Delaware Franchise Tax Calculator
delaware franchise Tax calculators FOR "AUTHORIZED SHARE METHOD" AND "ASSUMED PAR VALUE METHOD" (2023 Rates)
Effective January 1, 2018, a domestic stock or non-stock for profit corporation incorporated in the State of Delaware is required to pay annual franchise tax. All corporations using either method will have a maximum tax of $200,000. Corporations owning $5,000 or more must make estimated payments with 40% due June 1, 20% due by September 1, 20% due by December 1, and 20% due by March 1. The Annual Franchise Tax assessment is based on the authorized shares. Use the method that results in the lesser tax.
2017 Tax Rates
For corporations only, the minimum franchise tax for the Authorized Share Method is $175 per year.
2018 Tax Rates
For corporations only, the minimum franchise tax for the Assumed Par Value Capital Method is $400 per year.
Method #1: Authorized Share Method (default method)
STEP 1: Using Method #1 calculator, enter number of "par value" shares and calculate franchise tax due.
STEP 2: Then, using Method #2 calculator, enter the Total Gross Assets of your company and enter Total Issued Shares to determine Par Value. Enter Authorized Shares for each Class of stock you have. Then, Calculate.
STEP 3: The State of Delaware allows you to pay the lower of the two franchise tax figures.
Delaware offers two methods to calculate a corporation's annual franchise tax obligation:
1) Authorized Share Method (default method) and
2) Assumed Par Value Method
Each year the State of Delaware calculates your corporation's franchise tax obligation based on the Authorized Share Method.
Depending on your corporation's gross assets and authorized shares you may substantially lower your franchise tax obligation by using the Assumed Par Value Method.
The minimum franchise tax is $175. and the maximum franchise tax for all corporations using either method is $200,000. Use the method that results in the lowest franchise tax. Corporations with 1,500 shares or less and NO par value will always have a maximum tax of $175. An annual filing fee of $50 is also assessed each year. It is a requirement that all Delaware corporations file an annual report.
Method #2: Assumed Par Value Capital Method
When using the 'Assumed Par Value Method," you must provide numbers for all issued shares (including treasury shares) AND total gross assets.
Gross assets is defined as "total assets" reported on the U.S. IRS tax form 1120, schedule L. The franchise tax rate is $400 per million or portion of a million.
If the assumed par value capital is less than $1,000,000, the franchise tax is calculated by dividing the assumed par value capital by $1,000,000 then multiplying that result by $400.
However, it's much easier to use our handy calculator below. You'll need to know your corporation's gross assets and authorized shares.
This is a 3-minute video explaining the difference between Delaware Franchise Tax methods and how to use the calculators on this website. Click HERE for large screen video format.
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