Delaware Franchise Tax Calculator

Delaware Franchise Tax for LLCs & LPs

Unlike corporations, Delaware LLCs and limited partnerships (LPs) do not calculate franchise tax based on shares or assets. Instead, they pay a flat annual tax of $400, regardless of size or revenue. Even inactive or non-operating LLCs and LPs are still required to pay this tax to remain in good standing with the state. The tax is due by June 1 each year, and failure to pay on time can result in penalties and interest.

Delaware Franchise Tax for Non-Profit Corporations

Most Delaware non-profit corporations are exempt from paying franchise taxes. However, they are still required to file an annual report, which includes basic organizational information and a small filing fee.

Delaware Franchise Tax for Corporations

For Delaware corporations, the amount owed can vary significantly. Unlike LLCs, there is no flat fee structure for most corporations. Instead, corporations can calculate their annual franchise tax using one of two methods: the Authorized Shares Method or the Assumed Par Value Capital Method. Corporations must also file an annual report along with their payment. Franchise tax is due by March 1 each year, and late filings may result in penalties and interest.

The Authorized Shares Method

The Authorized Shares Method calculates Delaware franchise tax based solely on the number of shares a corporation is authorized to issue. This method is usually pretty straightforward, but it can result in higher taxes for companies with a large number of authorized shares. Tax rates increase in tiers as the share count rises, with a minimum tax applying even for corporations with relatively few shares.

The only thing you need to calculate your DE franchise tax via the Authorized Shares Method is your total number of authorized shares.

• 5,000 shares or fewer $175
• 5,001-10,000 shares $250
• Each additional 10,000 shares (or portion thereof) +$85

The Assumed Par Value Capital Method

The Assumed Par Value Capital Method calculates Delaware franchise tax based on a corporation's total gross assets and issued shares, rather than just authorized shares. This method typically results in a lower tax for companies with a high number of authorized shares but relatively low assets.

For this method, you'll need to reference your Gross Assets, Issued Shares, and Authorized Shares to get an accurate prediction. You can calculate your franchise tax using the method below:

1. Calculate your assumed par value per share
   • Assumed Par Value = Gross Assets ÷ Issued Shares
2. Calculate the Assumed Par Value Capital
   • Assumed Par Value Capital = Assumed Par Value x Authorized Shares
3. Calculate the tax
   • For every $1,000,000 of Assumed Par Value Capital, the tax is $400

Choosing the Lower Tax Method

Delaware allows corporations to calculate franchise tax using either the Authorized Shares Method or the Assumed Par Value Capital Method, and you are permitted to choose the method that results in the lower tax. In many cases, companies with a large number of authorized shares benefit from the Assumed Par Value Capital Method, while those with fewer shares may prefer the Authorized Shares Method. The difference in tax can be significant, so it's important to review both Delaware franchise tax amounts.

Filing and Paying Your Delaware Franchise Tax

After calculating your Delaware franchise tax, you must file an annual report (for corporations only) and submit payment which you can do directly with the Delaware Division of Corporations on their website. Corporations are required to file by March 1, while LLCs and LPs must pay by June 1.

Instead of filing through the Delaware Division of Corporations, you can also pay your franchise tax through our website. As your registered agent, Harvard Business Services, Inc. will aid in the filing process and answer any questions as they come up. You can pay your Delaware franchise tax online by clicking the button below, or you can contact our team over the phone, via email, or via Live Chat.