Delaware businesses win tax break in 2006
Way back on May 3, 2005 I talked about the campaign to eliminate the gross receipts tax on Delaware businesses.
Yesterday, Governor Minner and lawmakers issued a statement that they have agreed on the overall 2006 operating budget for the State, which includes a cut in the gross receipts tax. Here’s the relevant portion of the financial plan detailed in the statement:
Tax and Revenue Issues
• Targeted Gross Receipts Tax reduction ($16.7 million in FY06 & $47.1 million in FY07)
• Increase in the per-month exclusion from $50k to $80K (removes 1,200 small businesses from the tax)
• 25 percent reduction for automobile manufacturers
• 20 percent reduction across the board
While this may not have a huge impact on many small businesses, it is a significant step in helping Delaware to retain some big businesses like GM and Diamler-Chrysler.
Delaware State Chamber of Commerce senior vice president, A. Richard Heffron, highlighted this important fact in the today’s News Journal where he points out:
“There are only three states in the Northeast that still have auto plants, and only one charges a gross receipts tax”
The automakers stand to save a combined $14 million due to the proposed change in tax.
According to Patrick Jackson at delawareonline, the tax bill could be ready to go to the legislature as early as next week.