# Booking the franchise tax

> $37.50 accrued each month, then cleared by the March 1 payment.

Source: https://lopifi.com/learn/delaware-franchise-tax-calculation/booking-the-franchise-tax
Part of: Lopifi — US GAAP books on autopilot, checked by a CPA (https://lopifi.com)

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**How do I record Delaware franchise tax in the books?** $37.50 accrued each month, then cleared by the March 1 payment.

The franchise tax isn't measured on income, so it isn't [income tax expense](https://lopifi.com/md/glossary/income-tax-expense). It's an operating expense, a cost of keeping the company alive, and it belongs to the year it's for, not the March it's paid in. So from 2027 Northwind [accrues](https://lopifi.com/md/glossary/accrual) a twelfth of the full-year bill each month, $37.50, into accrued liabilities, and the March payment clears the accrual.

## Read further

- https://lopifi.com/md/journal-entries/accrued-expenses
- https://lopifi.com/md/docs/domain/04-schedules-and-accruals

- **Track:** [Compliance & tax](https://lopifi.com/md/learn/compliance)
- **Part of:** [Delaware franchise tax, worked both ways](https://lopifi.com/md/learn/delaware-franchise-tax-calculation) — 4 min
- **Terms taught:** [Accrual](https://lopifi.com/md/glossary/accrual), [Accrued liability](https://lopifi.com/md/glossary/accrued-liability)
- **Previous:** [The two methods, worked line by line](https://lopifi.com/md/learn/delaware-franchise-tax-calculation/two-methods-worked)
- **Next:** [Form 1120: the federal return, the extension and the 21% rate, Compliance · Lesson 3](https://lopifi.com/md/learn/form-1120-corporate-income-tax)
- **The course:** https://lopifi.com/md/learn