What is Delaware Franchise Tax? Definition, requirements, and how it applies to your business formation. Learn everything about delaware franchise tax for LLCs and corporations.
# Delaware Franchise Tax
The Delaware Franchise Tax is an annual tax paid by all entities incorporated in Delaware, regardless of where they conduct business. For corporations, it is calculated using either the Authorized Shares Method (based on number of authorized shares) or the Assumed Par Value Capital Method (based on total assets and issued shares) — taxpayers may use whichever method produces the lower amount.
The minimum annual franchise tax for Delaware corporations is $400, with a maximum of $200,000. Delaware LLCs pay a flat $300 annual tax regardless of revenue or assets. The filing deadline is March 1 for corporations and June 1 for LLCs.
Lovie calculates your Delaware franchise tax using both methods and files using the lower amount, potentially saving thousands compared to the default Authorized Shares calculation.