Reminder: Delaware's tax system is weird - Delaware


Jul. 3, 2017 11:30 am

Reminder: Delaware’s tax system is weird

A column from the Inquirer's Joe DiStefano paints the picture.
A rendering of cables under a raised floor at CSC’s new HQ.

A rendering of cables under a raised floor at CSC's new HQ.

(Courtesy image)

Let this serve as a periodic reminder that Delaware state government is unique — strange, even.

Corporate fees from companies that use Delaware as their legal home “make up 25 to 30 percent of our tax base,” making it possible for Delaware to avoid imposing a retail sales tax — unlike Pennsylvania, New Jersey, or Maryland. (Delaware, like Philadelphia, does impose a gross-receipts tax on retailers — a sales tax consumers don’t see when they patronize stores in “the Home of Tax-Free Shopping.”) Most of the state also lacks municipal government, and school districts are regional, not town-based, which helps keep property taxes a fraction of what owners pay in suburban Pennsylvania and New Jersey.

The above comes from a @PhillyJoeD riff on Gov. John Carney’s appearance at the ribbon-cutting of CSC’s new digs. (We had a story a few weeks ago about the company’s official rebranding.)

This other bit is good, too, but you should really read the whole thing:

Delaware has more corporations, partnerships, subsidiaries, and other business entities (more than a million) than people (it’s about as populous as Montgomery County or Northeast Philadelphia). Most are “foreign” corporations — companies actually based in other states, or countries. They incorporate under Delaware law so they can send finance and ownership disputes to its business-friendly, precedent-setting Court of Chancery, to take advantage of its intellectual-property income-tax exemptions, and to use other pro-corporate laws routinely updated by a business-friendly legislature, even under the currently dominant Democrats.

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