Delaware ~ Franchise Tax: Bill Increasing Franchise Taxes Sent to Governor

CCH Tax Day Report

The Delaware General Assembly has approved legislation that would increase the maximum corporation franchise tax computed using either the authorized shares method or the assumed capital value from $180,000 to $200,000 each taxable year. Certain large, publicly-traded corporations identified by the Secretary of State would be required to pay a maximum tax of $250,000. Under the legislation, the minimum tax computed using the assumed capital value method would increase from $350 to $400. These franchise tax changes would be effective retroactively to January 1, 2017. The franchise tax rate for corporations with more than 10,000 authorized shares would also increase from $75 to $85 for each additional 10,000 shares or portion of that amount. The tax rate computed using the assumed capital value method for corporations with more than $1 million in assumed capital value would increase from $75 to $85 for each additional $1 million of assumed capital value or portion of that amount. Finally, the assumed par value multiplier would increase from $350 to $400. The rate and multiplier changes would take effect beginning January 1, 2018.

H.B. 175, as passed by the Delaware House on May 18, 2017 and by the Delaware Senate on June 15, 2017

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