Calculate your estimated Delaware Franchise Tax based on either authorized shares or assumed par value capital stock.
Estimated Delaware Franchise Tax:
$0.00
Understanding Delaware Franchise Tax Calculation
Delaware imposes a franchise tax on corporations chartered in the state. This tax is crucial for businesses incorporated in Delaware, regardless of where they operate. The calculation method can be complex, as Delaware offers two primary ways to determine your tax liability: the Authorized Shares method and the Assumed Par Value Capital Stock method. Our calculator helps estimate this tax, but it's essential to understand the underlying principles.
Authorized Shares Method
This method is generally simpler and often results in a lower tax liability for companies with a high number of authorized shares but a lower actual asset value. The tax is calculated based on the number of authorized shares of stock. There are different tax brackets and rates depending on the number of shares:
Up to 20,000,000 shares: $175
More than 20,000,000 shares: $175 plus an additional $50 for each additional 10,000,000 shares or portion thereof.
For corporations with no par value stock, the number of authorized shares is used directly. If par value is assigned, the calculation is based on the number of authorized shares, but the tax cannot exceed the amount calculated using the Assumed Par Value Capital Stock Method.
Assumed Par Value Capital Stock Method
This method calculates the tax based on the number of authorized shares multiplied by an assumed par value, or the actual par value if it's higher, and then relates this to the corporation's total gross assets. The tax liability is determined by the following schedule, based on the number of shares issued and the total gross assets:
$100,000,000 or less in Gross Assets:
Up to 20,000,000 shares: $175
More than 20,000,000 shares: $175 + $50 for each additional 10,000,000 shares or portion thereof.
More than $100,000,000 in Gross Assets:
Tax is calculated based on a formula considering both shares and assets. The minimum tax is $175, and the maximum is $200,000.
For the purpose of this calculation, we often use the statutory rates provided by the Delaware Division of Corporations for this method. A common simplified approach for many corporations with significant assets involves the following tiers:
20,000,001 to 50,000,000 shares: $550
50,000,001 to 100,000,000 shares: $750
100,000,001 to 200,000,000 shares: $1,000
And so on, with increasing rates for higher share counts and asset values.
Important Note: The Delaware Division of Corporations provides specific tables and formulas for the Assumed Par Value Capital Stock Method, especially for companies with over $100 million in gross assets. This calculator provides an estimate based on common scenarios and simplified interpretations. It is highly recommended to consult the official Delaware Division of Corporations website or a tax professional for precise calculations, especially for complex cases or when dealing with very large asset values.
Minimum Tax
The minimum franchise tax for any Delaware corporation is $175.
Disclaimer
This calculator is for informational purposes only and does not constitute tax advice. Tax laws are subject to change. Always consult with a qualified tax professional or refer to official Delaware Division of Corporations resources for the most accurate and up-to-date information regarding your specific tax obligations.
function calculateDelawareFranchiseTax() {
var sharesAuthorizedInput = document.getElementById("sharesAuthorized");
var parValueInput = document.getElementById("parValue");
var totalAssetsInput = document.getElementById("totalAssets");
var resultValueSpan = document.getElementById("result-value");
var sharesAuthorized = parseFloat(sharesAuthorizedInput.value);
var parValue = parseFloat(parValueInput.value);
var totalAssets = parseFloat(totalAssetsInput.value);
var tax = 0;
var calculatedShares = 0;
var calculatedParValue = 0;
var assumedCapitalStock = 0;
// — Method 1: Authorized Shares —
var taxBasedOnShares = 0;
if (!isNaN(sharesAuthorized) && sharesAuthorized > 0) {
if (sharesAuthorized 0) {
// Simplified Tiers for Assumed Par Value – This is a crucial part where precise tables are needed.
// The official calculation for Assumed Par Value Capital Stock method can be complex,
// especially with high asset values. We use a common simplified structure.
// Determine the number of shares to consider for tax, based on authorized shares and par value.
