Delaware Franchise Tax 2026: Everything You Need to Know
A comprehensive guide to Delaware franchise tax in 2026. Calculation methods, deadlines, penalties, and how to avoid overpaying.
The basics
If you have a corporation registered in Delaware, and there are roughly 1.9 million of them, you owe the state a franchise tax every year. It has nothing to do with revenue, profit, or whether your company actually operates in Delaware. It is simply the price of being incorporated there.
The deadline is 1 March each year. Miss it, and you will owe a $200 penalty plus 1.5% monthly interest on the unpaid balance. That adds up faster than most people expect.
Two calculation methods
Delaware offers two ways to calculate your franchise tax. You may use whichever produces the lower amount, and the difference can be enormous.
The Authorised Shares method
This is the default method shown on your filing. It is based purely on the number of shares your corporation is authorised to issue:
- 5,000 shares or fewer: $400 (the minimum)
- 5,001 to 10,000 shares: $750
- Each additional 10,000 shares (or portion thereof): $85
- Maximum: $200,000
| Shares | Tax |
|---|---|
| 5,000 or fewer | $400 |
| 5,001 to 10,000 | $750 |
| Each additional 10,000 | +$85 |
| Maximum | $200,000 |
This method takes no account of what those shares are actually worth. A startup with 10 million authorised shares at $0.0001 par value could receive a tax bill of over $80,000 using this method, even if the company has barely any revenue.
The Assumed Par Value Capital method
This alternative method considers your company's total gross assets (as reported on your federal tax return) and total issued shares. It often produces a dramatically lower figure for companies with large share authorisations but modest assets.
The calculation:
- Divide total gross assets by total issued shares to get the assumed par value per share
- Multiply the assumed par value by the number of authorised shares to get the assumed par value capital
- Apply the rate of $400 per $1 million of assumed par value capital (or portion thereof)
- Minimum: $400
The key point: if your company authorises millions of shares but has only issued a fraction of them, and your total assets are modest, this method almost always saves money. For many startups, it brings the tax down from tens of thousands of dollars to the $400 minimum.
LLCs and LPs: a flat fee
Delaware LLCs and limited partnerships do not pay franchise tax in the traditional sense. Instead, they pay a flat $300 annual tax due by 1 June each year. No calculation required, no annual report to file, just the payment.
| Deadline | Filing |
|---|---|
| 1 March | Corporation franchise tax and annual report |
| 1 June | LLC/LP annual tax ($300) |
Common mistakes
Paying the default amount without checking the alternative method. The state sends you a bill using the Authorised Shares method. If you have more than 5,000 authorised shares, always run the Assumed Par Value Capital calculation before paying. Most accountants do this as a matter of course, but if you are handling it yourself, do not skip this step.
Forgetting that the deadline is 1 March, not April. Tax deadlines in the US cluster around April, so it is easy to assume Delaware follows the same pattern. It does not.
Ignoring the filing after dissolving. Even if you have dissolved your corporation, you may still owe franchise tax for the year of dissolution. Confirm with the Division of Corporations that your obligations are fully settled.
How CompCal helps
CompCal tracks your Delaware franchise tax deadline automatically. Upload your formation documents, and the system extracts your entity details, jurisdiction, and key dates. You will receive alerts at 90, 60, 30, 14, 7, and 1 day before the deadline, enough lead time to review, calculate, and pay without drama.
For multi-entity businesses, this is especially useful. If you manage five, ten, or fifty Delaware entities alongside companies in other states, CompCal consolidates every deadline into a single dashboard. No more spreadsheets, no more calendar reminders that get lost in the noise.
Get started with CompCal and take the guesswork out of franchise tax season.