Delaware franchise tax explained: LLC vs Corp, calculator, deadlines (2026)

What is the Delaware franchise tax for an LLC?

The Delaware LLC franchise tax is a flat $300 annual fee paid to the Delaware Division of Corporations under 6 Del. C. § 18-1107(b). The amount is the same whether your LLC made $0 or $50 million, whether it has one member or fifty members, whether you are a US resident or based in Bangladesh. It is due every year by June 1, starting the calendar year after formation. An LLC formed in 2026 owes its first $300 by June 1, 2027.

It is not an income tax. It is a flat franchise tax for the privilege of being a Delaware LLC. Delaware does not impose state income tax on LLCs whose income is earned outside Delaware (6 Del. C. Title 30 § 1126), and Delaware has no state-level sales tax. Most non-resident-owned Delaware LLCs owe only this $300 and have no other Delaware state tax obligation each year.

The $300 was set when Delaware moved LLCs to a flat-fee model years ago. There has been no announced legislative change to the rate as of May 2026, and Delaware Division of Corporations annual reports do not signal upcoming changes. The flat rate is part of what makes Delaware LLCs cheap to maintain compared to states like California ($800 minimum LLC tax per year regardless of revenue).

When is it due and how do you pay?

Due date: June 1 each year. You pay online at corp.delaware.gov by entering your Delaware file number and following the payment flow. The file number is the 7-digit identifier assigned when your Certificate of Formation was accepted; it appears on the Certificate itself and in your Delewarellc formation packet.

The payment portal accepts credit card and ACH. ACH is cheaper (no processing fee); credit card adds a small convenience fee. International cards are accepted but sometimes flagged for verification, which adds a day or two. Pay before May 25 to leave buffer for any payment failure to be re-tried before the June 1 deadline.

Most registered agents (Delewarellc included) send free reminders 30-60 days before June 1. Delewarellc sends reminders to every customer regardless of whether the customer renews registered agent service with us, because the cost of missing the deadline is so much higher than the cost of sending an email. Delewarellc provides free annual reminders for Delaware franchise tax (June 1 LLC), BOI reports, Form 5472, and foreign qualification renewals. Most competitors charge $99-$199/year for the equivalent.

How is Delaware Corporation franchise tax different?

Delaware Corporations have a more complex franchise tax with two calculation methods: Authorized Shares (minimum $175, codified at 8 Del. C. § 503) and Assumed Par Value Capital (minimum $400). The maximum under either method is $200,000 per year. Corporations must file a mandatory annual report by March 1, with a $50 filing fee. LLCs file neither an annual report nor authorized-shares calculations.

Practically, a single-member non-resident Delaware LLC pays $300 per year flat. A typical Delaware C-Corp with 10 million authorized shares ends up paying $1,000 to $5,000 per year under the Authorized Shares Method, or $400 minimum under the Assumed Par Value Method when the Corp chooses to recalculate. This is one reason non- resident bootstrap founders prefer LLCs over C-Corps unless they have a specific VC plan that requires C-Corp structure.

Delaware Corporation franchise tax: the Authorized Shares Method

Method 1, the Authorized Shares Method, calculates franchise tax from the number of authorized shares listed in your Certificate of Incorporation. The structure: $175 for the first 5,000 authorized shares, $250 for 5,001 to 10,000, then $85 per additional 10,000 shares above that, up to the $200,000 cap.

Most early-stage Delaware C-Corps authorize 10 million shares at formation (a common pattern in YC-style standard documents). Under the Authorized Shares Method, 10 million authorized shares produces a Year 1 franchise tax of approximately $85,165, which is shocking the first time you see it. This is exactly why founders should always check the Assumed Par Value Method, which usually drops the bill to a fraction of that amount.

Delaware Corporation franchise tax: the Assumed Par Value Method

Method 2, the Assumed Par Value Method, calculates franchise tax from the corporation's total gross assets and issued shares. The math: divide gross assets by total issued shares to get assumed par value; multiply that by total authorized shares to get assumed par value capital; multiply by $400 per million dollars (rounded up) to get the tax. Minimum is $400.

For early-stage Delaware C-Corps with few issued shares and modest assets, the Assumed Par Value Method drops the franchise tax to the $400 minimum. Most accountants recommend electing this method whenever it produces a lower number, which is almost always for pre-revenue or early-revenue startups. The Delaware online portal calculates both methods automatically and lets you pay whichever is lower.

