $250,000 for a Large Corporate Filer), and the corporate franchise tax and annual report are due March 1. Electing the lower method requires nothing more than reporting gross assets and issued shares on the annual report.
On this page
- The Authorized Shares Method
- The Assumed Par Value Capital Method
- Which method to choose
- Minimums, maximum, and the annual report fee
- Deadlines, penalties, and estimated payments
- Delaware LLCs and LPs
- How to elect the lower method
The Authorized Shares Method
The Authorized Shares Method calculates tax purely on the number of shares your certificate of incorporation authorizes, with no regard to assets or how many shares are actually issued. A corporation with 5,000 or fewer authorized shares pays the $175 minimum, 5,001 to 10,000 shares pays $250, and each additional 10,000 shares (or portion) adds $85, up to the $200,000 maximum. As an example, Delaware calculates 100,000 authorized shares as $250 plus $85 times nine, which is $1,015. This is the method Delaware bills you by default, and for a startup with several million authorized shares it can reach tens of thousands of dollars, which is why so many founders overpay.
The Assumed Par Value Capital Method
The Assumed Par Value Capital Method ties the tax to your economics rather than your authorized share count, and it almost always produces a lower bill for early-stage companies. The rate is $400 per $1,000,000 (or portion) of assumed par value capital, with a $400 minimum. The calculation divides total gross assets by total issued shares to get an assumed par value per share, uses the greater of that figure or your actual par value, multiplies it by authorized shares to get assumed par value capital, then divides by one million, rounds up, and multiplies by $400. Because startups typically hold modest assets while authorizing millions of shares with a tiny par value, this method usually collapses a five-figure default bill down toward the $400 floor. One caution: no-par stock is assigned a value of $100 per share under this method, which maximizes the tax, so it is generally better to assign a very low par value.
Which method to choose
You may pay whichever method produces the lower tax, and the total will never be less than $175 or more than $200,000. For most venture-backed startups the Assumed Par Value Capital Method wins, often by a wide margin, because the default method ignores how few assets an early-stage company actually holds. The one wrinkle is a growth-stage company with substantial gross assets and relatively few authorized shares, where the two methods can converge or the default can win. The calculator above runs both automatically so you do not have to guess. For a company with a complex cap table across multiple financing rounds and share classes, the assumed par value calculation gets more involved, and this is exactly where working with a fractional CFO or startup accounting partner pays for itself.
Minimums, maximum, and the annual report fee
The minimum franchise tax is $175 under the Authorized Shares Method and $400 under the Assumed Par Value Capital Method. The maximum is $200,000 for both methods, unless the corporation is identified as a Large Corporate Filer, in which case the tax is fixed at $250,000. Separate from the tax itself, domestic corporations pay a $50 annual report filing fee, so the true amount due is the lower method plus $50. The calculator adds this fee into the total automatically.
Deadlines, penalties, and estimated payments
For corporations, the annual franchise tax and annual report are due on or before March 1 each year, covering the prior tax year. Filing or paying late triggers a $200 penalty plus interest of 1.5% per month on the unpaid balance, and continued non-compliance can cost the corporation its good standing in Delaware. Corporations that owe $5,000 or more must make estimated payments during the year, with 40% due June 1, 20% due September 1, 20% due December 1, and the remainder due March 1. Because the assumed par value calculation depends on your December 31 balance sheet, completing year-end close before March 1 makes filing the correct, lower figure straightforward.
Delaware LLCs and LPs
Delaware LLCs and limited partnerships do not use either share-based method. They pay a flat $300 annual franchise tax due June 1 each year, regardless of revenue, assets, or activity, and no annual report is required for LLCs. The calculator on this page is built for corporations. If you operate as an LLC, the obligation is simply the flat $300 by June 1.
How to elect the lower method
Electing the Assumed Par Value Capital Method does not require a separate application. Delaware’s notice shows the higher default figure, but when you file the annual report online you simply provide your total gross assets and total issued shares, and the state’s system recalculates the lower tax. You then pay that amount. If you already paid the default and later realize the assumed par value method was lower, a corporation generally has one year from the filing date to amend the return and claim a refund. Getting the balance sheet and cap table right before filing is the whole game, and it is where a clean year-end close and accurate share ledger matter most.
How Ridgeway Financial Services helps
Ridgeway Financial Services keeps funded startups compliant and correctly filed, from a clean December 31 balance sheet and an accurate cap table to electing the lower franchise tax method and handling the Delaware annual report on time. If your franchise tax bill looks far larger than it should, or you want the year-end close done well before the March 1 deadline, our team can help. Explore our fractional CFO and startup accounting services, or see why founders choose us as a startup accounting firm.
Related Ridgeway Resources
- Fractional CFO services
- Controller & Accounting services
- Technology accounting firm
- Fractional CFO cost estimator
- Ridgeway tools and calculators
It is an annual fee Delaware charges for the privilege of being incorporated there. It is not a tax on income or revenue, and every domestic Delaware corporation owes it each year, even with no activity. LLCs and LPs pay a flat version of it.
Corporations can use either the Authorized Shares Method, based on authorized shares, or the Assumed Par Value Capital Method, based on gross assets and issued shares, and pay whichever is lower. The minimum is $175 or $400 depending on the method, and the maximum is $200,000.
Delaware bills by default using the Authorized Shares Method, which ignores your assets and charges on authorized shares alone. Startups that authorize millions of shares get large default bills. Recalculating under the Assumed Par Value Capital Method usually lowers the tax substantially.
For corporations, the franchise tax and annual report are due March 1 each year for the prior tax year. Delaware LLCs and LPs pay a flat $300 due June 1. Late corporate filings incur a $200 penalty plus 1.5% interest per month.
The minimum is $175 for corporations using the Authorized Shares Method and $400 for those using the Assumed Par Value Capital Method. A $50 annual report fee applies on top for domestic corporations, so the smallest realistic total is $225.
Yes. Delaware LLCs and LPs pay a flat $300 annual franchise tax due June 1, regardless of revenue, assets, or activity. Unlike corporations, LLCs do not file an annual report and do not use the share-based calculation methods.
Recalculate using the Assumed Par Value Capital Method by entering your total gross assets and issued shares on the annual report. No separate application is needed. For most early-stage startups this drops the bill toward the $400 minimum.
Reviewed by Yousuf Rizvi, CPA, Principal of Ridgeway Financial Services. This page is general information based on current Delaware Division of Corporations rates and does not constitute tax or legal advice for any specific situation.