Delaware franchise tax · Free calculator
Delaware says you owe $85,000? You may owe a fraction of that.
Delaware corporations can calculate franchise tax using two different methods — and the notice you received shows only one of them. Enter your company's actual numbers and compare both.
No email required. No signup. Just the calculation.
Your company
The tax year the annual report covers. The report for a year is due the following March 1.
This calculator is for corporations with par-value stock. Delaware LLCs pay a flat annual tax instead — no calculation needed. It isn't built for companies Delaware has designated Large Corporate Filers, which pay a flat $250,000.
Share information
Assets
Use total assets from the Form 1120, Schedule L for the year ended December 31, 2026. Delaware uses the return for the fiscal year that ended during the report year.
One more thing
Most companies answer no. Changes usually come with a priced round or a charter amendment.
Your calculation may require proration.
Changes to authorized shares or par value during the year can require a period-by-period Delaware franchise tax calculation. This calculator is designed for companies with one capital structure during the year.
Talk to Talara about the calculationNo email, no signup — the result appears right here.
Both methods, side by side.
Enter your numbers and we'll compare Delaware's two calculation methods — and show which one produces the lower tax for your company.
A few numbers need attention.
Your estimated Delaware franchise tax
Using the lower of the two calculation methods
Authorized Shares Method
Based primarily on the number of shares your charter authorizes.
Assumed Par Value Capital Method
Based on issued shares, authorized shares, and gross assets.
Every step below uses Delaware's published method and the numbers you entered.
Method and rates: Delaware Division of Corporations, How to Calculate Franchise Taxes; Delaware Code Title 8, §503–504.
Difference between methods
This result is at Delaware's $200,000 maximum for ordinary corporations. Companies Delaware has designated Large Corporate Filers pay a flat $250,000 instead and can't recalculate — they should not rely on this calculator.
This calculator provides an estimate for planning purposes. Delaware franchise tax depends on the company's specific capitalization, assets, tax year, and other facts, and it isn't built for no-par stock, mid-year charter changes, or Large Corporate Filers. Confirm the calculation before filing.
The short answer
Why did Delaware say I owe so much?
01
Your charter authorizes millions of shares.
Most venture-backed startups authorize 10 million shares or more at incorporation — long before most of them are issued.
02
Delaware starts from what it already has.
The state can calculate tax using the Authorized Shares Method from your charter alone — so that's the number on your notice.
03
The alternative needs your numbers.
The Assumed Par Value Capital Method requires your issued shares and gross assets — information only you can supply.
A startup with 10 million authorized shares can see a frightening initial calculation even when the alternative method produces a much smaller tax.
Before you start
Where do I find these numbers?
Every input comes from a document you already have. Find them once and the calculation takes a minute.
Your Certificate of Incorporation, including any amendments — look for "the total number of shares of stock which the Corporation shall have authority to issue."
Your cap table — Carta, Pulley, Clerky, or your law firm's records — as of your fiscal year end. Delaware counts all issued shares, including treasury shares.
Your Certificate of Incorporation, in the same clause as authorized shares — typically $0.0001 or $0.00001 for startups.
The applicable federal income tax return — "total assets" on Form 1120 Schedule L, or your year-end balance sheet. Ask your bookkeeper if in doubt.
Your federal income tax return — the tax period shown at the top of Form 1120. Most startups are calendar-year (December 31).
Worked example
Why a startup can go from an $85,000 calculation to a much smaller amountIllustrative company
A typical seed-stage company
Authorized Shares Method
$85,165
Driven almost entirely by the 10 million authorized shares — $250 for the first 10,000, then $85 for each additional 10,000.
Assumed Par Value Capital Method
$2,000
$2,000,000 ÷ 4,000,000 issued shares gives an assumed par of $0.50; × 10,000,000 authorized shares = $5,000,000 of assumed capital; 5 × $400.
The difference isn't a loophole — it's the design. The two methods measure different things. One measures the charter; the other measures the company. Delaware lets corporations pay the lower of the two. The company here is hypothetical, but both figures are calculated with Delaware's published method — the filed calculation is always run against your actual numbers.
