Delaware lawmakers passed a bill on Thursday that will increase some corporate taxes.
House Bill 265 will increase the annual tax on limited liabilities and partnerships on file with the Secretary of State from $250 to $300 a year, generating an extra $33.6 million for the state.
It will also increase the corporation franchise tax by $100 for corporations that file on the authorized shares method, resulting in additional $17.9 million in revenue, according to Secretary of State Jeff Bullock.
The state is currently facing a budget deficit as education and health care costs continue to rise. Gov. Jack Markell called for the corporate tax increases during his budget address in January.
Senate Republicans expressed opposition to the tax increase, saying it will hurt current business and scare away companies that are thinking of incorporating in Delaware.
“I would hate for us to make that mistake today for a short-term gain of fixing today’s budget problem and forfeiting that long-term benefit of keeping Delaware first in the minds of businesses throughout the world,” said Sen. Gary Simpson, R-Milford.
Others opposed to the bill argued that the state needs to look at more ways to cut wasteful spending such as Medicaid fraud.
“The state has done nothing substantial to cut their own budget, nothing,” said Sen. David Lawson, R- Marydel. “We just continue to get on the backs of the working man. I think we need to stop this mentality.”
The bill passed the Senate 13-7 and now heads to the governor’s desk.