AAFCPAs would like to make clients aware that all companies incorporated in the state of Delaware are required to file an annual report and pay an annual franchise tax to Delaware each year by March 1st.
We have outlined for your convenience two methods of calculating the franchise tax you owe:
the authorized shares method, which is based on the number of authorized shares your company has; or
the assumed par value method, which is based on the value of your company’s assets.
You are only required to pay the lesser of the two, so these calculations are crucial to limiting your tax liability. The maximum annual tax is $250K for “large corporate filers” who have consolidated gross revenue or consolidated assets between $250M and $750M and $200K for the rest.
If you have any questions or need help with these often complex calculations, please contact Kelly Zack, MST at kzack@nullaafcpa.com, 774.512.4001; or your AAFCPAs Partner.
Kelly is a senior leader in AAFCPAs’ State and Local Tax (SALT) practice. She advises individuals, partnerships, corporations, nonprofits, and trusts with multistate operations on strategic tax planning and risk mitigation. Her work includes uncovering location-specific tax savings opportunities and structuring clients’ activities to align with complex and evolving SALT regulations. Kelly identifies incentives and credits available at the state and municipal levels and helps clients navigate jurisdictional requirements that may affect both entities and …
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