The two methods
Delaware gives corporations two ways to calculate franchise tax
Authorized Shares Method
The simpler of the two — the tax scales with the number of shares your charter authorizes, regardless of how many are issued or what the company owns.
It's the method Delaware uses on your notice, and for companies with few authorized shares it can genuinely be the better answer. For startups that authorized millions of shares, it can produce surprisingly large amounts.
Assumed Par Value Capital Method
Uses more company-specific information — issued shares, authorized shares, and gross assets — to compute the tax from the company's actual scale.
It may produce a lower amount for many venture-backed startups, but not always. That's why the right move is to calculate both and file with the lower one.
Neither method is automatically the right method for every company. The calculator compares both and shows the lower result. Both methods carry a $200,000 maximum for ordinary corporations; a company Delaware has designated a Large Corporate Filer pays a flat $250,000 instead and should confirm its position with Delaware or with us.
Common questions
Delaware franchise tax, answered
Possibly not. The amount on your notice is calculated with the Authorized Shares Method, using only the information in your charter. Delaware permits corporations to recalculate using the Assumed Par Value Capital Method and pay the lower of the two. For many venture-backed startups the difference is dramatic — but the only way to know is to run both with your actual numbers.
Almost always because your charter authorizes a large number of shares. The default method scales with authorized shares — not with the company's size, revenue, or what the stock is worth. A pre-revenue startup with 10 million authorized shares gets the same default calculation as a mature company with the same charter.
Delaware's alternative calculation. Instead of taxing the charter's authorized shares alone, it derives an "assumed par value" from your gross assets and issued shares, and computes the tax from that. It requires information Delaware doesn't have on file — your issued shares and total gross assets — which is why it never appears on the initial notice.
Delaware uses the "total assets" figure reported on Form 1120 Schedule L for the applicable fiscal year — the bottom of the assets side of your year-end balance sheet. Cash, receivables, equipment, and other assets all count, net only of allowances for bad debts and accumulated depreciation, depletion, and amortization; liabilities are not subtracted.
Each class enters the calculation with its own authorized shares and par value, and issued shares are totaled across every class. Add each class in the calculator above — after a priced round, most companies have at least common and one series of preferred. Your Certificate of Incorporation (as amended) lists every class.
It can, in two ways: a priced round usually amends the charter to authorize more shares (raising the default calculation), and the cash raised increases gross assets (which feeds the alternative method). Neither is a reason to avoid raising — but it's why the bill often jumps the year after a round, and why the calculation is worth checking each year.
For a fiscal-year corporation, gross assets come from the federal income tax return for the fiscal year that ended during the Delaware report year. A company with a June 30 year-end filing the 2025 Delaware report would use total assets from the Form 1120 for the fiscal year ended June 30, 2025. The calculator adjusts its instructions once you tell it your fiscal year end.
A mid-year change to authorized shares or par value — common after a priced round — can require a period-by-period proration of the calculation. This calculator is built for companies with one capital structure during the year, so if that's you, talk to us and we'll run the prorated calculation.
For Delaware corporations, the annual report and franchise tax are due March 1 each year. Separately, a corporation whose franchise tax for the previous year was $5,000 or more must pay quarterly estimated installments the following year, based on that prior-year assessment — 40% by June 1, 20% by September 1, and 20% by December 1 — with the balance settled with that year's annual report the next March 1. Our startup tax calendar tracks the full schedule.
Delaware assesses a $200 penalty plus 1.5% monthly interest on unpaid balances, and the company falls out of good standing — which surfaces at the worst moments: financings, banking, and diligence. If you've already missed the date, file promptly; the situation is very fixable.
Yes — Delaware explicitly allows corporations to pay the lower of the two calculations. Filing with the Assumed Par Value Capital Method simply requires reporting your issued shares and gross assets on the annual report. It isn't an election you apply for; it's how the filing works.
Want us to handle the filing?
Talara can review the calculation, prepare the Delaware annual report, and make sure the filing uses the appropriate method.