HB 235 Summary

• Implements annual inflation adjustment of tax thresholds and filing frequency requirements using Consumer Price Index, effective for tax periods beginning after December 31, 2016, with adjustments published by October 15 each year.

• Modifies corporate income apportionment by gradually shifting from equally-weighted three-factor method (property, payroll, sales) to sales-factor-only apportionment between 2017-2020, reducing tax disincentives for property and payroll investments in Delaware.

• Allows telecommunications corporations and worldwide headquarters corporations (with Delaware headquarters and $25 million capital investment) to elect between sales-factor-only or three-factor apportionment annually starting in 2017.

• Doubles gross receipts tax and withholding filing thresholds (e.g., from $3,600 to $4,500; from $20,000 to $25,000) to reduce compliance burden for small businesses, enabling quarterly instead of monthly filings.

• Permits small corporations with under $20 million in gross receipts to use simplified 25% quarterly estimated tax payment schedule instead of the standard 50%-20%-20%-10% schedule.