DOVER, Del. - Governor Matt Meyer has signed House Bill 255, legislation designed to maintain state revenue by separating parts of Delaware’s tax code from recent federal tax changes. The bill aims to avoid a projected loss of more than $400 million over the next three years tied to new federal deductions for corporations.
The legislation responds to provisions in the federal “One Big Beautiful Bill Act,” which allows companies to immediately deduct the full cost of research and property investments instead of spreading those deductions over time. According to Delaware’s Economic and Financial Advisory Council, these changes would significantly reduce the state’s taxable corporate income.
“This is a perfect example of the government working together swiftly to make sure hard-working Delawareans are protected, and families don’t bear the costs of unanticipated federal tax changes intended to benefit large, out-of-state businesses,” Governor Meyer said.
Without action, estimates projected revenue reductions of $222.8 million in fiscal year 2026, $107.4 million in 2027, and $79.9 million in 2028 said a Senate release.
“Our efforts to decouple are simply an effort to retain the revenues we’ve already budgeted in a way that will have a minimal impact on the vast majority of Delaware businesses," said Sen. Bryan Townsend, the bill’s prime sponsor.
Legislators said HB 255 would primarily impact businesses conducting research and development or those with more than $4 million in new business assets.
However, Senate Republican Whip Brian Pettyjohn referred to this legislation as a "mistake."
"We should be doing all we can to create an economic environment where businesses located here and invest here can thrive. HB255 is yet another piece of legislation, and now law, that does the opposite. The provisions included in the federal law would have driven economic growth," said Pettyjohn.
Rep. Kerri Evelyn Harris, the bill’s House sponsor, said the legislation is intended to preserve funding for state programs.
“If we failed to decouple, we would be silently allowing large corporations to pull critical funding away from the services that keep our state strong. Instead, we chose to act. A stable budget is good for business and good for the people of Delaware, because it protects the schools, public safety, and community services that make this state a place where families can thrive and businesses can grow."
HB 255 was passed by the House Nov. 13, the Senate on Nov. 19 and with the governor’s signature, the bill takes effect immediately.
