Legislation raising dozens of fees on businesses goes to Delaware Gov. Matt Meyer’s desk

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Legislation hiking business fees is headed to Delaware Gov. Matt Meyer.

Delaware wants to raise several taxes and fees for limited liability companies and other entities. The legislation does not touch fees on corporations. It also boosts the charge for expedited services.

The bill, sponsored by Senate Majority Leader Bryan Townsend, is expected to bring the state more than $140 million in revenue. He said that the fees are artificially low because they had not been updated for several years.

The increases are part of Meyer’s recommended $6.9 billion budget for the fiscal year 2027 budget. He’s relying on spending cuts and fee increases to close a $500 million structural deficit.

Senate Democrats passed the measure along party lines, but Republicans questioned the number of votes the legislation was required to have under the state’s constitution.

Democrats said state law required three-fifths of the chamber to approve the measure for it to have passed. But Minority Leader Brian Pettyjohn said his caucus believed it required a two-thirds vote. He also questioned the validity of the House’s April vote, which was also a three-fifths vote.

Republicans also expressed concern about the possible impact to Delaware businesses and the state’s corporate franchise.

State Sen. Dave Lawson, R-Marydel, said he opposed the bill because it could harm mom-and-pop operations.

“I think it’s a bad message all the way around and having spent some time in the business world, these small fees add up to a tremendous amount of money,” he said.

Lawson also said he agreed with Seaford Republican state Sen. Bryant Richardson that the public scrutiny of Delaware’s corporate franchise makes the price hikes “bad timing.”

Debate over whether Delaware’s $2 billion corporation franchise is experiencing a mass exodus, or a “DExit,” has been swirling since billionaire Elon Musk moved his companies out of state and some other CEOs subsequently did the same. Texas and Nevada have branded their courts as being more business-friendly than Delaware’s premier Chancery Court. Dell Technologies’ board of directors recently voted to move its incorporation to Texas.

“Corporations have been an absolute golden goose for the state of Delaware,” Lawson said. “Why do we continue cutting at its throat?”

Townsend argued that the fee increases would impact about 1.6 million entities, with a significant majority of them physically located outside of the state. He also cautioned about potential consequences of connecting this piece of legislation to the “DExit” narrative.

“I don’t think we should take for granted they don’t have an effect, but I also don’t think that we should pontificate about what effect they might have,” Townsend said. “There’s a whole lot of politics out there in the world now that can affect things that are sort of more inherently apolitical, and we need to be very careful about not just sort of making those assumptions.”