Delaware franchise tax calculator: how to work out your bill

A Delaware corporation pays the lower of two figures: one worked out under the Authorized Shares method, the other under the Assumed Par Value Capital method. It also pays a $50 annual report fee, and both are due by 1 March. A Delaware LLC uses a different system entirely and pays a flat annual tax.

That is the whole answer. The trouble is that many owners only learn it after opening a notice for tens of thousands of dollars, sent to a company with a few hundred thousand in the bank.

Searching for a Delaware franchise tax calculator usually leads to forms that return a number without explaining it. This guide works through the maths so you can check the figure yourself and see why the two methods produce such different results. If you are still choosing a structure, read our comparison of LLC or C-corp as a non-resident first, because that decision fixes which of these bills you will pay.

How Delaware franchise tax is calculated: the short answer

Delaware's Division of Corporations publishes both methods on its franchise tax calculation page. You run each one and pay whichever result is lower. You do not have to pick a method in advance: Delaware's instruction is simply to use the method that results in the lesser tax.

The Authorized Shares method looks only at how many shares your certificate of incorporation allows you to issue. The Assumed Par Value Capital method looks at your gross assets, your issued shares and your par value. For a typical venture-style startup with millions of cheap shares and modest assets, the second method nearly always wins.

The headline numbers are:

• Corporations: lower of the two methods, plus a $50 annual report fee, due 1 March

• LLCs: flat $400 a year, due 1 June, with no annual report

• Ceiling: $200,000 for most corporations, or $250,000 for large corporate filers

Method 1: the Authorized Shares method

This method is set out in Title 8, s.503(a)(1) of the Delaware Code. The bands are simple:

• 5,000 shares or fewer: $175

• 5,001 to 10,000 shares: $250

• Each further 10,000 shares, or part of 10,000: add $85

Delaware's own examples show how it works. A corporation with 10,005 authorised shares pays $335: $250 for the first 10,000, plus $85 for the extra five shares, which count as a part-block. A corporation with 100,000 authorised shares pays $1,015. If your stock has no par value, this method always gives you the lower bill.

The reason the first bill shocks people is that Delaware's annual notice is worked out using this method by default. Take a startup with 10,000,000 authorised shares, a common setup once an option pool is in place (our guide to how authorised shares and option pools fit into a cap table explains why). The notice shows $250 + (999 x $85) = $85,165. Recalculating with the Assumed Par Value Capital method usually brings this down sharply for companies with many cheap shares and modest assets.

Method 2: the Assumed Par Value Capital method

This is where any calculator for Delaware franchise tax earns its keep, but the steps are manageable by hand:

1. Divide your total gross assets by your total issued shares, including treasury shares. Work to six decimal places. The result is your assumed par.

2. For authorised shares whose par is below the assumed par, multiply the number of shares by the assumed par.

3. For authorised shares whose par is above the assumed par, multiply the number of shares by their own par value.

4. Add steps 2 and 3. That total is your assumed par value capital.

5. The tax is $400 per $1,000,000 or part of $1,000,000. Above $1m, round up to the next million. Below $1m, divide the capital by 1,000,000 and multiply by 400.

6. The minimum under this method is $400.

Here is a worked example using our own figures. You have 10,000,000 authorised shares at $0.00001 par, 8,000,000 issued, and gross assets of $250,000. Assumed par is $250,000 / 8,000,000 = $0.031250. Because your par is below that, capital is 10,000,000 x $0.03125 = $312,500. Then $312,500 / 1,000,000 x $400 = $125, so the $400 minimum applies. Your bill is $400 tax plus the $50 report fee, $450 in total, against $85,165 on the notice.

Delaware's own example uses mixed par values. The company has 485,000 issued shares, $1m of gross assets, 1,000,000 common shares at $1 par and 250,000 preferred at $5 par. Assumed par is $2.061856. The common shares are below that, giving $2,061,856; the preferred shares are above it, giving $1,250,000. Total capital is $3,311,856, which rounds up to four units of $400: $1,600.

