Delaware ranks third in corporate tax climate study

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Delaware ranks among the top three states nationwide for its corporate tax climate, according to a new report by the Tax Foundation and KPMG.

The Delaware Prosperity Partnership and the Delaware Business Roundtable served on the advisory committee for a national study conducted by the Tax Foundation and KPMG to rank corporate tax favorability across the nation.

Click here for the full report

The report, Location Matters, assesses the corporate tax burden in two categories of cities – major and mid-sized – throughout all 50 states, accounting for the wide range of tax impacts faced by businesses such as property tax, income tax, sales tax and others. The study compared the full tax burden faced by businesses in all 50 states.

The report ranks states within eight business models: Corporate Offices; Research & Development; Tech Centers; Data Centers; Distribution Centers; Capital-Intensive Manufacturing; Labor-Intensive Manufacturing; and Shared Services. It also provides overall ratings that combine all business models cited.

“Delaware is a great place for businesses large and small to put down roots, grow and create good- paying jobs,” said Gov.John Carney, co-chair of the DPP Board of Directors. “This Location Matters report underscores our commitment to making sure that Delaware’s tax structure is attractive to small and large businesses that may choose Delaware for growth and expansion.”

DPP Board co-chair Rod Ward, CEO of Delaware-based international business services company CSC, agreed.

“Corporate tax structure is an important variable for businesses considering a new location,” Ward stated, “and the Location Matters report validates an important variable in Delaware’s value proposition for businesses contemplating their next move.”

Overall, Delaware outpaced its neighboring states in the Mid-Atlantic region for most sector types in both the new and mature business categories. Cities were cohorted into one of two categories: Tier 1 cities are major cities in a state, and Tier 2 cities are mid-sized cities usually with a population of less than 50,000. The statewide study ranked each state and highlights each state’s tax favorability performance including their Tier 1 and Tier 2 cities. In Delaware, the two cities ranked in the Location Matters report are Wilmington in the Tier 1 major city category and Dover in the Tier 2 mid-sized city category.

Findings from the nationwide survey reveal:

  • Delaware ranks #2 for overall corporate tax favorability for new firms.
  • Delaware ranks #3 for overall corporate tax favorability for mature firms.
  • Delaware ranks #1 nationwide for tax favorability in the manufacturing sector.
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