Delaware Annual Franchise Tax Report: Calculation, Deadlines, and Penalties

If your company is incorporated in Delaware, you owe a Delaware annual franchise tax report and payment to the Secretary of State by March 1 each year, whether or not the company did any business or made any money. The amount runs from $175 to $200,000 depending on your stock structure and assets. Miss the deadline and a $200 penalty hits immediately, with 1.5% monthly interest on top.¹

Who Files, What They Owe, and When

Every domestic corporation formed in Delaware must file the annual report and pay franchise tax, even if it has stopped operating. A dormant shell that was never formally dissolved keeps racking up tax, penalties, and interest the same as an active company.²

Stock corporations, public or private, file by March 1 and pay a minimum of $175 and a maximum of $200,000, calculated under one of the two methods below.³

Non-stock corporations also file by March 1. Those that qualify as exempt (generally nonprofits organized for charitable, religious, or educational purposes) owe no tax but still have to file the report.¹ Non-exempt non-stock corporations pay a flat $175.³

Foreign corporations (those formed elsewhere but registered to do business in Delaware) do not share the March 1 date. Their annual report is due by June 30, with a $125 filing fee and a $125 late penalty if missed.⁴

One important boundary: Delaware LLCs, limited partnerships, and general partnerships do not file this annual report at all. They owe a separate flat $300 annual tax due June 1, with the same $200 penalty and 1.5% monthly interest if late.⁵ If that’s your entity, the rest of this page doesn’t apply to you.

What the Report Has to Include

Filing is done online through the Division of Corporations portal.⁴ A domestic corporation’s report must list current officers and directors, the principal place of business, and a description of the nature of the business, meaning how the company generates revenue.

If you want the option to calculate tax under the Assumed Par Value Capital Method (described below), the report also needs your total gross assets (as shown on federal Form 1120, Schedule L, where applicable) and the number of issued shares for each class of stock. Leave those fields blank and the state defaults to the Authorized Shares Method, which for most venture-backed companies produces a much larger bill.

How the Tax Is Calculated

There are two calculation methods. Run both, then pay the lower one.

Authorized Shares Method

This method looks only at the number of shares your charter authorizes, not how many are outstanding:³

5,000 shares or fewer: $175 (the minimum)
5,001 to 10,000 shares: $250
Over 10,000 shares: $250 plus $85 for each additional 10,000 shares or portion thereof

Maximum tax under this method is $200,000. A corporation authorized to issue 10 million shares (a common setup for a venture-backed startup) would owe roughly $170,000 under this method alone.

Assumed Par Value Capital Method

This one accounts for issued shares and assets, so companies with high authorized counts but modest size tend to pay far less. Three steps:

Divide total gross assets by total issued shares (all classes) to get an assumed par value per share.
Multiply that assumed par value by the total authorized shares to get the assumed par value capital.
Apply $400 per $1 million (or any fraction of a million) of assumed par value capital.

Minimum is $400, maximum is $200,000.³ A corporation with 10 million authorized shares, 1 million issued, and $2 million in gross assets pays dramatically less here than under the Authorized Shares default. If your initial bill from the state looks large, this is the first thing to check.

Quarterly Estimates for Larger Bills

A single March 1 payment only applies if your tax runs under $5,000. Any corporation whose annual franchise tax is $5,000 or more has to pay in quarterly installments across the year, front-loaded:

June 1: 40% of the estimated annual tax
September 1: 20%
December 1: 20%
March 1: remaining balance

Estimates are based on the prior year’s total tax.⁶ Missing any of those dates triggers the same penalty and interest as missing the annual filing. Overpayments get reconciled when you file the full report.

Penalties, Good Standing, and Charter Loss

A missed March 1 filing produces a flat $200 penalty, and interest accrues at 1.5% per month on the unpaid balance, including on the penalty itself.¹ A single day late is a $200 day.

A delinquent corporation is also flagged as not in good standing by the Division of Corporations. Any certificate of good standing you request will come back showing the problem, which can block bank account openings, financing closings, and merger transactions.

Letting it slide longer is worse. On or before June 30 each year, the Secretary of State reports every corporation that failed to pay or file for the prior year, and the Governor issues a proclamation revoking those charters.⁷ A revoked corporation no longer legally exists. It cannot sue, contract, or operate. Reinstatement requires paying every year of back taxes, every annual $200 penalty, all accumulated interest, and a reinstatement fee before the state restores the charter.

Fixing a Report You Already Filed

If you find an error (wrong asset figure, wrong share count, outdated officer or director information) you can submit an amendment to the Division of Corporations. If the correction increases what you owe, pay the extra right away; interest runs from the original due date, so delay is expensive.

If the correction means you overpaid, you have to petition the Secretary of State for a refund no later than March 1 of the second calendar year following the tax year in question.² So an overpayment on your 2025 report has to be claimed by March 1, 2027. After that, the refund is gone.

1
Delaware Division of Revenue. Delaware Annual Franchise Tax Report
2
Delaware Code Online. Delaware Code Title 8 – Corporation Franchise Tax
3
Delaware Division of Corporations. How to Calculate Franchise Taxes
4
Delaware Division of Corporations. Annual Report and Tax Instructions
5
Delaware Division of Corporations. Delaware Division of Corporations – LLC/LP/GP Franchise Tax Instructions
6
Delaware Division of Corporations. Annual Report and Tax Information
7
Justia Law. Delaware Code Title 8 – 511 Repeal of Charters