Delaware Franchise Tax: Authorized Shares Method Explained
17 October 2026 · Informational only · No affiliate links · 3 min read
General information, not tax, legal or financial advice. We are not the State of Delaware and are not affiliated with it. Check corp.delaware.gov or ask a qualified professional. Sources read on October 17, 2026 (passages cited). Dates after 2026 are expected; the amounts shown are the current rates on the State pages, not confirmed 2027 rates. Examples use made-up numbers. This page contains no affiliate links.
Short answer: under the authorized shares method on the State's calculator page, a corporation with 5,000 or fewer authorized shares pays $175; with 5,001 to 10,000 it pays $250; and for each additional 10,000 shares or portion thereof it adds $85. The State's own examples: 10,005 shares gives $335, and 100,000 shares gives $1,015. The maximum is $200,000 ($250,000 for a Large Corporate Filer).
Table (current rates)
| Authorized shares | Tax |
|---|---|
| 5,000 or fewer | $175 |
| 5,001 to 10,000 | $250 |
| Each additional 10,000 or portion | + $85 |
How the arithmetic works
Start at $250 for the first 10,000 shares and add $85 for each further block of 10,000 shares or part of a block. Check: 10,005 shares is one extra block, so $250 + $85 = $335. For 100,000 shares: nine extra blocks, so $250 + 9 × $85 = $1,015, matching the State's example.
When this method applies
- By choice: you compute both methods and use the one that gives the lower tax (§503(a)); see assumed par value.
- By default: if you do not report issued shares and total gross assets, the tax is computed on the authorized shares method (§503(b)). This default can produce a very large figure for a start-up with many authorized shares: see the 10 million share example.
Example (made-up numbers)
A company with 8,000 authorized shares owes $250 on this method. Another with 25,000 has 2 extra blocks (10,001-20,000 and 20,001-25,000 in part): $250 + 2 × $85 = $420.
Related
Due date. The State offers an official calculator on corp.delaware.gov; use it for your filing. This page is an explanation, not a calculator.
FAQ
Does a proration apply if shares change during the year? The State's calculator page mentions proration (days / 365) after a capital amendment; we did not read the details.
What we could not verify
- How proration applies to a mid-year change of authorized shares (mentioned on the State page; details not read).
- 2027 rates: the State pages do not date amounts by year, so everything here is described as current rates; recheck on corp.delaware.gov.
- Any extension or grace period for the March 1 deadline: none was found in the sources read. 8 Del. C. §510 mentions further time for good cause, which is exceptional.
- Registered agent prices and comparisons: not researched here (no official source).
- LLC and limited partnership tax: only the June 1 due date is mentioned; we give no amount because the State's own pages were inconsistent. Check corp.delaware.gov.
Sources (official)
- Delaware Division of Corporations, Franchise tax calculator (read October 17, 2026)
- Delaware Division of Corporations, Pay taxes (read October 17, 2026)
- Delaware Code, Title 8, Chapter 5 (8 Del. C. §§ 502-514, statute text read) (read October 17, 2026)