Delaware Gov. Meyer touts incorporation growth, but hasn’t released tax revenue data

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Delaware Gov. Matt Meyer’s administration has been touting the growth of corporate incorporations in the state of Delaware, particularly since last year’s tax law overhaul.

The corporate franchise tax accounts for nearly a third of Delaware’s budget and is the state’s second-largest source of revenue, after personal income tax.

State officials have reported the number of business entities formed in Delaware increased by 100,000, from 2.1 million in 2024 to 2.2 million in 2025.

“Our franchise is extremely healthy in many ways,” Meyer said. “When you look at the numbers based on the last reporting, [it’s] more healthy than it’s ever been.”

But his administration recently declined to publicly share key numbers during the latest meeting of the state’s budget forecasting council, including data on how much corporate tax revenue it’s collected.

Current and former DEFAC members Mike Houghton, Robert Byrd and Rep. Mike Smith, R-Hockessin, told WHYY News the absence of data is “unusual,” “confusing” and “lacks transparency.”

Material provided to the public for the March Delaware Economic and Financial Advisory Council meeting shows corporate franchise tax revenue was flat between December 2025 and March 2026. The council is projecting no growth in fiscal years 2027 and 2028.

“There’s been a lot of discussion about a surge and unprecedented streak of formation in 2025 going into 2026,” said Houghton, a longtime member and former DEFAC chairman, during last week’s meeting. “You would think that a $2.1 billion revenue stream would begin to play through and evidence itself.”

What is the Delaware corporate franchise tax?

The Delaware franchise tax is an annual fee that businesses pay to incorporate in the state. Large corporations are where the state really makes its money.

The tax is calculated using either a shares or assets method, with a maximum of $200,000, unless the company is a large corporate filer, in which case the fee rises to $250,000 a year. The payments are due by March 1.

Limited liability corporations, general partnerships and limited partnerships pay a flat $300 fee by June 1.

It’s unclear how much of the 100,000 entity incorporation growth Meyer’s administration has touted from 2024 to 2025 is made up of smaller businesses, such as limited liability corporations and sole proprietorships and limited partnerships, or large corporations, including Fortune 100-to-500 companies. WHYY News asked the Meyer administration for this information, but the Delaware Department of State declined to provide a breakdown.

The Joint Finance Committee, the legislative budget writing group, uses DEFAC revenue and expense projections to guide its markup of the governor’s recommended budget.

Concern mounts over a lack of transparency

The frustration over the deficit of data from the Meyer administration comes as another multi-billion-dollar company, Liberty Media Corporation, considers moving its incorporation to Nevada. Billionaire Elon Musk pulled his companies Tesla and SpaceX from Delaware over the past year. Other massive companies have followed, including Dropbox and Pershing Square Capital Management, leading to concerns of a “DExit.”

Meyer signed legislation last year that reduces the legal guardrails for founders or powerful executives making deals inside massive companies. The law was recently upheld by the Delaware Supreme Court.

Delaware Secretary of State Charuni Patibanda-Sanchez told DEFAC members the delay was due to revenue that has not yet been collected from the 2025 entity formation growth.

A former state department employee speaking on background because of concerns about publicly criticizing the Meyer administration, said the department should have “almost all of the data” because corporations that owe more than $5,000 are quarterly payers and make their final payment March 1.

The state should also have enough data to project revenue for LLCs, he said.

Smith said he is troubled by the lack of data provided.

“It doesn’t show good leadership, it shows a lot of weakness,” he said. “I’m just very concerned that we continue to put out even content from the governor’s office that isn’t based in the reality that we’re facing.”

Meyer pushes back on critics over lack of public data

Meyer said the absence of corporate franchise tax revenue information is typical for the March DEFAC meeting.

“It is accurate that there is substantial money, obviously that’s already come in this fiscal year and this calendar year as of March 1,” he said. “But it’s not accurate to say that every March DEFAC we have an updated number.”

However, Byrd, a former DEFAC chairman who served on the council for several years, described the lack of information as “unusual.” He said that at this point in time, the administration would have provided a general growth rate of all of the categories, including corporate franchise tax revenue.

“That’s a pretty significant category and you’re simply carrying it forward,” Byrd said. “It looks like they didn’t, for whatever reason, have enough information, or they didn’t do the work to figure out exactly what those numbers were going to be going forward.”

Houghton said in response to a request for comment that he found the presentation “confusing.”

“It seemed unusual to me that there was no additional revenue information provided and no projections,” he said. “That’s why I asked the questions I did.”

Meyer said he disputed that the missing data is out of the ordinary for this time of year.

“They’re wrong,” he said.

JFC Chair Trey Paradee, D-Dover, said he assumed the administration would provide more corporate franchise revenue data over the next two meetings scheduled for mid-May and mid-June. State lawmakers must pass a state budget by June 30.

He said in a statement he was more concerned that more lower-cost business entities, such as LLCs, were forming instead of the high-dollar multi-state or global corporations.

“Corporate formations are also a function of the economy,” Paradee said. “There is no question that the economy is slowing as a result of [President Donald] Trump’s wars and tariff policies. Once those issues are resolved, hopefully we’ll see economic activity pick up and our large corporate filings will increase.”

The next DEFAC meeting is May 18.