// If par value is provided, calculate the capital stock. If not, Delaware often assumes a $0.01 par value for calculation purposes if no par value is stated.
// However, the most accurate way requires knowing if par value is explicitly stated or if it's no-par stock.
// For this calculator, we'll use the provided parValue if valid, otherwise, we'll try to estimate for the sake of providing an output.
// A common scenario for no-par stock calculation involves assuming a par value for tax purposes.
// Let's prioritize using the input 'parValue' if provided and valid.
if (!isNaN(parValue) && parValue > 0) {
calculatedParValue = parValue;
} else {
// If no par value is provided, Delaware uses a statutory calculation.
// For general estimation, we might assume a common value like $0.01 or $0.0001,
// but the exact rule for "no par value" stock can be nuanced and depends on state filings.
// Let's use $0.01 as a common placeholder if parValue is missing or invalid, but flag this uncertainty.
calculatedParValue = 0.01;
console.warn("Par value not provided or invalid. Using $0.01 for assumed par value calculation. This may affect accuracy.");
}
// Calculate Assumed Capital Stock
// The total assumed capital stock is the number of authorized shares multiplied by the assumed par value.
// However, Delaware tax rules are based on *issued* shares and capital stock, not just authorized.
// Since we don't have issued shares, we'll use authorized shares * assumed par value as a proxy for potential capital.
// Then, we relate this to total gross assets.
var grossAssetsThreshold = 100000000; // $100 million
if (totalAssets <= grossAssetsThreshold) {
// For up to 20,000,000 shares, tax is $175
// For over 20,000,000 shares, tax is $175 + $50 per additional 10M shares
if (sharesAuthorized $100M, based on shares:
if (sharesAuthorized <= 20000000) {
taxBasedOnAssumedPar = 175; // Minimum tax
} else if (sharesAuthorized <= 50000000) { // 20M to 50M shares
taxBasedOnAssumedPar = 550;
} else if (sharesAuthorized <= 100000000) { // 50M to 100M shares
taxBasedOnAssumedPar = 750;
} else if (sharesAuthorized <= 200000000) { // 100M to 200M shares
taxBasedOnAssumedPar = 1000;
} else if (sharesAuthorized <= 300000000) { // 200M to 300M shares
taxBasedOnAssumedPar = 1250;
} else if (sharesAuthorized <= 400000000) { // 300M to 400M shares
taxBasedOnAssumedPar = 1500;
} else if (sharesAuthorized <= 500000000) { // 400M to 500M shares
taxBasedOnAssumedPar = 1750;
} else if (sharesAuthorized 200000) {
taxBasedOnAssumedPar = 200000;
}
}
}
} else {
// If total assets are not provided or invalid, we can't reliably use the Assumed Par Value method.
// In this case, we fall back to the Authorized Shares method, ensuring the minimum tax.
taxBasedOnAssumedPar = Infinity; // Effectively disable this method if assets are missing
console.warn("Total Gross Assets are required for the Assumed Par Value Capital Stock method. Calculation might be incomplete.");
}
// — Determine the Final Tax —
// Delaware requires corporations to pay the GREATER of the tax calculated by the Authorized Shares Method OR the Assumed Par Value Capital Stock Method.
// Ensure minimum tax of $175 is always considered.
var effectiveTax = Math.max(taxBasedOnShares, taxBasedOnAssumedPar);
// Apply minimum tax if the calculation somehow results in less (shouldn't happen with current logic, but good practice)
if (effectiveTax < 175) {
effectiveTax = 175;
}
tax = effectiveTax;
// Format the result
resultValueSpan.textContent = "$" + tax.toFixed(2);
}
// Initial calculation on page load to show minimum tax
document.addEventListener("DOMContentLoaded", function() {
// Set initial values to trigger calculation on load
document.getElementById("sharesAuthorized").value = "10000000"; // Example value
document.getElementById("totalAssets").value = "5000000"; // Example value
calculateDelawareFranchiseTax();
});