You cannot use this method if you have nothing to divide. If your gross assets or issued shares are zero, the Division says you should call Franchise Tax on (302) 739-3073, option 3, rather than estimate.

Minimum tax, maximum tax, the annual report fee and the 1 March deadline

Under Title 8 ss.502, 503 and 504, the minimum tax is $175 under the Authorized Shares method or $400 under the Assumed Par Value Capital method. The maximum is $200,000. Large corporate filers, meaning corporations listed on a national securities exchange that also meet the revenue or asset tests, pay $250,000. That ceiling is one answer to why Delaware franchise tax is so high for big companies, though for small ones the notice figure, not the real liability, is usually the problem.

On top of the tax, you pay the Delaware annual report fee: $50 for non-exempt corporations and $25 for exempt ones. The report and the tax are both due on 1 March and are filed online.

If you owe $5,000 or more, you pay in instalments:

• 1 June: 40%

• 1 September: 20%

• 1 December: 20%

• 1 March: the remainder

Missing the Delaware franchise tax due date costs a $200 penalty plus 1.5% interest a month on the tax and penalty. Under s.510, a corporation that fails to pay franchise tax, or to file a complete report, for one year has its charter declared void. A void charter is far more expensive to fix than the original bill.

Delaware LLC annual tax: $400 a year, due 1 June

LLCs skip the share maths entirely. Under Title 6 s.18-1107, as amended by HB 400 (85 Del. Laws c.273, signed 21 May 2026), the Delaware LLC annual tax is $400 a year, up from $300, effective for tax year 2026. The same $400 applies to limited partnerships and general partnerships. HB 400 did not change corporate franchise tax rates.

The tax is paid in arrears on 1 June after the calendar year closes. So the bill due 1 June 2026 covered 2025 and was $300, while the bill due 1 June 2027 covers 2026 and is $400. That is why your next payment is $100 higher than the last one, even though nothing about your company has changed.

Late payment brings a $200 penalty plus 1.5% interest a month. The LLC also loses its good standing, which can block bank accounts, contracts and fundraising. If the tax stays unpaid for three years, the certificate of formation is cancelled under s.18-1108. If you are comparing states on cost, see our guide to the best US state to form an LLC as a non-resident.

What non-resident owners need to file on time

For corporations, the gross assets figure used in the Assumed Par Value Capital method is the "total assets" line on federal Form 1120, Schedule L. In practice, that means your federal return needs to be in reasonable shape before 1 March, or at least your year-end balance sheet must be final. Foreign-owned LLCs have their own federal filings; our explainer on Form 5472 and the pro forma 1120 covers those.

The annual report also asks for your registered office and agent, your principal place of business, the names and addresses of all directors and of the officer who signs it, and your authorised shares and their par value. Check that these match your board records before you file. A report that is incomplete counts as unfiled, and that is the route to a void charter.

Cosmos keeps your US filings on one calendar: the 1 March report, any instalment dates, the 1 June LLC tax and the federal deadlines that feed into them. If you run several companies, our piece on keeping filings on track across a multi-entity group shows how to stop deadlines slipping between entities.

Frequently asked questions

Can I pay the Assumed Par Value Capital figure if the notice shows a higher amount? Yes. The notice is based on the Authorized Shares method, but you are entitled to pay the lower result. To use it, give your total gross assets and all issued shares (including treasury shares) in the annual report when you file online.

Does a Delaware LLC file an annual report? No. A Delaware LLC pays the $400 annual tax by 1 June and files no annual report.

What is the maximum Delaware franchise tax? The maximum is $200,000. Large corporate filers, listed on a national securities exchange and meeting the revenue or asset tests, pay $250,000.

What happens if I do not pay Delaware franchise tax? You pay a $200 penalty plus 1.5% interest a month on the tax and penalty. If the tax or a complete report is outstanding for a year, the corporation's charter is declared void under s.510.

The scary number on the notice is rarely the number you owe. Run both methods, pay the lower figure plus the report fee by 1 March, and diarise the 1 June LLC payment at its new $400 rate. If you would rather not track all of this yourself, Cosmos can keep every US deadline on one calendar so you can see each date well before a missed one turns into a void charter.