Delaware franchise tax: due date, amount, and who files it

The due date: March 1, every year

Delaware franchise tax is due on or before March 1 of each year. There is no grace period and no extension for the tax itself. The annual report for your Delaware corporation is filed at the same time, through the same portal at corp.delaware.gov, so in practice the two are one annual exercise. We track them as a single item on our Delaware franchise tax filing page, and the date is the same every year, which makes it one of the most predictable items on any compliance calendar.

The tax applies to every Delaware corporation, whether or not it does business in Delaware. That is the point of the tax: Delaware collects a franchise tax from the enormous number of companies that incorporate in the state for its business-friendly law and courts but operate elsewhere. An LLC formed in Delaware does not owe the franchise tax; it pays a flat annual tax instead. Only corporations are subject to the share-based franchise tax.

How the amount is calculated

Delaware gives you a choice between two methods, and you pay the lower of the two:

• Authorized shares method: based on your number of authorized shares. A company with 5,000 or fewer shares pays the $175 minimum. The cost scales with share count up to a $250,000 cap.
• Assumed par value capital method: based on your total gross assets and issued shares. This is often cheaper for companies with many authorized shares but modest assets, because it rewards companies that keep gross assets low.

The minimum franchise tax is $175 regardless of method. Most startups pay exactly that, because the authorized-shares method for a company with 5,000 or fewer shares lands at the minimum. The moment a company authorizes ten million shares for a venture round, the share count pushes the tax well above the minimum, which is when comparing the two methods becomes worth the calculation. See the franchise tax page for the prep checklist.

The two parts of the filing

The March 1 obligation has two components filed together. The first is the annual report, which confirms the company's name, registered agent, directors, and officers. The second is the franchise tax payment itself, calculated by the method you choose. If your corporation is no longer doing business, you may still owe a "past due" fee of $50 on top of the $50 annual report fee, so an inactive company is not automatically off the hook. Closing a Delaware corporation properly requires a Certificate of Dissolution, not simply stopping payment.

Who actually files it

In practice this is a registered-agent filing. Your Delaware registered agent (CSC, CT Corporation, Harbor Compliance, Northwest Registered Agent, or another commercial agent) files the annual report and franchise tax on your behalf and bills you for the tax plus their service fee. There is no public submission API for the Delaware Division of Corporations, so the filing itself is done through the state portal or by an agent, not through a legal-ops tool. The value a tool adds is on the edges: the calendar reminder, the prep with entity details pre-filled, the comparison of the two tax methods, and the handoff record that shows who filed what and when.

The handoff matters more than it sounds. When you rely on an agent to file, you are trusting a third party with a hard March 1 deadline and no extension. If the agent misses it, the company pays the penalty and your good standing is the collateral. Recording the handoff as an event on the filing, with the agent named and the reference noted, gives you the paper trail to hold someone accountable if the filing goes sideways.

What happens if you miss it

Failure to pay by March 1 accrues a $200 penalty plus 1.5% interest per month on the tax due. Continued non-payment leads to loss of good standing with the Division of Corporations, and ultimately the state can administratively dissolve the corporation. Administrative dissolution is a real and common outcome for abandoned Delaware entities, and it has consequences beyond the franchise tax: a dissolved corporation cannot enter contracts, defend itself in court, or hold title to property in its name. Reinstatement is possible but requires paying all back taxes, penalties, and interest, plus a reinstatement fee.

The monthly interest compounds, so a company that discovers the problem three months after the deadline faces the $200 penalty plus accumulated interest on top of the tax that was always due. Unlike many state taxes, there is no forgiveness mechanism for a first offense. The Division of Corporations simply tracks the delinquency until the account is settled or the company is dissolved.

Comparing to other states

Delaware is not the only state with an annual corporation obligation, but its franchise tax is distinctive because it applies to out-of-state companies that incorporated in Delaware for legal reasons. Other states charge annual reports based on a company's activity within the state, or franchise taxes keyed to income. California, for example, levies its own $800 minimum franchise tax on corporations and LLCs doing business in the state. A company can owe Delaware franchise tax and a home-state annual report at the same time, which is why multi-state companies track each jurisdiction separately. The US compliance catalog keeps each state's annual report as its own filing so the deadlines do not collapse into one generic reminder.

Keep it on the calendar

Because it is annual, fixed, and non-extendable, Delaware franchise tax is the exact kind of filing that belongs on a calendar you actually check. LawDep tracks it, the annual report, and the agent handoff as one rolling item, rolls the March 1 date forward automatically, and compares the two calculation methods in the prep pack. Generate a free compliance calendar to see your Delaware and other state deadlines in one view, and hand off the filing itself to your registered agent with a one-click record.

General information, not legal or tax advice. Review the Delaware Division of Corporations rules with your counsel.