Committee Spotlight: Tax and Finance

BY TYLER MICIK

The State Chamber’s Tax and Finance Committee recently provided feedback on House Substitute 2 for House Bill 13, which proposed updating Delaware’s personal income tax brackets. Specifically, the bill would have added three new top-tier income tax brackets at $150,000, $250,000 and $500,000. The State Chamber opposed the bill and, together with the Delaware Business Roundtable and other associations, sent a letter to the speaker of the house in opposition. Ultimately, the bill did not move out of committee.

This is not the first time changes have been proposed to Delaware’s personal income taxes, and it likely won’t be the last, with support for changes coming from the governor and members of the General Assembly. When asked about the bill at the State Chamber’s End-of-Session Policy Conference, Speaker of the House Melissa Minor-Brown said, “We have to do it right … It can’t be a rush job. It has to be a comprehensive approach.” The State Chamber agrees with this sentiment.

Currently, Delaware has the secondhighest top personal income tax rate among neighboring states — behind only New Jersey, with a 10.75% rate. Maryland’s top rate is 5.75% and Pennsylvania’s is a flat rate of 3.07%. Despite changes in administration and challenging economic circumstances, Delaware’s top rate has remained below 7% for about 20 years to attract investment, jobs, and talent.

Currently, Delaware has the secondhighest top personal income tax rate among neighboring states — behind only New Jersey, with a 10.75% rate. Maryland’s top rate is 5.75% and Pennsylvania’s is a flat rate of 3.07%. Despite changes in administration and challenging economic circumstances, Delaware’s top rate has remained below 7% for about 20 years to attract investment, jobs, and talent.