House Bill 175 enacted amendments to the Delaware Corporation Franchise Tax Law (Title 8, Sec. 501 et seq.). Please note that most of the amendments go into effect January 1, 2018, which include among other things an increase in the franchise taxes. A summary of the amendments are as follows:

Sec. 502(c) was amended to provide that in the event of neglect, refusal or failure to file a complete annual franchise tax report on or before March 1, the corporation shall pay an additional sum of $200 (formerly, $125).

Sec. 503(a)(1) was amended to provide that in calculating the tax where the authorized capital stock is more than 10,000 shares, add the further sum of $85 (formerly $75) on each additional 10,000 shares or part thereof.

Sec. 503(a)(2) was amended to provide that in calculating the tax where the assumed no-par capital is more than $1 million, add the further sum of $85 (formerly, $75) for each $1 million or part thereof of additional assumed no-par capital.

Sec. 503(a)(2) was also amended to provide that in the calculation of tax using the assumed capital method, to the amount attributable to the corporation's assumed no-par capital, add $400 (formerly, $350) for each $1 million or fraction thereof in excess of $1 million of an assumed par value capital. In addition, it provides that whenever the amount of the assumed par value capital is less than $1 million, the amount of the tax shall be the amount that bears the same relation to $400 (formerly, $350) that the amount of assumed par value capital bears to $1 million.

Sec. 503(c) was amended to provide that other than in the case of Large Corporate Filers, the tax on any corporation computed by Sec. 503(a)(1) (authorized share method) shall be no more than $200,000 (formerly, $180,000). This amendment is effective for the tax year beginning on January 1, 2017.

Sec. 503(c) was also amended to provide that other than in the case of Large Corporate Filers, the tax on any corporation computed by Sec. 503(a)(2) (assumed capital value method) shall be no more than $200,000 (formerly, $180,000) nor less than $400 (formerly, $350). The increase in the maximum is effective for the tax year beginning on January 1, 2017. The increase in the minimum is effective January 1, 2018.

Sec. 503(c) was also amended to provide that the annual franchise tax for Large Corporate Filers shall be $250,000. A corporation is a Large Corporate Filer if it satisfies the following two requirements for a fiscal year in which its annual franchise tax would otherwise be $200,000. The first requirement is that it had a class or series of stock listed on a national securities exchange. The second is that it reported in its most recent annual report both of the following (a) consolidated annual gross revenues equal to or greater than $750 million or consolidated assets equal to or greater than $750 million and (b) consolidated annual gross revenues not less than $250 million and consolidated assets not less than $250 million. This amendment is effective for the tax year beginning on January 1, 2017.