Corporate franchise taxes and business filing fees are among the most important sources of revenue for the State of Delaware, providing a stable funding stream that supports public services and shapes the state’s overall tax structure.
Each year, Delaware collects revenue from corporations and other entity types through annual taxes and filing fees paid to the Delaware Division of Corporations, which oversees business formations and filings. The annual taxes include the corporate franchise tax paid by corporations and an annual tax paid by limited partnerships, limited liability companies and general partnerships.
In addition to these annual taxes, corporations and other entities pay the Division of Corporation filing fees in connection with the incorporation or formation of new entities and in connection with filings that are required to effectuate certain actions such as amendments, mergers and conversions. In addition to such filing fees, the Division of Corporations offers an expedited filing service pursuant to which filers can pay for their filings to be processed on an expedited basis, such as 1 or 2 hours within the time that the filing is received by the Division.
State financial reports show that [corporate franchise taxes] and related fees typically generate 25% to 30% of Delaware’s General Fund revenue, totaling approximately $1.8 billion to $1.9 billion annually in recent fiscal years. That makes revenue from the corporate franchise tax one of the single largest funding sources for state government, supporting education, healthcare, transportation, and public safety.
Delaware is home to more than 1.8 million active business entities, including more than 60% of Fortune 500 companies, a concentration that drives both direct and indirect economic activity across the state.
EXPLORE MORE
- Keep your journey going at the Civics 101 homepage
- An introduction to the series
- Check out the handy Glossary of Terms
- Read what Delaware’s leaders have said about the budget
- PART 1: Dive into the “four buckets” of Delaware’s budget
- How the state budget is a lot like a family budget.
- PART 2: Where does the money come from?
- How Corporate Franchise powers the budget
- Delaware’s shifting revenue streams
Direct Revenue to the State
The largest share of Delaware’s corporate-related income comes from the corporate franchise tax paid annually by corporations. The tax is calculated using either the authorized shares method or the assumed par value capital method, with a minimum franchise tax of $175 and a maximum franchise tax of $200,000, unless the corporation is identified as a large corporate filer, in which case the corporate franchise tax is $250,000 a year. In connection with the payment of the corporation franchise tax, corporations must also file an annual report setting forth certain corporate information. Entities such as limited partnerships, limited liability companies and general partnerships pay an annual tax of $300 and are not required to file an annual report.
In addition to the corporate franchise tax and the annual taxes paid by alternative entities, the state collects fees when filings are made with the Division of Corporations such as in connection with the incorporation or formation of new entities or the filing of an annual report or in connection with other actions that require filings such as mergers, amendments, conversions and dissolutions. Fees are also paid in connection with the expedition of the processing of such filings or in order to obtain certified copies of such filings. These revenues flow directly into the General Fund and are a key reason Delaware can operate without a general sales tax.
Indirect Economic Impact
Delaware’s corporate ecosystem also generates substantial indirect revenue for Delaware through related industries.
The Delaware Court of Chancery plays a central role in this ecosystem. While court filing fees are modest, the court’s national reputation for expertise, speed, and predictability gives companies confidence that disputes will be resolved fairly and efficiently.
That confidence attracts corporations to Delaware and supports thousands of high-paying jobs in law, accounting, compliance, and corporate services, generating personal income taxes, gross receipts taxes, and business taxes. Corporate activity also supports bank franchise taxes, commercial real estate development, and hospitality revenue tied to legal proceedings and business travel.
Another major indirect source is abandoned property, known as escheat. Delaware collects unclaimed property held by corporations, such as dormant accounts and uncashed checks. In recent years, escheat revenue has exceeded $500 million annually, making it one of the state’s largest non-tax revenue sources.
Why It Matters
Because corporate revenue accounts for such a large share of the state budget, Delaware’s fiscal health is closely tied to its position as the nation’s leading incorporation state. Legal stability, predictable rules, and confidence in the court system are widely viewed as essential to maintaining that status.
For residents, the impact is practical. Fees and other amounts paid by corporations and other entity types help fund core services while reducing the need for broader taxes that would otherwise fall directly on individuals.
As part of the Civics 101 series, this overview explains how Delaware’s corporate ecosystem functions not just as a legal framework, but as a central component of how the state pays its bills.
At a Glance: Corporate Revenue to Delaware
| Revenue Type | What It Includes | Approximate Annual Impact |
| Direct Revenue | Franchise taxes, incorporation fees, filing and certification fees | $1.8–$1.9 billion |
| Indirect Revenue | Escheat, income taxes from legal and corporate services, business and banking taxes | $1+ billion |
| Total Corporate Impact | Direct and indirect corporate-driven revenue | $2.8–$3.0 billion+ |
Looking Ahead
State officials and legal experts warn that this revenue model is not guaranteed. Competition from other states, federal regulatory changes, economic downturns, and shifts in corporate governance practices all pose potential risks to Delaware’s dominance as the nation’s corporate home. Because the Delaware Court of Chancery underpins corporate confidence in the state, maintaining its independence, expertise, and technological capacity is widely viewed as essential. Continued investment in the court, protection from political influence, and adaptation to emerging business and legal trends are seen as necessary steps to safeguard one of Delaware’s most critical and enduring revenue sources.
About the Civics 101 Series: Civics 101 is a continuing explanatory series by Delaware LIVE and the Spotlight Delaware content marketing team designed to help readers understand how state government works and how budget decisions affect everyday life in Delaware. To read other stories in the series, visit the Civics 101 home page.
