In short
- Corporation: a $50 report and franchise tax from $175 by 1 March. LLC: $400 by 1 June, with no report.
- The lower of two methods applies, up to $200,000; a large listed corporation pays a fixed $250,000.
- 10,000,000 authorized shares cost $85,165 by shares, and $400 by assumed par on $250,000 of assets.
- Late: $200 and 1.5% a month. A year unpaid voids a charter; three years cancel an LLC.
In this guide
What Delaware franchise tax is and who pays it
Delaware charges every company formed under its law a yearly tax for its charter. A corporation pays franchise tax counted from its shares or from its assets, and files an annual report with the payment. An LLC, a limited partnership and a general partnership pay a flat $400 and file no report. Neither amount depends on profit, sales or activity.
The tax runs for as long as the company stands on the state's records. An LLC owes the full $400 for any year in which it was active there, with no proration, so an LLC formed in December pays it the next June. A company that stops trading keeps owing tax, penalty and interest until it is formally closed.
We work out the tax, file the report and pay it on its date as part of accounting in the USA. For the other state fees and the yearly cost of a US company, see the USA services page.
Delaware franchise tax due dates and fees for 2026
The amounts are the state's own, as the Division of Corporations and the Delaware Code publish them in October 2026. Each December the Division sends its tax notices to every company's registered agent. House Bill 400, signed on 21 May 2026, raised the tax of an LLC, LP or GP from $300 to $400 from 1 January 2026. The next payment, due on 1 June 2027, is the tax for 2026.
| Who | What is due | By |
|---|---|---|
| Delaware corporation | Annual report $50 and franchise tax from $175 | 1 March |
| Corporation that owes $5,000 or more | Estimated tax: 40%, 20%, 20%, then the balance | 1 June, 1 September, 1 December, 1 March |
| Delaware LLC, LP or GP | Tax of $400 for 2026, no annual report | 1 June 2027 |
| Corporation formed elsewhere and registered in Delaware | Annual report $250 | 30 June |
| Delaware corporation, LLC, LP or GP, late | Penalty of $200 and interest of 1.5% a month | from the day after the due date |
A corporation's franchise tax stops at $200,000 under either method. A large corporate filer pays a fixed $250,000. The Code means a corporation listed on a national securities exchange with $750 million or more of revenue or of assets and at least $250 million of each.
The assumed par value capital method in six steps
The assumed par value capital method measures the company's assets against its issued shares. A corporation can use it only when its report states the issued shares, treasury shares included, and the total gross assets. Gross assets are the total assets on Schedule L of the federal return, Form 1120, for the fiscal year that ends in the report's calendar year.
- Divide the total gross assets by the number of issued shares, to six decimal places. The result is the assumed par.
- Take each class of authorized shares whose par value is below the assumed par and multiply its number by the assumed par.
- Take each class whose par value is above the assumed par and multiply its number by its own par value.
- Add the results of steps 2 and 3. The sum is the assumed par value capital.
- Round the capital up to the next whole million, divide it by 1,000,000 and multiply by $400.
- Raise a result below $400 to $400, the minimum of this method, and cap it at $200,000.
The Division's worked case has $1,000,000 of assets and 485,000 issued shares, so the assumed par is $2.061856. Its 1,000,000 shares with a lower par count at that figure, $2,061,856, and its 250,000 shares of $5 par add $1,250,000. The capital of $3,311,856 rounds up to $4,000,000, and the tax is 4 times $400, or $1,600. For shares of no par value the Division states that the authorized shares method always gives the lower tax.
We do this for you Accounting services in the USA books, federal returns and state filings
Worked example: 10,000,000 shares and $250,000 of assets
A Delaware corporation authorizes 10,000,000 common shares of $0.00001 par. Its founders and first investors hold 8,000,000 issued shares, and on 31 December its balance sheet shows $250,000 of total assets, mostly the cash it raised.
| Step | Authorized shares method | Assumed par value capital method |
|---|---|---|
| Figure the method starts from | 10,000,000 authorized shares | $250,000 of assets divided by 8,000,000 issued shares: an assumed par of $0.031250 |
| Calculation | $250 plus 999 steps of $85 | 10,000,000 shares at $0.031250 give $312,500 of capital, under one million |
| Franchise tax | $85,165 | $400 |
| With the $50 annual report | $85,215 | $450 |
The corporation pays the lower figure: $450 by 1 March. Its par of $0.00001 is below the assumed par, so every authorized share counts at $0.031250. If it raises more and ends the next year with $5,000,000 of assets on the same 8,000,000 shares, the assumed par rises to $0.625 and the capital to $6,250,000. Rounded up to $7,000,000, that capital gives a tax of $2,800.
