Republicans push for tax breaks
Republican legislators seek to cut or roll back taxes as state revenues are predicted to rise.
A rosy forecast given by Gov. John Carney in his State of the State address Jan. 20, followed by his proposed budget released Jan. 27, and higher revenue projections reported by the Delaware Economic and Financial Advisory Council, show an $820 million revenue increase, GOP legislators said.
“It is an embarrassment that state government did not enact one meaningful tax cut last year,” said Rep. Rich Collins, R-Millsboro, sponsor of House Bill 191, a pending tax-reduction bill. “After the bills are paid and appropriate reserves are set aside, I believe government has a duty to return money to the people from which it was taken. That was an obligation the Legislature failed to honor last year.”
HB 191 would cut the state’s personal income tax rates across the board by 10%, reduce the corporate income tax by nearly 30%, and slash the gross receipts tax – also known as Delaware’s hidden sales tax – by 50%.
According to the bill’s fiscal impact statement, the proposal would allow taxpayers to collectively retain more than $282 million in the upcoming fiscal year and more than $321 million in fiscal year 2024.
“This is an economic development bill,” Collins said. “In recent years, Delaware has had one of the worst economic growth rates in the nation. I believe allowing people and businesses to keep more of their own money will jump-start investment, increase employment and raise starting wages.”
HB 191 is pending action in the House Revenue & Finance Committee.
Property tax credit proposed for seniors
Two bills would restore property tax credits for senior citizens, returning the credit to levels not seen since 2017.
The senior real property tax credit was cut from $500 to $400 during a budget deficit in 2017, and both bills call for an increase. House Bill 108 would restore the senior real property tax to $500, while House Bill 287 would increase the credit to $750.
Both bills await action in the House Administration Committee.
Bill proposed to decrease realty transfer tax
House Bill 71, proposed by Rep. Mike Ramone, R-Pike Creek South, would decrease the realty transfer tax in Delaware by 25%.
During the 2017 budget deficit, the tax was raised from 3% of the purchase price of a property to 4%. The bill would reset the amount the state takes to levels set before August 2017, restoring the effective combined realty transfer tax to 3%. When fully implemented in FY 2024, HB 71 would allow homebuyers to collectively keep an estimated $83 million. So far, only Republican legislators have sponsored the legislation. The bill cleared the House Revenue & Finance Committee last June and is now pending consideration by the House Appropriations Committee.
Ramone said HB 71 and other Republican-backed bills have been held in committee longer than the 12 legislative days’ allowance under House Rule 35b.
“Given the state’s extraordinary revenue forecasts, there should be no reason to delay implementation,” he said.
