Corporate franchise income has been 30% of the state of Delaware’s income for over 30 years. It was set up by then-Gov. Pete du Pont and has kept Delaware finances in great shape since. Delaware has a couple problems. First is a spending problem, with spending increasing at a rate of more than 5% a year. The second is that Delaware is not attracting new companies to incorporate in the state, but rather, it is losing companies — like Exxon, SpaceX and Dell — to Texas. Texas has spent years making itself attractive to business, with low corporate fees and no income tax. Yes, it does have a 6.25% income tax. Texas has been named the best state for business. This was always the moniker for Delaware. Texas has opened a business court, is building a courthouse and has a stock exchange. Delaware passed House Bill 400, which increased annual taxes on limited liability companies and limited partnerships. The only reason Delaware’s income on corporations does not show a negative number is because of this tax increase. Delaware’s own figures show that the corporate income has fallen from $1.4 billion in 2023 to $1.32 billion in 2024. The state of Delaware’s budget forecast shows corporate income staying flat at $1.34 billion through 2028. It is flat, and that is not good!
Delaware needs to attract companies, not send them to Texas, if we want to avoid a sales tax.
Deirdre Taylor
Lewes and Newark
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