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State Franchise Tax & Annual Report Deadlines for Startups (2026)

Franchise tax and annual reports for the 13 states startups actually use: deadlines, fees, and minimums for Delaware, California, Texas and more.

By the Acorn 9 teamReviewed by a licensed CPA on the Acorn 9 team

Income tax gets all the attention, but the filings that actually trip startups are the recurring state ones: franchise tax and annual reports. They're due whether or not you made money, they vary wildly by state, and missing one quietly puts your company in bad standing — which surfaces at the worst possible time, during a financing or an acquisition. Here's how it works for the 13 states startups actually use.

Franchise tax vs. annual report

Two different filings, often confused:

  • Annual report — an informational filing that keeps your registration current (officers, registered agent, address). Usually a small fee.
  • Franchise tax — a payment for the privilege of existing as a registered entity in the state. Not a tax on income — you owe it in a loss year.

Some states bundle them; some keep them separate; some have one and not the other. Use the lookup to see your state's exact combination:

Interactive

State deadline & fee lookup

Annual report
March 1 (filed with franchise tax)
$50 (corp)
Franchise tax
Min $175 (Authorized Shares) / $400 (Assumed Par Value); $200k max
Notes
LLCs: no annual report, flat $300 tax due June 1. See our full Delaware Franchise Tax guide.

As of 2026; deadlines and fees change — confirm on the state portal before filing. If you operate in a state where you did not incorporate, foreign-qualifying there adds its own annual-report and franchise-tax obligations on top of your home state.

The states startups actually use

Delaware — the default, and its famous sticker shock

Most venture-backed startups incorporate here. C-corps file the annual report and franchise tax together by March 1. The franchise tax has two calculation methods:

  • Authorized Shares method — the default the state shows you, and the one that produces alarming five-figure bills for startups with millions of authorized shares.
  • Assumed Par Value Capital method — almost always far lower for a real startup, frequently the $400 minimum.

If you get a Delaware bill for $75,000, don't pay it — recompute under Assumed Par Value (we cover the mechanics in our Delaware Franchise Tax guide). Delaware LLCs skip the annual report but owe a flat $300 by June 1.

California — the $800 minimum that catches everyone

California charges an $800 minimum franchise tax to virtually every corporation and LLC doing business in the state, regardless of income. Corporations still get a first-year exemption; the LLC waiver (AB-85) has expired, so LLCs pay $800 from year one. The Statement of Information is a separate filing ($25 corp / $20 LLC). California catches Delaware startups constantly: a DE C-corp with one San Francisco employee owes the $800 and files in California.

Texas — "no tax due" still means "file"

Texas has no annual report fee, but corporations and LLCs file a franchise (margin) report plus a Public Information Report by May 15. For 2026 the no-tax-due threshold is $2,650,000 in revenue — below it you owe $0, but you must still file the PIR, and a missed filing draws a $50 penalty even at zero tax.

The no-franchise-tax states (with asterisks)

  • Washington — no franchise tax, but a B&O gross-receipts tax on revenue with no deduction for expenses (brutal for low-margin startups). Annual report ~$70.
  • Florida — no franchise tax; corps pay 5.5% income tax on FL-source income. Annual report due May 1, with a flat $400 late fee and no grace period.
  • Colorado — no franchise tax; a $25 Periodic Report in your anniversary month.
  • Nevada — no franchise tax, but a pricey bundle: corps owe ~$650 (Annual List + state business license) each year.

The minimum-tax states

  • Massachusetts — $456 minimum corporate excise even at zero income; LLC annual report fee is a steep $500.
  • New Jersey — Corporation Business Tax minimum $500-$2,000 by NJ gross receipts; annual report $75.
  • Illinois — franchise tax on paid-in capital is being phased out (exemption rising to $100,000 for 2026, full repeal January 1, 2027), so most startups now owe $0; annual report $75. LLCs are exempt from the franchise tax.

The low-cost havens

  • Wyoming — License Tax, minimum $60 (only Wyoming-situated assets count, so most startups pay the floor).
  • Georgia — annual report $60 (a new $10 service fee applies for 2026), due April 1; net-worth tax applies to corporations only.

