Pay Your Delaware Franchise Tax Online

The Delaware franchise tax is an annual tax required for all corporations incorporated in Delaware, regardless of where the company operates or earns revenue. It is not based on income. Instead, it is a fee for the privilege of being incorporated in the state. All Delaware C-Corps must pay this tax and file an Annual Report each year to maintain good standing.

The Delaware franchise tax and Annual Report are due by March 1 of each year for C-Corporations. If you miss the deadline, Delaware imposes a $200 late penalty plus 1.5% monthly interest on the unpaid tax amount. Filing on time is critical to avoid penalties and keep your corporation in good standing.

Delaware offers two calculation methods: the Authorized Shares Method and the Assumed Par Value Capital Method (APVC). The state automatically calculates using the Authorized Shares Method, which often results in a much higher bill. Companies can elect the APVC method instead, which typically produces a significantly lower tax. We calculate both methods and file using whichever results in the lower amount.

The Authorized Shares Method calculates tax based solely on the number of shares your corporation is authorized to issue. The minimum tax is $175 for up to 5,000 shares. For 5,001 to 10,000 shares, the tax is $250. Above 10,000 shares, you pay $250 plus $85 for each additional 10,000 shares or portion thereof, up to a maximum of $200,000. For startups with 10 million or more authorized shares, this method can produce bills of $100,000 or more.

The APVC method calculates tax based on your total gross assets and the number of authorized and issued shares. The formula uses your total gross assets (from your federal tax return), divides by total issued shares to get an assumed par value, then multiplies by authorized shares. The tax rate is $400 per $1,000,000 of assumed par value capital, with a minimum tax of $400. For most startups, this method results in significantly lower tax than the Authorized Shares Method.

The most effective way to save is to use the Assumed Par Value Capital (APVC) method instead of the default Authorized Shares Method. A startup with 10 million authorized shares could owe over $100,000 under the Authorized Shares Method but only $400 under the APVC method. We automatically calculate both methods and file with the lower amount, ensuring you never overpay.

The minimum franchise tax is $175 using the Authorized Shares Method (for companies with 5,000 or fewer shares) or $400 using the Assumed Par Value Capital Method. In addition, every corporation must pay a $50 Annual Report fee. So the minimum total payment to Delaware is $225 (Authorized Shares) or $450 (APVC), depending on which method produces the lower tax for your company.

If you miss the March 1 deadline, Delaware charges a $200 late penalty plus 1.5% monthly interest on the unpaid tax amount. Interest accrues each month until the tax is paid in full. Additionally, your corporation may lose its good standing status, which can affect your ability to open bank accounts, raise funding, or conduct business. Prolonged non-payment can lead to administrative dissolution of your corporation.

We need your company name and Delaware file number (from your Certificate of Incorporation), incorporation date, total authorized shares, par value per share, and total gross assets from your most recent federal tax return (Form 1120, Schedule L). We also need the name, title, and address of at least one officer or director for the Annual Report. If your company was incorporated this year, enter $0 for gross assets.

Yes. If your corporation was incorporated in Delaware at any point during the prior year, you must file a franchise tax return and Annual Report by March 1 of the following year. Even if the company was only incorporated for a few days, the full annual franchise tax is due. There is no prorated amount for partial years. Newly incorporated companies can typically use the APVC method with $0 in gross assets, resulting in the $400 minimum tax plus the $50 Annual Report fee.