Bill changing Delaware’s corporate income tax filed

DOVER — Bipartisan legislation altering the state’s corporate income tax to encourage companies to create jobs and invest in property in Delaware was introduced Friday.

House Bill 235, which is backed by the governor, is aimed at removing disincentives to investing in the state.

While the current tax is based in part on a company’s total sales, payroll and property holdings in Delaware relative to its nationwide business operations, the bill would change the tax to be determined solely to the percentage of sales in Delaware.

Valerie Longhurst

Valerie Longhurst

The change would be phased in over four years, moving from 50 percent in 2017 to 100 percent in 2020.

Companies headquartered in the First State would receive the full benefit in 2017.

“This bill will ensure that Delaware will continue to be an attractive place for businesses to relocate or expand,” Gov. Jack Markell said in a statement. “I am grateful to the leaders of both parties for supporting these common sense reforms that will benefit all Delawareans. Employers should not have to pay more in taxes just because they decide to create more jobs in the state.”

Known as the Delaware Competes Act, the proposal also provides safeguards to businesses that make incorrect estimates, and it requires gross receipts to be filed quarterly instead of monthly.

Supported by leadership from all four caucuses, the proposal is also backed by the Delaware Chamber of Commerce.

“Most other states have abandoned this method of calculating corporate income tax, which leaves Delaware at a competitive disadvantage,” said main sponsor Rep. Valerie Longhurst, D-Bear. “By taking these steps, we are putting Delaware on a level playing field with our surrounding states.”

The bill has been placed in the House Revenue & Finance Committee. The General Assembly reconvenes Tuesday.

Reach staff writer Matt Bittle at mbittle@newszap.com

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