Who pays Delaware franchise tax, and how much
Every company formed in Delaware owes the State something each year. What you owe depends on the type of entity, not on profit or where you live. An LLC pays a flat tax. A corporation files an annual report and pays a tax worked out from its shares or its assets.
| Entity | What is due | Amount | Deadline |
|---|---|---|---|
| Domestic LLC, LP or GP | Annual tax only (no annual report) | $400 from the 2026 tax year ($300 was due 1 June 2026) | 1 June, for the previous calendar year |
| Domestic corporation (non-exempt) | Annual report + franchise tax | $50 filing fee + tax from $175 to $200,000 | 1 March, for the previous calendar year |
| Domestic exempt corporation | Annual report | $25 filing fee | 1 March |
| Foreign corporation registered in Delaware | Annual report | $250 | 30 June |
The figures for corporations come from the Division of Corporations' Annual Report and Tax Information page. The LLC figures come from its LLC/LP/GP tax instructions.
Delaware LLC tax: a flat amount, due 1 June
A Delaware LLC pays one flat annual tax and does not file an annual report. The Division's LLC instructions state the tax as $400 and say "There is no requirement to file an Annual Report."
The rate rose in 2026. Delaware's House Bill 400 raised the LLC, LP and GP tax from $300 to $400 with effect from 1 January 2026. The tax is paid in arrears, so:
- The payment due on 1 June 2026 covered the 2025 year and was $300.
- The first $400 payment covers the 2026 year and is due on 1 June 2027.
- An LLC formed at any point in 2026 owes the 2026 tax by 1 June 2027.
The State's tax FAQ page still shows $300. The tax instructions page and the current text of 6 Del. C. § 18-1107 both say $400, so plan on $400.
The same statute says the tax is due "on the first day of June following the close of the calendar year or upon the cancellation of a certificate of formation." If you close an LLC, the tax for the final period is due when you cancel. For state-by-state formation costs and the rest of the Delaware LLC picture, see our Delaware LLC page.
Corporations: annual report and franchise tax by 1 March
A Delaware corporation must file an annual report and pay franchise tax online by 1 March each year for the previous year. The Annual Report and Tax Instructions page says domestic corporations must file online and that non-exempt corporations pay a $50 filing fee (exempt corporations pay $25).
Under 8 Del. C. § 502, the report includes:
- The registered office address and the name of the registered agent.
- The nature of the business (the Division now requires this on all domestic annual reports).
- The principal place of business address.
- The names and addresses of all directors as of the filing date.
- The name and address of the officer who signs the report.
- Stock details: authorized shares and par values, plus issued shares and gross assets if you use the Assumed Par Value Capital method.
The tax notice is sent to your registered agent. The tax FAQ says "All Tax Notices are printed in December of the year that tax is due and sent to the Registered Agent." Make sure your registered agent forwards it.
The two calculation methods
Delaware lets a corporation pay the lower of two results. The How to Calculate Franchise Taxes page tells you to use "the method that results in the lesser tax." Many startups receive a large bill because the notice is based on authorized shares alone, then pay far less once they recalculate with the second method.
Authorized Shares method
This method looks only at how many shares your certificate of incorporation authorizes.
| Authorized shares | Tax |
|---|---|
| 5,000 or fewer | $175 (minimum) |
| 5,001 to 10,000 | $250 |
| Each additional 10,000 shares or part of 10,000 | add $85 |
| Maximum | $200,000 |
A company authorized to issue 10,000,000 shares pays $250 for the first 10,000 shares, plus 999 further blocks of 10,000 at $85 ($84,915). That is $85,165 under this method, which is why founders are often alarmed by their first notice.
Assumed Par Value Capital method
This method uses your total gross assets and your issued shares. The Division defines total gross assets as the "total assets" reported on US Form 1120, Schedule L. The steps are:
- Divide total gross assets by total issued shares. The result is the assumed par.
- For each class of stock with a par value lower than the assumed par, multiply the number of authorized shares by the assumed par.
- For each class with a par value equal to or higher than the assumed par, multiply the authorized shares by their stated par value.
- Add the results. This is the assumed par value capital.
- Divide by $1,000,000 and round any fraction up to the next whole million.
- Multiply by $400. The minimum under this method is $400.
The Division notes that "For corporations having no par value stock the authorized shares method will always result in the lesser tax."
