Delaware franchise tax is the yearly fee a company pays the State of Delaware to stay in good standing. It is owed whether or not the company earned anything or did any business during the year, and it has nothing to do with income tax or with the IRS.
| LLC, LP or GP | Corporation | |
|---|---|---|
| What is due | LLC: annual tax of $400 | Corporation: annual report and franchise tax |
| Due date | LLC: June 1, for the previous year | Corporation: March 1, for the previous year |
| Annual report | LLC: not required | Corporation: required, filed online; filing fee $50 ($25 for exempt corporations) |
| Amount | LLC: the same for every company | Corporation: minimum $175 by the authorized shares method, or $400 by the assumed par value capital method; maximum $200,000 |
| Late penalty | LLC: $200, plus 1.5% interest per month | Corporation: $200, plus 1.5% interest per month |
How to Pay
Both are paid online on the Delaware Division of Corporations website with the company's file number. Payments above $5,000 must be made by ACH debit; below that a credit card is accepted.
How the Corporation Tax Is Calculated
A corporation may use either of two methods and pay the lower result. The authorized shares method looks only at the number of shares the company is allowed to issue: 5,000 shares or fewer costs the $175 minimum. The assumed par value capital method uses issued shares and total gross assets, and often gives a much lower figure for a start-up that authorized millions of shares. The figure the state shows first is usually the authorized shares result, which is why new founders are sometimes surprised by a large bill.
If You Do Not Pay
The penalty and interest are added, the company loses good standing, and after a longer period the state cancels an LLC or voids a corporation's charter. See non-payment of Delaware franchise tax and the consequences.
Franchise Tax and Your EIN
Franchise tax is a state matter and the EIN is a federal one: paying one does not cover the other. A Delaware company still needs its EIN for a bank account and for federal filings. See the Delaware EIN application.
Source: Delaware Division of Corporations, LLC/LP/GP franchise tax instructions; Delaware Division of Corporations, Annual report and tax instructions. Checked October 2026.
