Corporations appreciate Delaware and vice versa

DOVER — Some notes and quotes between headlines and deadlines …

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Ever wonder why Delaware does not need a sales tax?

On Thursday, this editor enjoyed a presentation by Josh Twilley of Incorporating Services Ltd., to Leadership Central Delaware’s Class of 2015 during its Economic Development Day program.

Franchise taxes now account for nearly one-fourth of revenues for the state of Delaware.

By the numbers, there are more than 1.1 million business entities incorporating in Delaware. More than 300 of the nation’s Fortune 500 companies are incorporated here.

The projected revenue for Fiscal Year 2016 is more than $1 billion.

“That’s why we do not have the sales tax,” Mr. Twilley said.

From the Editor logo copy copyThe only slice of Delaware’s revenue pie that is larger is income taxes.

Later Thursday morning, U.S. Rep. John Carney, D-Del., visited the Delaware State News office and we discussed myriad topics, including the importance of incorporations to Delaware.

Other states, and sometimes the federal government, have tried to get a cut of Delaware’s success.

Like Mr. Twilley, Rep. Carney explained that Delaware’s strength in this area really comes down to decades of work by the state’s Court of Chancery and its extensive body of case law.

“Business can get into court quickly here and enjoy predictability,” Rep. Carney said.

Mr. Twilley noted that the board of directors of United Healthcare, currently incorporated in Minnesota, will entertain a motion to reincorporate in Delaware at its June meeting.

In United Healthcare’s outline of reasons why Delaware would be better, the proxy said, “The prominence and predictability of Delaware corporate law provides a reliable foundation on which our governance decisions can be based. We believe that shareholders and the company will benefit from the responsiveness of Delaware corporate law.”

Here’s a bit of trivia for you. Did you know that Alaska, Montana, New Hampshire and Oregon are the only other states without a sales tax?

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Rep. Carney also discussed the changing nature of Delaware’s economy, lamenting the loss of the many banking jobs such as those at MBNA and the manufacturing base.

He grew up in Claymont and has seen how the refinery and other manufacturing jobs that once served the middle

Rep. John C. Carney Jr.

Rep. John C. Carney Jr.

class in the northeast corridor of Delaware, into Pennsylvania, have been reduced.

“We’ve lost a lot of our manufacturing base and those are lost jobs to the middle class,” he said.

It is interesting to think about how much this has changed many Delaware communities over the past several years.

The Claymont changes, we noted, are much like what Seaford experienced with the loss of the DuPont Co.

Rep. Carney said it makes it all the more important that Delaware continue to stimulate small business growth.

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This editor’s visit with the Leadership Central Delaware program Thursday was to present headlines in an overview of progress in Central Delaware.

One of the big topics, of course, is the Garrison Energy Center, which will go live in just a few weeks and begin selling electricity into the PJM grid.

Quietly, across the field at the Garrison Oak Technology Park, the Uzin Utz plant is nearing completion and the German flooring company soon will start turning out product.

The other project currently getting attention is the $98 million runway renovations at Dover Air Force Base.

The growing mountain of concrete rubble from the old runway that is being pulverized and trucked away certainly catches the eye of passers-by.

The C-5Ms will only be in the local skies for a few more weeks. As the project nears the intersection of the long runways, the C-5Ms will be reassigned temporarily to McGuire in New Jersey.

 

Reach editor Andrew West at awest@newszap.com

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