Delaware Franchise Tax Calculations
INFO: http://corp.delaware.gov/frtaxcalc.shtml
Calculator: http://corp.delaware.gov/taxcalc.shtml
HOW TO CALCULATE FRANCHISE TAXES
Effective August 1, 2010, a domestic stock or non-stock for profit corporation incorporated in the State of Delaware is required to pay annual franchise tax. The minimum tax is $75.00 for corporations using the Authorized Shares method and a minimum tax of $350.00 for corporations using the Assumed Par Value Capital Method. All corporations using either method will have a maximum tax of $180,000.00. Corporations owing $5,000.00 or more make estimated payments with 40% due June 1st, 20% due by September 1st, 20% due by December 1st, and the remainder due March 1st.
The Annual Franchise Tax assesment is based on the authorized shares. Use the method that results in the lesser tax. The total tax will never be less than $75.00 or more than $180,000.00.
Non-Stock for Profit
All non-stock, for profit entities that do not comply with the Exempt Corporation requirements will be required to pay a Franchise Tax of $75.00 effection August 1, 2010.
Authorized Shares Method
For corporations having no par value stock the authorized shares method will always result in the lesser tax.
- 5,000 shares or less (minimum tax) $75.00
- 5,001 – 10,000 shares – $150.00
- each additional 10,000 shares or portion thereof add $75.00
- maximum annual tax is $180,000.00
For Example
A corporation with 10,005 shares authorized pays $225.00 ($150.00 plus $75.00)
A corporation with 100,000 shares authorized pays $825.00 ($150.00 plus $675.00[$75.00 x 9])
Assumed Par Value Capital Method
To use this method, you must give figures for all issued shares (including treasury shares) and total gross assets in the spaces provided in your Annual Franchise Tax Report. Total Gross Assets shall be those “total assets” reported on the U.S. Form 1120, Schedule L (Federal Return) relative to the company’s fiscal year ending the calendar year of the report. The tax rate under this method is $350.00 per million or portion of a million. If the assumed par value capital is less than $1,000,000, the tax is calculated by dividing the assumed par value capital by $1,000,000 then multiplying that result by $350.00.