Worked example from the Division of Corporations
This example is taken from the Division's calculation page. A corporation has 1,000,000 authorized shares at $1.00 par and 250,000 authorized shares at $5.00 par. Its total gross assets are $1,000,000 and it has issued 485,000 shares.
| Step | Calculation | Result |
|---|---|---|
| Assumed par | $1,000,000 / 485,000 | $2.061856 |
| $1.00 par shares (below assumed par) | 1,000,000 x $2.061856 | $2,061,856 |
| $5.00 par shares (above assumed par) | 250,000 x $5.00 | $1,250,000 |
| Assumed par value capital | $2,061,856 + $1,250,000 | $3,311,856 |
| Tax | 4 (millions, rounded up) x $400 | $1,600 |
For comparison, the same 1,250,000 authorized shares under the Authorized Shares method would give $250 plus 124 blocks at $85, which is $10,790 (our arithmetic using the Division's rates). The company pays the lower figure, $1,600, plus the $50 filing fee.
A common early-stage setup is 10,000,000 authorized shares at a very small par value, a few thousand dollars of assets and most shares issued to founders. In that case the Assumed Par Value Capital result is usually well under $1,000,000, so the tax falls to the $400 minimum for that method. You must enter issued shares and gross assets in the online report to get that result. Ask your accountant to confirm the Schedule L figure.
Minimum, maximum and large corporate filers
The minimum tax is $175 under the Authorized Shares method and $400 under the Assumed Par Value Capital method. The maximum for most corporations is $200,000. A corporation identified as a Large Corporate Filer pays $250,000. Under 8 Del. C. § 503, that means a corporation with shares listed on a national securities exchange that reports consolidated annual gross revenues or consolidated assets of at least $750 million, and at least $250 million of both. The tax FAQ confirms a Large Corporate Filer's tax "cannot be recalculated, it is a flat fee."
Corporations that owe $5,000 or more pay in quarterly estimated installments: 40% by 1 June, 20% by 1 September, 20% by 1 December and the balance by 1 March, according to the Division's tax information page.
Penalties, interest and loss of good standing
Late payment costs a $200 penalty plus interest of 1.5% per month, for both corporations and LLCs.
- Corporations: the instructions page says failure to file the report and pay the tax "will result in a penalty of $200.00 plus 1.5% interest per month." Under 8 Del. C. § 510, a corporation that fails for one year to pay its franchise tax or to file a complete annual report has its charter declared void.
- LLCs: § 18-1107 sets a $200 penalty and interest at 1.5% for each month or part of a month. An LLC that does not pay "shall cease to be in good standing," and under § 18-1108 its certificate of formation is canceled if the tax stays unpaid for 3 years.
Being out of good standing can block a bank from confirming your company, stop you obtaining a certificate of good standing and complicate a sale or investment round. Taxes also keep accruing until a dissolution or cancellation is filed. The tax FAQ says "Taxes continue to accrue on a corporation until a legal document filing is received and filed with the State of Delaware."
How to pay online
You pay through the Division's online tax portal, which the instructions page says is available daily from 8:00 a.m. to 11:45 p.m. Eastern Time.
- Find your business entity file number. It is on your formation documents and on the Delaware entity search.
- Open the "Pay Taxes / File Annual Report" service on corp.delaware.gov and enter the file number.
- LLCs: confirm the amount due and pay. Corporations: complete the annual report, including nature of business, directors, officer and share details.
- Corporations using the Assumed Par Value Capital method: enter total gross assets and issued shares so the system recalculates the tax.
- Pay by ACH debit or by Visa, Mastercard, American Express or Discover. ACH is required for payments over $5,000. If you pay by card, click submit only once, as the Division warns that repeated clicks can duplicate charges.
- Save the confirmation and add next year's date to your calendar or our compliance deadline calendar.
Doing it yourself or using our filing service
You can file and pay yourself on the State's portal at no extra cost beyond the tax and the filing fee. For an LLC it is a single payment. For a corporation it takes a few minutes if you know your issued shares and gross assets.
Our annual report and franchise tax service adds preparation and checking. Our filing team works out both methods for corporations, collects director and officer details securely, files before the deadline, stores the confirmation in your portal and reminds you before the next one. The State tax is paid at cost and shown separately. This is a filing service, not tax advice. For questions about your balance sheet or Form 1120, ask a licensed accountant. If you are still choosing an entity, our LLC vs C corp comparison covers the cost difference, and our Delaware C corp formation page explains how to set share numbers with the franchise tax in mind.
Sources
- Delaware Division of Corporations: Annual Report and Tax Information
- Delaware Division of Corporations: How to Calculate Franchise Taxes
- Delaware Division of Corporations: Annual Report and Tax Instructions
- Delaware Division of Corporations: LLC/LP/GP Franchise Tax Instructions
- Delaware Division of Corporations: Frequently Asked Tax Questions
- Delaware Code: Title 8, Chapter 5, Corporation Franchise Tax
- Delaware Code: Title 6, Chapter 18, Subchapter XI (LLC annual tax)
- Delaware General Assembly: House Bill 400
Fees, deadlines and rules on this page were last checked on 27 September 2026.