Delaware Franchise Tax & Annual Filing Fee Calculator

All domestic corporations incorporated in the State of Delaware must file an Annual Franchise Tax Report and pay franchise tax prior to March 1 each year. Failure to file incurs a statutory $200 penalty plus 1.5% monthly interest on the outstanding tax balance.

Delaware provides two distinct statutory calculation methods. While the default Authorized Shares Method frequently results in staggering preliminary assessments (often exceeding $50,000 for standard 10,000,000 authorized shares startup allocations), the alternative Assumed Par Value Capital Method almost universally lowers the tax obligation to the statutory minimum of $400 plus the $50 annual report filing fee.

function calculateDEFranchiseTax() {
const shares = parseFloat(document.getElementById(“de_shares”).value) || 0;
const issued = parseFloat(document.getElementById(“de_issued”).value) || 0;
const assets = parseFloat(document.getElementById(“de_assets”).value) || 0;

// Authorized Shares Method
let taxShares = 175;
if (shares > 5000 && shares 10000) {
taxShares = 250 + Math.ceil((shares – 10000) / 10000) * 85;
}
document.getElementById(“de_shares_method”).textContent = “$” + taxShares.toLocaleString(“en-US”, {minimumFractionDigits: 2});

// Assumed Par Value Method
let assumedPar = (issued > 0) ? (assets / issued) : 0;
let assumedCapital = Math.max(assumedPar * shares, assets);
let taxPar = 400;
if (assumedCapital > 1000000) {
taxPar = 400 + Math.ceil((assumedCapital – 1000000) / 1000000) * 400;
}
let totalRecommended = taxPar + 50; // includes $50 filing fee
document.getElementById(“de_par_method”).textContent = “$” + totalRecommended.toLocaleString(“en-US”, {minimumFractionDigits: 2}) + ” (incl. $50 fee)”;
}

1. Authorized Shares Method Mechanics

Under Title 8, Section 503 of the Delaware Code, the Authorized Shares Method taxes corporations based strictly on the count of shares authorized in their Certificate of Incorporation, regardless of cash balance, revenue, or whether shares have actually been issued:

• 5,000 shares or fewer: Minimum tax of $175.00
• 5,001 to 10,000 shares: $250.00
• Each additional 10,000 shares (or fraction thereof): Additional $85.00
• Maximum statutory tax: $200,000.00 (or $250,000 for Large Corporate Filers)

2. Assumed Par Value Capital Method Mechanics

The Assumed Par Value Capital Method calculates liability by dividing total gross assets (reported from federal Form 1120, Schedule L) by total issued shares, multiplying by authorized shares, and assessing $400 per million dollars of assumed capital. For early-stage startups with asset bases under $1,000,000, this method virtually guarantees the minimum annual franchise tax rate of $400.