I got a $50K Delaware franchise tax bill but only had to pay $450. Here's how I saved $50K on taxes—plus a step-by-step guide to filing your Delaware franchise tax report.

Received a Delaware franchise tax bill for your startup that seems too high? 

Don’t panic. Delaware typically uses a calculation method that results in higher taxes.

It’s called the “Authorized Share Method” and here is how it works: 

Franchise taxes are calculated based on the number of shares authorized in your charter. For example, a company with 10,000,000 shares might owe $85,165.

Alternatively, you can calculate taxes using the “Assumed Par Value Method”. You divide the company's gross assets by its issued and outstanding shares. Use the figures from the U.S. Form 1120, Schedule L, or a recent balance sheet.

Most startups benefit from using the Assumed Par Value method, which ties tax to total assets. Just ensure that your issued shares are at least one-third to half of your authorized shares to avoid high taxes. This method usually works best for startups.

Find our FREE Delaware franchise tax calculator here.

✅ How to File Delaware Franchise Tax for Delaware Corporations

Deadline:
March 1 every year — required for all Delaware corporations, even if you had no revenue.

🧾 Step-by-Step Filing Guide:

1. Go to the official Delaware filing portal:
   👉 https://corp.delaware.gov/paytaxes/
   ‍
2. Click “Franchise Taxes” → “Pay Taxes/File Annual Report.”
   ‍
3. Enter your 7-digit Delaware file number:
   Look it up here:
   👉 https://icis.corp.delaware.gov/ecorp/entitysearch/namesearch.aspx
   ‍
4. Choose your tax calculation method:
   Delaware offers two methods:
   • Authorized Shares Method (default, usually more expensive for startups)
   • Assumed Par Value Capital Method (💡 recommended for most startups)
   To use the Assumed Par Value Capital Method, you’ll need:
   • ✅ Total Gross Assets (from IRS Form 1120, Schedule L, Line 15, Column (d))
   • ✅ Total Issued Shares (number of shares actually issued—not just authorized)
     ‍
5. Complete the Annual Report:
   • Company’s physical address
   • Names and addresses of officers and at least one director
   • Federal EIN (if available)
     ‍
6. Pay the Tax + $50 Filing Fee:
   • Minimum tax: $400 if using Par Value Method
   • Payment accepted via credit card or ACH

🏷️ What If You're a Delaware LLC? (It’s Different.)

If your company is a Delaware LLC, the process is much simpler:

• No Annual Report required
• Flat annual Franchise Tax = $300
• Due June 1
• No calculation methods involved
• File and pay here:
  👉 https://corp.delaware.gov/paytaxes/