Practical example: a Delaware C-Corp with 10 million authorized shares, 5 million issued shares, and $500,000 in gross assets. Authorized Shares Method = ~$85,165. Assumed Par Value Method = $400 minimum. Election: pay $400. The $84,765 savings is the difference between knowing about the Assumed Par Value Method and not knowing about it.

Free Delaware franchise tax calculator

A working franchise tax calculator will live at our calculator page in the next build. The calculator accepts entity type (LLC or Corporation), authorized shares, issued shares, and gross assets, then returns the LLC flat tax or the lower of Authorized Shares / Assumed Par Value methods for Corporations. It mirrors the math in Delaware's official corp.delaware.gov calculator.

Deadlines and the seasonal calendar

Two Delaware-mandated dates matter:

• March 1: Delaware Corporations only. Annual report + franchise tax due. $50 annual report filing fee plus franchise tax (Authorized Shares or Assumed Par Value method, whichever is lower). LLCs do not file March 1.
• June 1: Delaware LLCs only. Flat $300 franchise tax due. No annual report required.

Plan around these dates. Most non-resident bootstrap founders running Delaware LLCs have just one Delaware obligation per year (the $300 June 1), which is simpler than the Delaware Corporation case. If you also have federal Form 5472 obligation, that is due April 15 (or the 15th day of the 4th month after fiscal year end), with a six-month extension to October 15 available via Form 7004. The CPA usually handles the April 15 filing.

How to pay online at corp.delaware.gov

The official payment portal is at corp.delaware.gov. The flow:

1. Go to corp.delaware.gov and click "Pay Taxes/File Annual Reports."
2. Enter your Delaware file number (7-digit identifier from your Certificate of Formation).
3. The portal shows your entity name and the amount due. For LLCs, this is always $300.
4. Click "Proceed to Payment." Select ACH or credit card.
5. Enter payment details. Submit.
6. Save the confirmation. Print or screenshot for your records.

Total time on the portal: about 5 minutes for an LLC. Corporations take 15-30 minutes because of the annual report fields. Keep the confirmation for your records; banks occasionally ask for proof of good standing during account reviews.

What happens if you do not pay

Year 1 of non-payment: $200 penalty plus 1.5% monthly interest. Your LLC is "not in good standing" with Delaware. You cannot get a Certificate of Good Standing, which is sometimes required for foreign qualification, bank applications, or contract counterparty due diligence. The registered agent will typically send repeated reminders during this year.

Year 2 of non-payment: Delaware cancels the LLC. The registered agent can withdraw, the entity is officially dissolved by the state, and any bank accounts in the LLC's name become problematic when the bank does its next KYC refresh and finds the entity has been cancelled. Stripe accounts may freeze; counterparty contracts may be challenged because the LLC technically no longer exists.

Restoration requires a Certificate of Revival ($200 state fee) plus all back-owed taxes and penalties. The Revival process takes 1-2 weeks. Restoration is usually possible if you act within a few years of cancellation, but the accumulated penalties grow at 1.5% monthly compound interest, so the longer you wait the more expensive the revival.

What about Delaware state income tax?

Delaware does not impose state income tax on LLCs whose income is earned outside Delaware (6 Del. C. Title 30 § 1126). Most non-resident-owned Delaware LLCs have no Delaware nexus, so no Delaware state income tax applies. The franchise tax is the only Delaware state-level obligation.

Delaware does have a gross receipts tax that applies to businesses with Delaware nexus (a physical office, employees, or substantial sales activity in Delaware), but this rarely reaches non-resident-only LLCs. Delaware also does not have a state-level sales tax, which is unusual among US states and is one of the historical reasons Delaware became popular for holding-company structures.

Delaware Corporations doing business in Delaware are subject to the Delaware corporate income tax at 8.7% on in-state net income (6 Del. C. Title 30 § 1902), but this applies only to Delaware-source income. Non-resident-owned Delaware C-Corps with no Delaware operations also do not owe Delaware corporate income tax.

First-party context cited on this page

Delewarellc's free annual compliance reminders cover the Delaware franchise tax deadline for every customer. Delewarellc provides free annual reminders for Delaware franchise tax (June 1 LLC), BOI reports, Form 5472, and foreign qualification renewals. Most competitors charge $99-$199/year for the equivalent. The full set of recurring obligations is on the cost breakdown page.