SPONSOR:	Rep. Kovach & Rep. Lavelle & Sen. Booth;
	Reps. D. Short, Briggs King, Hocker, Hudson, Lee, Manolakos, Ramone, Wilson, Bennett, B. Short, Q. Johnson; Sens. Sorenson, Bonini

HOUSE OF REPRESENTATIVES

145th GENERAL ASSEMBLY

HOUSE BILL NO. 495

AN ACT TO AMEND TITLE 30 OF THE DELAWARE CODE RELATING TO GROSS RECEIPTS TAXES.

WHEREAS, the Gross Receipts Tax was increased by 8% effective July 2009; and

WHEREAS, the Gross Receipts Tax places a significant burden on businesses operating in Delaware; and

WHEREAS, a strategy was developed, but not yet implemented, last fiscal year to reduce State employment through attrition; and

WHEREAS, the State can achieve efficiencies and reduce present and future obligations, while allowing businesses to keep more of their earned revenue; and

WHEREAS, a reduction of less than 1.7% of the State workforce, representing 500 State positions, can be achieved by not rehiring the small percentage of State workers leaving the State workforce on a rolling basis and produce $13 million in savings; and

WHEREAS, a 6.7% reduction in Gross Receipts Tax is designed to allow businesses in Delaware to retain $13 million more of their earnings.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend § 2301(d)(1), Title 30, Delaware Code, by striking the figure “0.4147%” as it appears therein and inserting in lieu thereof the figure “0.3869%”.

Section 2. Amend § 2502(c)(1), Title 30, Delaware Code, by striking the figure “0.6739%” as appears therein and inserting in lieu thereof the figure “0.6287%”.

Section 3. Amend § 2702(b)(1), Title 30, Delaware Code, by striking the figure “0.1944%” as it appears therein and inserting in lieu thereof the figure “0.1814%”.

Section 4. Amend § 2703(c)(1), Title 30, Delaware Code, by striking the figure “0.1458%” as it appears therein and inserting in lieu thereof the figure “0.1360%”.

Section 5. Amend § 2902(c)(1), Title 30, Delaware Code, by striking the figure “0.4147%” as it appears therein and inserting in lieu thereof the figure “0.3869%”.

Section 6. Amend § 2902(c)(3), Title 30, Delaware Code, by striking the figure “0.2592%” as it appears therein and inserting in lieu thereof the figure “0.2418%”.

Section 7. Amend § 2903(c)(1), Title 30, Delaware Code, by striking the figure “0.2074%” as it appears therein and inserting in lieu thereof the figure “0.1935%”.

Section 8. Amend § 2904(c)(1), Title 30, Delaware Code, by striking the figure “0.1037%” as it appears therein and inserting in lieu thereof the figure “0.096%”.

Section 9. Amend § 2905(b)(1), Title 30, Delaware Code, by striking the figure “0.7776%” as it appears therein and inserting in lieu thereof the figure “0.7255%”.

Section 10. Amend § 2905(g), Title 30, Delaware Code, by striking the figure “0.7776%” as it appears therein and inserting in lieu thereof the figure “0.7255%”.

Section 11. Amend § 2906(c)(1), Title 30, Delaware Code, by striking the figure “0.6739%” as it appears therein and inserting in lieu thereof the figure “0.6287%”.

Section 12. Amend § 2907(c)(1), Title 30, Delaware Code, by striking the figure “0.1037%” as it appears therein and inserting in lieu thereof the figure “0.096%”.

Section 13. Amend § 2908(c), Title 30, Delaware Code, by striking the words and figures “the rate of 0.3402% of the first $2 million per month and 0.6372% thereafter” as they appear therein and inserting in lieu thereof the words and figures “the rate of 0.3174% of the first $2 million per month and 0.5945% thereafter”.

Section 14. Amend § 4302(a), Title 30, Delaware Code, by striking the figure “2.0736%” as it appears therein and inserting in lieu thereof the figure “1.9346%”.

Section 15. Amend § 4302(b), Title 30, Delaware Code, by striking the figure “2.0736%” as it appears therein and inserting in lieu thereof the figure “1.9346%”.

Section 16. Amend § 4305, Title 30, Delaware Code by striking the figure “0.3110%” as it appears in subsection (b) and inserting in lieu thereof the figure “0.2901%”.

Section 17. This Act shall be effective for taxable periods beginning after December 31, 2010.

SYNOPSIS

This Act decreases certain business and occupational tax rates, known as gross receipt taxes, by 6.7% across the board. The reduction is funded by a reduction in the State workforce by 500 positions, through attrition, implemented on a rolling basis. The $13 million in savings resulting from workforce reduction covers the 6.7% Gross Receipts tax reduction, valued at $13 million. Additional State revenue is expected as a result of businesses having an additional $13 million to put back into the economy.