Delaware: Changes to Business Tax Code

Delaware recently enacted a new business tax code with the signing of House Bill 235 (HB 235), also known as the Delaware Competes Act. Currently, corporate income tax in Delaware is calculated based on a company’s total nationwide sales, payroll, and property holdings. Starting in 2017, the corporate income tax will be calculated based solely on a corporation’s percentage of in-state sales.

The change will take place gradually over a four-year period, moving from 50 percent in 2017 to 100 percent by 2020. Companies with their headquarters based in Delaware will receive the full benefits of HB 235 in 2017. In the past, neighboring states including Pennsylvania, New Jersey, and New York have all made similar adjustments to their tax calculations–leaving Delaware at a disadvantage.

Other changes associated with the Delaware Competes Act include simplifying the tax filing process for small business by allowing them to pay 25 percent of their estimated taxes per quarter, instead of having to pay 70 percent by June 1.

In total, changes to the Delaware business tax code are said to make vast improvements in the following ways:

  • Incentivize job creation and investment
  • Make Delaware’s tax structure more competitive with other states
  • Support small businesses
  • Remove disincentives for companies to create new jobs in Delaware and invest in Delaware property

If you have any questions regarding HB 235, please give us a call at 888.372.7273. To read the bill in its entirety, visit http://tinyurl.com/DEHB235.

Advertisements

Comments are closed.

WordPress.com.

Up ↑