How to File and Pay Delaware Franchise Tax Online

To file and pay Delaware franchise tax online, log into the Division of Corporations’ franchise tax portal with your Delaware file number, review and update the pre-populated entity information, enter your authorized shares, issued shares, and total gross assets so the system can calculate the tax under both allowed methods, and submit payment by credit card or ACH. Corporations file an annual report along with the tax by March 1; LLCs and limited partnerships pay a flat $300 by June 1 with no annual report.

Know Your Deadline Before You Start

The due date depends on your entity type, and the state will not extend it based on whether you received a notice.

Domestic corporations: annual report and franchise tax due on or before March 1 for the prior tax year.¹
LLCs and limited partnerships: $300 flat tax due on or before June 1.¹
Foreign corporations registered to do business in Delaware: annual report and $125 filing fee due on or before June 30.²

The state mails franchise tax notices to your registered agent each December. If one does not reach you, ask your agent for a copy. The filing obligation stands either way.³

What to Gather Before You Log In

Pulling these together first will save you from stopping mid-filing to hunt down documents:

Your Delaware File Number. You can look it up by searching your entity’s legal name on the Division of Corporations website.⁴
Authorized shares and their par value, as stated in your certificate of incorporation.
Issued shares, including treasury shares. You need this to use the Assumed Par Value Capital Method.
Total gross assets, taken from the “total assets” figure on U.S. Form 1120, Schedule L, for the fiscal year ending in the calendar year of the report. Consolidated filers may need to submit consolidating balance sheets.³
Names and addresses of all current directors, plus the name and address of the officer who will sign the report.¹

Confirm your authorized share count matches what the state has on file. If your share structure changed during the year and the corresponding amendment was never filed, the annual report will not go through until the amendment is on record.

Filing and Paying Step by Step

Everything happens through the Division of Corporations’ online portal. The process looks like this:

Open the franchise tax filing page and enter your file number. The system loads your corporation’s record with several fields already populated.
Review the pre-filled information. Correct the registered office, update directors and officers, and verify authorized shares. Changes during the year must be reflected here.
Enter your financial data. Input total gross assets and issued shares (including treasury shares) into the correct fields. Skipping these causes the system to default to the Authorized Shares Method, which for most corporations with large share counts produces a much higher bill.⁵
Let the built-in calculator show both methods. The portal computes the Authorized Shares and Assumed Par Value Capital figures side by side so you can confirm the lower result.
Pay the tax plus the applicable filing fee. Non-exempt domestic corporations owe a $50 annual report filing fee on top of the franchise tax; exempt corporations pay a $25 filing fee instead. Payment is by credit card or ACH bank transfer.⁶
Save the filing confirmation. It is your official receipt and is often requested by banks, lenders, or auditors as proof of good standing.

LLCs and limited partnerships do not file an annual report. The portal simply collects the flat $300 payment (plus $75 per registered series, if applicable).⁷

Make Sure You Pay Under the Cheaper Method

For corporations, picking the right calculation method is the single decision that most affects your bill. Delaware lets you pay whichever of two methods produces the lower amount.⁸

Authorized Shares Method

This method looks only at how many shares your corporation is authorized to issue, not how many are actually issued:

5,000 shares or fewer: $175 (the minimum).
5,001 to 10,000 shares: $250.
Each additional 10,000 shares or portion thereof: add $85.

A corporation authorized to issue 100,000 shares owes $1,015 under this method.⁵ Startups that set a ceiling of several million shares can see tax bills in the tens of thousands under this calculation alone.

Assumed Par Value Capital Method

This method factors in your gross assets as well as your authorized and issued shares. The system divides total gross assets by issued shares to produce an assumed par value, multiplies that by authorized shares to get your assumed par value capital, and taxes that figure at $175 for the first $500,000, $250 up to $1,000,000, and $85 for each additional $1,000,000 or fraction. The minimum tax under this method is $400.⁸

A startup authorized to issue 10 million shares but holding only modest assets might owe $200,000 under the Authorized Shares Method and just a few hundred dollars under the Assumed Par Value Capital Method. One exception: corporations with no-par-value stock always owe less under the Authorized Shares Method, so running the alternative does not help them.⁵

Under either method, the annual maximum for most corporations is $200,000. Large Corporate Filers designated by the state face a maximum of $250,000, and the state notifies corporations that fall into that category.⁵⁹

What Happens if You File Late

A missed deadline triggers a $200 penalty immediately, plus interest at 1.5% per month on the unpaid tax and penalty until paid in full. This applies to domestic corporations, LLCs, and limited partnerships.¹¹⁰ Foreign corporations face a different structure: a $125 late fee is added to the $125 filing fee if the annual report is not received by June 30.²

The charges compound. A corporation that owes $5,000 and files six months late owes the $5,000 plus the $200 penalty plus roughly $468 in interest, nearly 10% more than the original bill.

A full year of nonpayment carries a bigger consequence. If a corporation fails to pay its tax or file a complete annual report for a full year, the state declares its charter void and all corporate powers become inoperative. The entity can no longer legally conduct business, enter contracts, or maintain lawsuits.¹¹ Reviving a voided charter is possible but costs more than filing on time: back taxes, accumulated penalties and interest, and a $189 revival filing fee for domestic corporations ($220 for LLCs).¹²

Deducting the Payment on Your Federal Return

Corporations filing Form 1120 can generally deduct state franchise taxes as a business expense on Line 17 (Taxes and Licenses). The IRS instructions list specific taxes that cannot be deducted, and state franchise taxes are not among them.¹³ Your Delaware payment generally reduces federal taxable income for the year it is paid or accrued, so hold on to the portal confirmation when you hand records to your tax preparer.

1
Delaware Division of Corporations. Frequently Asked Questions
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Delaware Division of Corporations. Annual Report and Tax Instructions
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Delaware Division of Corporations. Frequently Asked Tax Questions
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State of Delaware. Field Descriptions
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Delaware Division of Corporations. How to Calculate Franchise Taxes
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Delaware Division of Corporations. Annual Report and Tax Information
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Delaware Code Online. Delaware Limited Liability Company Act – Subchapter XI
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Justia Law. Delaware Code Title 8 – Section 503 – Rates and Computation of Franchise Tax
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Delaware Division of Revenue. Franchise Taxes
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Delaware Code Online. Delaware Code Title 8 Chapter 5 – Corporation Franchise Tax
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Delaware Code Online. Delaware Code Title 8 Chapter 5 – Corporation Franchise Tax
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Delaware Department of State. Division of Corporations Fee Schedule
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IRS. Instructions for Form 1120 – U.S. Corporation Income Tax Return