SaaS Founders: Delaware C-Corp + Multi-State Payroll Nexus

What to know

• First CA hire = $800 + $100 corporate qualification on top of Delaware costs.
• APV keeps franchise tax at $450 for most pre-revenue startups.
• File 83(b)s within 30 days of every founder/early-employee issuance.

The standard stack

Most venture-track SaaS companies are Delaware C-corporations with around 10 million authorized shares, founders on vesting with 83(b) elections filed within 30 days, IP assigned to the company, and the Delaware franchise tax filed under the Assumed Par Value method, usually $400 plus the $50 report fee while the company is small.

Every hire can add a state

A W-2 employee working from home in another state generally makes the company taxable there. In California that means registering as a foreign corporation ($100), paying at least $800 a year or 8.84% of California-apportioned income, running California payroll, and filing Form 100: on top of Delaware. New York, Massachusetts, and others work similarly. Contractors carry less nexus risk but more misclassification risk.

Sales tax on software

States disagree on whether SaaS is taxable: New York, Texas (on 80% of the charge), Washington, and others tax it; California generally doesn't. Once sales into a taxing state pass its economic threshold, you register and collect there even with no employees.