Delaware Lawmakers Consider Raising Corporate Franchise Tax - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

Delaware Lawmakers Consider Raising Corporate Franchise Tax

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DOVER, Del. -- Delaware lawmakers have introduced legislation to hike the corporate franchise tax for the largest businesses incorporated in the state, a move supporters say could lead to more than $100 million in revenue.

The bi-partisan proposal would create a new tax bracket that would require the largest corporations in Delaware to pay a new top rate with a maximum of $250,000 each year., higher than the current maximum of $180,000. It would apply to about 1,900 firms incorporated in the First State, according to a spokesman for the Delaware Department of State.

The legislation comes at a time when Delaware lawmakers and Gov. John Carney are grappling with a budget deficit of more than $382 million in the upcoming fiscal year. The plan has support from Democratic and Republican leaders, including House Speaker Pete Schwartzkopf and Senate Minority Leader Gary Simpson (R-Milford).

Although larger firms could see themselves facing up to $70,000 more in payments each year, Joshua Twilley, president of Incorporating Services in Camden, said he doesn't believe it will scare many businesses off.

"As you get into larger corporations, the benefit of having a Court of Chancery behind you is much more important than the small increases in tax."

Leaders in the Delaware State Chamber of Commerce say the proposal is reasonable but warn increasing the rate again in the near future.

"As long as they're responsible and most of the big guys are comfortable we're OK but you've gotta be careful," he said. "You keep doing this and we'll run into trouble and people who aren't happy won't leave the state."

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