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Delaware Franchise Tax

What is Delaware Franchise Tax?

The Delaware Franchise Tax is a fee that businesses incorporated in Delaware need to pay. Franchise is not a reference to a business owned by a franchisee. Many startups and large corporations are incorporated as C corporations in Delaware and pay the Delaware Franchise Tax quarterly or annually.

Your corporation’s Delaware Franchise Tax will be calculated when you file your Delaware annual report with the Delaware Secretary of State, which is due by March 1 every year. If you expect to owe at least $5,000, you should pay estimated taxes quarterly. 

There are two methods for calculating your Delaware Franchise Tax, the Authorized Share method ($175 minimum) and the Assumed Par Value Capital method ($400 minimum). You can use whichever method leads to paying less, and may want to consult with your tax provider if you’re unsure.

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