The trap: you owe in every state you operate, not just where you formed

Incorporating in Delaware doesn't mean you only file in Delaware. The moment you do business in another state — which includes having a remote employee or an office there — you generally must foreign-qualify, picking up that state's annual report and franchise/minimum tax on top of Delaware's.

A Delaware C-corp with employees in California, New York, and Massachusetts files in all four: Delaware franchise tax, California's $800, New York's biennial statement and franchise tax, and Massachusetts's $456 excise. This is the same activity that creates income-tax nexus — see our multi-state nexus guide for when a hire crosses the line.

Why this matters more than the dollar amounts

The fees are mostly small. The consequence of missing them is not. Continued non-compliance leads to loss of good standing or administrative dissolution, which can:

  • Block a financing or acquisition (diligence checks good standing in every state).
  • Void contracts or bar you from suing in that state.
  • Cost more to reinstate than the original filing would have.

Founders routinely discover a lapsed Delaware standing or an unfiled California Statement of Information mid-diligence, then scramble to reinstate while the deal clock runs.

Bottom line

Map every state where you're incorporated or operating, put each one's franchise-tax and annual-report deadline on a recurring calendar, and treat them as non-negotiable even in a zero-revenue year. Use the lookup above for the 13 common states, recompute any scary Delaware bill under Assumed Par Value, and have a CPA confirm your foreign-qualification footprint — the cheapest version of this problem is the one you never let lapse.

This guide is informational only and is not tax advice. Deadlines, fees, and thresholds are as of 2026 and change frequently — confirm on each state's portal before filing. Sources: Delaware Division of Corporations · California Franchise Tax Board · Texas Comptroller · Florida Division of Corporations (Sunbiz) · and the Secretary of State / Department of Revenue for each state covered. Reviewed by a licensed CPA on the Acorn 9 team.

FAQ

Frequently asked questions

What is a franchise tax?
A franchise tax is a fee a state charges for the privilege of existing as a registered business there — it is not a tax on income or profit. Many states levy it on a flat or minimum basis, so you owe it even in a loss year. Delaware, California, Texas, Massachusetts, and others all impose some form of it; Washington, Florida, Colorado, and Nevada do not (though several substitute a gross-receipts or income tax). It is separate from, and on top of, your federal and state income taxes.
What's the difference between a franchise tax and an annual report?
An annual report is an informational filing that keeps your registration current — it lists officers, registered agent, and address, and usually carries a small fee. A franchise tax is a payment for the privilege of doing business in the state. Some states bundle them (Delaware corporations file and pay together by March 1; Texas combines the Public Information Report with the franchise report by May 15), while others keep them separate. Missing either can put your entity in bad standing.
When is Delaware franchise tax due?
For Delaware C-corporations, the annual report and franchise tax are both due March 1. The minimum is $175 under the Authorized Shares method or $400 under the Assumed Par Value Capital method, plus a $50 report fee, up to a $200,000 maximum. Delaware LLCs don't file an annual report but owe a flat $300 tax due June 1. Many startups get a giant Authorized Shares bill and panic — recomputing under the Assumed Par Value method almost always brings it down to a few hundred dollars.
Do I owe franchise tax if my startup had no income?
Usually yes. Franchise and minimum taxes are charged for existing, not for earning. A Delaware C-corp owes at least $175 even at zero revenue; California charges its $800 minimum franchise tax (with a first-year exemption for corporations); Massachusetts has a $456 minimum corporate excise. Annual report fees are likewise due regardless of income. Dissolving or formally withdrawing is the only way to stop the meter.
What happens if I miss a state annual report or franchise tax deadline?
You'll typically face a penalty and interest, and after continued non-compliance the state can revoke your good standing or administratively dissolve the entity. Delaware adds a $200 penalty plus interest; Florida charges a flat $400 late fee with no grace period; Texas adds a $50 penalty even when no tax is due. Loss of good standing can block financing, contracts, and your ability to sue in that state — and reinstatement costs more than the original filing.
Do I have to file in states other than where I incorporated?
If you do business in a state beyond your state of incorporation — including by having a remote employee or an office there — you generally must foreign-qualify in that state, which adds its own annual report and franchise/minimum tax on top of your home state's. A Delaware C-corp operating in California, for example, pays Delaware franchise tax and California's $800 minimum and files in both. See our multi-state nexus guide for when activity in another state creates this obligation.