Small Business Reading Room

Wednesday, May 04, 2005

An End to Delaware's Gross Receipts Tax?

Not yet.

For those of you who are unfamiliar with gross receipts tax, the tax is currently imposed on businesses that receive over $600,000 from goods sold or services rendered. Since the tax exemption is so high, many small businesses are unaffected.

According to the article in the News Journal, 85 percent of the tax collected is paid by only 800 of the State's 45,000 companies.

For the second year in a row, Rep. Deborah Hudson, R-Fairthorne, is trying to reduce and eventually eliminate the gross receipts tax. She has introducted legislation that will increase the gross receipts tax exemption to $840,000, costing the State about $51 million per year in revenue.

So why implement a plan to reduce the States revenues by so much?

To make Delaware a more competitive State for larger corporations. If they can benefit from less taxes as well as the other good qualities Delaware has to offer, they will in turn bring more money and jobs to our fair State.

Russell also looks at this issue in his blog.

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Small Business Reading Room

An End to Delaware's Gross Receipts Tax?

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