OPINION 

Dear Friends,

Read the important piece below on how the Delaware legislature took on issues that could save or lose America’s First State hundreds of millions of dollars in taxes. How do you see this, folks? I’d love to hear your thoughts on this. Your feedback is always welcome at your Coastal Network. 

Respectfully Submitted,

JUDSON Bennett-Coastal Network

Here’s the story: 

Delaware Changes Things

“Why Should Delaware Care?


Financial analysts recently estimated that Delaware could stand to lose hundreds of millions of dollars in corporate taxes under new cuts made in the One Big Beautiful Bill Act. That has led Democrats to push for decoupling the tax code, while Republicans want the governor to pare back spending.

Delaware’s business taxes no longer mirror the IRS’s – at least not completely.  

On Wednesday, the Delaware Senate convened for another special legislative session, and passed a bill that reversed some of the effects onto the state from President Donald Trump’s signature piece of federal legislation – the One Big Beautiful Bill Act.

Make sense of the decisions shaping Delaware.

Immediately after the Senate hearing, Gov. Matt Meyer signed the legislation, House Bill 255, into law. Meyer said the bill, which adjusts when a business can take certain tax write-offs, fixes a $400 million problem facing the state, allowing it now “to continue to deliver critical services to those who need it most.”

Standing alongside Meyer at the bill signing were House Majority Leader Kerri Evelyn Harris and Delaware Finance Secretary Michael R. Smith. Notably absent were members of the Delaware Senate, who for months have maintained a frosty relationship with the governor.

What’s in the bill?

Among several provisions within the One Big Beautiful Bill Act was one that gave businesses the ability to take lump-sum tax write-offs for research and development costs, and for the depreciation of buildings and equipment. Previously, those write-offs were required to be taken over several-year periods. 

The change prompted Delaware’s budget prognosticators last month to predict a steep, near-term drop in business tax revenues – totaling more than $400 million during the next three years.

Companies that sell products or offer services in Delaware pay a flat 8.7% tax on income derived in the state — whether they have a physical location there or not.

In response to the projected drop in tax revenue, Harris introduced House Bill 255. A total of 15 additional or co-sponsors in the House and Senate also signed onto the legislation 

Senate Majority Leader Bryan Townsend speaks about House Bill 255 on the Senate floor on Wednesday, Nov. 20. | Photo Courtesy of the Senate Democrats.

The bill decouples Delaware’s rules for business tax write-offs from those set by the IRS.

The result is that companies will not be able to take lump-sum write-offs on their state corporate income taxes, even as the One Big Beautiful Bill Act now allows it for federal income taxes.

Last week, the Delaware House passed the bill following nearly two hours of comments from opposing Republicans who characterized it as legislation that would create an anti-business environment in the state. 

Republicans push back

On Wednesday, Senate Republicans continued the pushback, claiming the bill would discourage new business investment.

Senate Minority Leader Gerald Hocker (R-Ocean View) lamented Delaware’s loss of past companies, including General Motors and Chrysler, and argued “we need big business in this state.” 

State Sen. Dave Lawson (R-Marydel) asserted that House Bill 255 would give Delaware’s array of vocal national critics more reason to attack the state. 

“When do we stop giving the folks, like Elon Musk and others, ammunition to take shots at us,” he asked. “He has a big audience. He has a big mouth. And he has a lot of weight.”  

Separate from Delaware’s corporate income tax system, the state’s corporate franchise has been the subject of scorn from several billionaire business founders and corporate executives. In early 2024, Musk told his tens of millions of followers on X to “Never incorporate your company in the state of Delaware.”

In response to criticisms from the Republican senators, Senate Majority Leader Bryan Townsend repeatedly argued that the bill is not about being anti-business, but about setting the timing for when a company can take write-offs.

At stake in the bill, he said, is funding for police, fire companies, and other services. And without it, lawmakers would have to cut programs or shift resources from one program to another, he said.

Sen. Eric Buckson (R-Dover South) speaks about House Bill 255 on the Senate floor on Wednesday, Nov. 20. | SPOTLIGHT DELAWARE PHOTO BY KARL BAKER

Congress “made a decision a few months ago,” he said, referring to the One Big Beautiful Bill Act. “We now know what effect that would have on Delaware, and we think it’s better to say, ‘No, we want to make sure to have those resources available.’”

State Sen. Stephanie Hansen (D-Middletown) noted that HB 255 does exempt the first $2.5 million of depreciation expense – concluding then that it does not impact small businesses 

“We’re not talking about a big effect on mom-and-pop businesses,” she said. 

State Sen. Eric Buckson (R-Dover South), a relative moderate, said recent amendments to the bill improved it. Still, he urged his colleagues to wait for state officials to release another budget forecast in December before passing any legislation.    

“I don’t understand this rush,” Buckson said. 

Criticism for the governor

While he struck a conciliatory tone with his Senate colleagues, Buckson had sharper words for the governor. During the hearing, he voiced his frustration with Meyer’s decision to schedule a bill signing  ceremony before the legislation had actually passed. 

Buckson suggested the governor’s decision signaled that the debate was a forgone conclusion — or, as he said, a “fait accompli.” Buckson even suggested that Senate leaders call Meyer down to the hearing to inquire about why he scheduled a bill signing “for a vote that we have yet not had.” 

“Is he available for that answer?” Buckson asked, directing the question to Lt. Gov. Kyle Evans Gay, who was presiding over the Senate. 

Gay replied, “I think this debate is supposed to be tailored to the contents of the bill.” 

Later in the hearing, Townsend appeared to side with his Republican colleague, stating “it is very much OK with me if my colleagues are frustrated with a variety of things that happened outside of this chamber.” 

Later, in an interview with Spotlight Delaware, Townsend said several Democratic and Republican senators believed it was inappropriate to announce a bill signing ceremony “before the Senate had even convened.” 

“It just felt like an unnecessary rush to find a microphone in a camera bank,” Townsend said, who has publicly sparred with Meyer several times over the past year.

Townsend said his frustration also extended to the governor’s emphasis in public statements that House Bill 255 was an effort to combat Trump. He said that forced Republican senators to dig in their heels on the legislation. 

Asked about the criticism, Meyer said the House and the Senate had vibrant debates about the bill, and if they had wanted to slow down the legislative process, they could have. 

Gov. Matt Meyer speaks during a bill signing ceremony for House Bill 255 on Wednesday, Nov. 19. | SPOTLIGHT DELAWARE PHOTO BY KARL BAKER

He also suggested the pushback showed that opponents of the bill didn’t want to argue about its merits directly. 

“People come up with all sorts of things to talk about in these sessions,” he said.

Following the comments, Harris, the House majority leader, came to Meyer’s defense. She said bill signings frequently happen immediately after legislative hearings, especially when vote counts tell leaders that a bill will pass. 

“So, this is not unusual,” she said. “It is not our current governor’s first time having a bill signing right after something comes off the floor.” 

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