The method favours a company that has issued most of its authorized shares. A corporation with 10,000,000 authorized shares and 1,000 issued has an assumed par of $250 on the same $250,000 of assets. Its capital comes to $2.5 billion, and its tax by assumed par to the $200,000 ceiling. It pays $85,165 by authorized shares. Issuing the founders' shares before the first report keeps the second method open.
How to calculate Delaware franchise tax: the formula and eight cases
Four figures decide the tax: the authorized shares, their par value, the issued shares and the total gross assets. The rules of the two methods reduce to four lines.
- Tax by authorized shares: $175 up to 5,000 shares and $250 up to 10,000. Above that, $250 plus $85 times the shares above 10,000 divided by 10,000 and rounded up, to a highest $200,000.
- Assumed par: gross assets divided by issued shares. Capital: the shares of each class times the higher of their par value and the assumed par.
- Tax by assumed par: $400 times the capital divided by 1,000,000 and rounded up, never below $400 or above $200,000.
- Amount due: the lower of the two taxes plus the $50 report. A tax of $5,000 or more is paid in the four instalments.
| Company at the year end | By authorized shares | By assumed par | Tax due |
|---|---|---|---|
| 5,000 shares, all issued, $20,000 of assets | $175 | $400 | $175 |
| 10,000 shares, all issued, $50,000 of assets | $250 | $400 | $250 |
| 100,000 shares, all issued, $80,000 of assets | $1,015 | $400 | $400 |
| 1,000,000 shares, all issued, $500,000 of assets | $8,665 | $400 | $400 |
| 10,000,000 shares, 8,000,000 issued, $250,000 of assets | $85,165 | $400 | $400 |
| 10,000,000 shares, 8,000,000 issued, $5,000,000 of assets | $85,165 | $2,800 | $2,800 |
| 10,000,000 shares, 8,000,000 issued, $20,000,000 of assets | $85,165 | $10,000 | $10,000, in instalments |
| 10,000,000 shares, 1,000 issued, $250,000 of assets | $85,165 | $200,000 | $85,165 |
Each case has one class of shares with a par below the assumed par, and the $50 report fee comes on top. A report without issued shares and gross assets pays the second column.
What a late or unpaid Delaware franchise tax costs
A corporation that misses 1 March pays a $200 penalty, and its unpaid tax bears interest of 1.5% for each month or part of a month. An LLC that misses 1 June pays the same $200, with 1.5% a month on the tax and the penalty. Until everything is paid, the Secretary of State issues no certificate of good standing.
| Unpaid for | Corporation | LLC |
|---|---|---|
| From the day after the due date | $200 penalty, interest of 1.5% a month | $200 penalty, 1.5% a month on tax and penalty |
| Until paid in full | No certificate of good standing | Out of good standing, restored on payment |
| 1 year | Charter void | Tax, penalty and interest keep running |
| 3 years from the due date | Charter void | Certificate of formation cancelled |
The Secretary of State warns each corporation in default by 30 November that its charter will become void unless it pays the tax and files the report by the next 1 March. By 30 June the Governor proclaims the charters of the corporations still in default repealed.
How to file the Delaware annual report and pay the tax
Delaware takes the annual report of a corporation online only, on the Division's site, and the payment goes with it. The report follows five steps.
- Close the balance sheet at 31 December and count the issued shares, treasury shares included.
- Work out the tax by both methods with the formula above and keep the lower figure.
- Fill in the report: the registered office and agent, the nature of the business and its principal place, the authorized shares and their par, the directors with addresses, the officer who signs.
- Have an officer or a director sign with the title shown. Before a board is elected, an incorporator signs.
- Pay the tax and the $50 fee by card or from a bank account by 1 March. A payment over $5,000 goes by ACH debit.
An LLC files no report. It pays its $400 through the Division's tax portal for LLCs, LPs and GPs by 1 June, by card or by ACH debit.
We file the report and pay the tax on its date with accounting in the USA. A founder still choosing between a corporation and an LLC compares both yearly costs on company formation in the USA. The federal filing of an LLC with one owner abroad is in Form 5472 for a foreign-owned LLC.
