Gov. Jack Markell will get his $51 million in new business tax revenue.
State senators signed off on the bill raising annual fees on LLCs by $50 and the minimum corporate franchise tax by $100 Thursday along party lines just before the General Assembly recesses for their Easter break.
Some Republicans admitted that they don’t think this will deter businesses from incorporating in Delaware, but Minority Leader Gary Simpson (R-Milford) says it’s shortsighted.
“I think we’re absolutely forgetting the long term effects this may have on our state attracting business to Delaware,” said Simpson.
Republicans also said they wanted to wait for newer revenue reports in the coming months before digging into the pockets of LLCs and businesses incorporating in Delaware.
Democrat Robert Venables (D-Laurel) agreed with that sentiment, but says conservatives should be willing to help negotiate these types of tough votes, even in election years.
“It’s not right that they’re going to be able to go ahead and say, ‘These Democrats aren’t nothing but people that want to raise taxes all the time,’ said Venables. “That’s not really true. I wish that I didn’t have to vote for this today.”
The business tax package serves as one cornerstone to Markell’s fiscal year 2015 operating budget, which still faces another $40 million gap according to the latest state revenue forecasts.
It is the first and least controversial of three tax hike proposals from the Markell administration. The other two include boosting the gas tax by ten cents and levying fees on homeowners and businesses to clean the state’s waterways.
The bill now heads to the governor’s desk for his signature.