DELAWARE- Lawmakers have introduced legislation aimed at modernizing Delaware’s corporate fee structure, with proposed increases expected to generate more than $150 million annually for the state.
Rep. Kerri Evelyn Harris and Sen. Bryan Townsend introduced House Bill 400. The measure would raise annual fees for limited liability companies and other alternative business entities, while also increasing fees for a range of services provided by the Delaware Division of Corporations.
Delaware is the legal home to more than 2 million business entities, including over 66% of Fortune 500 companies. State officials say fees and taxes collected through the Division of Corporations account for about 37% of the state’s total revenue, or roughly $2.56 billion.
Alternative entities — including general partnerships, limited liability companies, limited partnerships and related structures — currently contribute about 10% of that revenue. Under the proposal, annual fees for general partnerships, LLCs and limited partnerships would rise from $300 to $400. Registered series entities would increase from $75 to $100, while fees for limited liability partnerships and limited liability limited partnerships would increase from $200 to $300 per partner.
The changes would mark the first increase since 2014, and the state expects the changes to generate approximately $150 million in additional revenue each year.
“We are facing a budget deficit. At a time when federal support is uncertain, we must ensure our state resources are sufficient to support Delawareans’ needs,” said Rep. Kerri Evelyn-Harris. “That means reviewing every revenue source and expenditure in our state with a fine-toothed comb, and making changes where they make sense and where they won’t hurt our residents and the businesses that help our state thrive.”
According to the Bureau of Labor Statistics, inflation has risen about 40% since January 2014, meaning the current $300 fee is equivalent to about $417 today.
In addition to entity fees, HB 400 would update a wide range of service fees that have not been adjusted in decades. State documents show that some fees date back to the 1970s and 1990s and no longer reflect the cost of services such as filings, document processing, trademark registration and preclearance reviews.
According to state leaders, these service-related changes are expected to generate an additional $1.75 million annually.
Combined, the bill is projected to add approximately $152 million to Delaware’s General Fund.
“During February’s Joint Finance Committee hearings, we heard compelling cases from our agency partners across the State about their operating budget requests and capital requirements to sufficiently serve the people of Delaware,” said Sen. Trey Paradee, chair of the Joint Finance Committee.
“HB 400 is a responsible way to raise the revenue we need to balance our budget and ensure that we can continue funding the critical services that make Delaware an attractive place to live.”
House Bill 400 has been assigned to the House Administration Committee for further consideration.
