Franchise Tax Calculator

For corporations calculating state franchise taxes based on net worth or capital

Estimate your state franchise tax liability based on net worth, authorized shares, or revenue depending on state requirements. Includes specialized calculations for Delaware, Texas, and Oregon.

Calculate Your Results

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Franchise Tax Results

Effective Franchise Tax Rate

8.5165%

Franchise Tax Owed

$85.2K

Franchise Tax by State

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Formula

Standard: Tax = (Net Worth ÷ 1000) × Rate per $1,000; Delaware Assumed Par: Tax = (Authorized Shares × (Gross Assets ÷ Issued Shares)) ÷ 1,000,000 × $400

Calculates franchise tax using state-specific methods. Most states use net worth multiplied by a rate per $1,000. Delaware offers two methods: Authorized Shares or Assumed Par Value Capital. Texas uses a margin tax on revenue.

Variables

  • •Net Worth(USD)—Corporate net worth, capital stock, or paid-in capital
  • •Authorized Shares(shares)—Total shares corporation is authorized to issue (Delaware)
  • •Issued Shares(shares)—Shares actually issued to shareholders (Delaware)
  • •Gross Assets(USD)—Total gross assets from federal tax return (Delaware)
  • •Revenue(USD)—Total annual revenue (Texas margin tax)

Assumptions

  • •Uses 2024-2025 state franchise tax rates
  • •Delaware minimum tax of $175, maximum of $200,000
  • •Texas no-tax threshold of $2,470,000 annual revenue
  • •Oregon minimum tax based on Oregon sales tiers

Sources

Limitations

  • •State-specific exemptions may reduce actual liability
  • •Minimum and maximum caps vary by state
  • •Some states have phase-out schedules for franchise taxes
  • •Consult state-specific guidance for complex structures

Tips for Accurate Results

  • •Delaware corporations should compare both calculation methods to minimize tax
  • •Texas margin tax has a $2.47M revenue exemption threshold
  • •Some states have minimum and maximum caps regardless of net worth
  • •Franchise tax is separate from income tax in most states

How to Use the Franchise Tax Calculator

  1. 1Select your state of incorporation
  2. 2Enter net worth, capital, or revenue as required by your state
  3. 3For Delaware, compare Authorized Shares vs Assumed Par Value methods
  4. 4For Texas, enter total revenue and select business type
  5. 5Review your estimated franchise tax and effective rate

Why Franchise Tax Planning Matters

Franchise taxes are charged for the privilege of doing business in a state, regardless of profitability. Unlike income taxes, franchise taxes can create liability even when your company has no net income.

Delaware is popular for incorporation but has complex franchise tax rules. Using the Assumed Par Value Capital method instead of Authorized Shares method can save thousands of dollars annually for many companies.

State franchise tax structures vary widely - some use flat minimums, others use tiered rates based on net worth or capital. Understanding your state's specific rules is essential for accurate financial planning.

Common Use Cases & Scenarios

Delaware C-Corp with High Authorized Shares

Delaware corporation with 10 million authorized shares using Assumed Par Value method

Inputs:
  • State:DE
  • Method:Assumed Par Value
  • Authorized Shares:10,000,000
  • Issued Shares:1,000,000
  • Gross Assets:$5,000,000
Expected Results:

Approximately $2,000 using Assumed Par Value vs $85,175 using Authorized Shares method

Texas Company Under Threshold

Texas retail business with $2 million revenue

Inputs:
  • State:TX
  • Total Revenue:$2,000,000
  • Business Type:Retail
Expected Results:

$0 tax - revenue is below the $2.47M no-tax threshold

Frequently Asked Questions

What is the difference between franchise tax and income tax?

Franchise tax is based on net worth, capital, or the privilege of doing business regardless of profit. Income tax is based on net profit. A company losing money may owe franchise tax but not income tax. Many states impose both types of taxes.

Why should Delaware corporations compare calculation methods?

Delaware offers two franchise tax calculation methods: Authorized Shares and Assumed Par Value Capital. The Authorized Shares method can result in very high taxes for companies with many authorized shares. The Assumed Par Value method often results in significantly lower taxes for most corporations.

How does Texas margin tax work?

Texas charges a margin tax (franchise tax) based on total revenue, not net worth. Retail and wholesale businesses pay 0.375% of taxable margin, while other businesses pay 0.75%. Companies with revenue under $2.47 million owe no tax. The taxable margin is the lowest of several calculation methods.

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Franchise Tax Calculator | TX, CA, DE & All 50 States