Franchise Tax Filing

Franchise Tax Filing — Don't Let This Catch You Off Guard

Franchise tax is a fee charged by states for the privilege of doing business in that state. Unlike income tax, franchise tax is not based on profit — your company may owe franchise tax even if it had zero revenue during the year.

Delaware is well-known for its franchise tax, which can be unexpectedly high for some companies if not calculated correctly. USBase ensures your franchise tax is calculated using the most favorable method and filed on time.

States Where We File Franchise Tax

• Delaware: Annual franchise tax due March 1st — can range from to thousands
• Texas: Annual franchise tax return for most business entities
• California: Minimum annual franchise tax for LLCs
• New York: Franchise tax based on capital and income
• All other applicable states

Delaware Franchise Tax — Special Considerations

• Two calculation methods: Authorized Shares Method vs. Assumed Par Value Capital Method
• The Assumed Par Value method almost always results in a significantly lower tax
• USBase always uses the most favorable calculation method for your company
• We file Form 1096 or the Delaware online system on your behalf

Why Franchise Tax Surprises Happen

Many business owners are surprised to learn their Delaware LLC or corporation owes thousands in franchise tax. This happens because the default calculation method used by the state results in inflated amounts. USBase uses the correct method to minimize your tax obligation legally, and we file before the March 1st deadline.