CHAPTER 325

FORMERLY

HOUSE BILL NO. 700

AN ACT ENTITLED "THE TAX-RELATED JOB CREATION AND ECONOMIC DEVELOPMENT ACT OF 1984," WHICH AMENDS CHAPTER 11, TITLE 30 OF THE DELAWARE CODE, AND RELATES TO THE FURTHER REDUCTION IN PERSONAL INCOME TAXES AT THE HIGHEST RATES TO STIMULATE AN INCREASE IN FULL TIME EMPLOYMENT IN THE STATE.

WHEREAS, the current level of the maximum rates of Delaware's personal income tax, which are the second highest in the nation, places the State in a competitive disadvantage in the attraction of new business and new investment creating new job opportunities and deters the expansion of existing business; and

WHEREAS, the current maximum rates discourage decision makers from the location of new plants and investment in the State; and will force Delawareans to go out of this State to seek employment because of the lack of job opportunities; and

WHEREAS, the current maximum rates encourage management executives and other employees of existing Delaware businesses to establish residences outside the State thus causing a loss not only of income to the State but also of their social, cultural, and educational contributions; and

WHEREAS, the current maximum rates overshadow Delaware's favorable real estate; corporate and business tax rates and the absence of a regressive sales tax; and

WHEREAS, the General Assembly recognizes the need to increase employment opportunities;

WHEREAS, this Act will encourage the location of new businesses and expansion of existing businesses in the State resulting in new jobs;

WHEREAS, during a period of relatively stable growth since 1975 the State has experienced an average increase in full time employment opportunity of 4,500 Jobs per year as indicated by the following schedule:

 

Total

Employment

Annual

Change

Rolling 3 Year Average

1975

229.9

   

1976

236.7

6,800

 

1977

238.8

2,100

 

1978

247.8

9,000

5,966

1979

256.7

8,900

6,666

1980

259.2

2,500

6,800

1981

259.2

 

3,800

1982

259.2

 

833

1983

266.1

6,900

2,300

WHEREAS, an average increase in full time employment of 6,000 jobs per year, an annual increment of growth 33 1/3% greater than the average from 1975 to 1983, would create a significant increase in Job opportunities for the people of this State;

NOW, THEREFORE:

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

Section 1. This Act may be referred to as "The Tax-Related Job Creation and Economic Development Act of 1984".

Section 2. Amend subsection (a), Section 1102, Title 30 of the Delaware Code by striking paragraph "(2)" thereof and substituting the following new paragraph "(2)" in lieu thereof:

"(2) For taxable years beginning after December 31, 1984, the amount of tax shall be determined as follows:

1.3% of the amount of taxable income not in excess of $1,000; 1.8% of the amount of taxable income in excess of $1,000, but not in excess of $2,000; 2.7% of the amount of taxable income in excess of $2,000, but not in excess of $3,000; 3.8% of the amount of taxable income in excess of $3,000, but not in excess of $4,000; 4.7% of the amount of taxable income in excess of $4,000, but not in excess of $5,000; 5.6% of the amount of taxable income in excess of $5,000, but not in excess of $6,000; 6.5% of the amount of taxable income in excess of $6,000, but not in excess of $8,000; 7.2% of the amount of taxable income in excess of $8,000, but not in excess of $10,000; 7.4% of the amount of taxable income in excess of $10,000, but not in excess of $15,000; 7.6% of the amount of taxable income in excess of $15,000, but not in excess of $20,000; 7.9% of the amount of taxable income in excess of $20,000, but not in excess of $25,000; 8.5% of the amount of taxable income in excess of $25,000, but not in excess of $30,000; 9.9% of the amount of taxable income in excess of $30,000, but not in excess of $40,000; 10.7% of the amount of taxable income in excess of $40,000."

Section 3. Amend Section 1102, Title 30 of the Delaware Code by redesignating subsection "(c)" as subsection "(d)".

Section 4. Amend Section 1102, Title 30 of the Delaware Code by adding a new subsection "(c)" to read as follows:

"(c) Employment Increase Requirement

The tax rates established by subsection (a)(2) shall be revoked effective January 1, 1988 unless the Secretary of Labor has, on or before June 10, 1987, made a written determination, submitted to the Governor, Speaker of the House and President Pro-Tempore of the Senate, that the total full time equivalent employment in the State as regularly reported by the State Department of Labor has averaged an annual increase of 6,000 full time equivalent Jobs in nonagricultural wage and salary employment as reported by the Delaware Department of Labor during the period from June 1, 1984 through May 31, 1987. Once the condition of this subsection (c) has been satisfied, there shall be no revocation of the subsection (a)(2) rates by reason of this subsection (c). In the event of any revocation of the subsection (a)(2) rates by reason of this subsection (c), the following rates shall become effective:

1.3% of the amount of taxable income not in excess of $1,000; 1.8% of the amount of taxable income in excess of $1,000, but not in excess of $2,000; 2.7% of the amount of taxable income in excess of $2,000, but not in excess of $3,000; 3.8% of the amount of taxable income in excess of $3,000, but not in excess of $4,000; 4.7% of the amount of taxable income in excess of $4,000, but not in excess of $5,000; 5.6% of the amount of taxable income in excess of $5,000, but not in excess of $6,000; 6.5% of the amount of taxable income in excess of $6,000, but not in excess of $8,000; 7.2% of the amount of taxable income in excess of $8,000, but not in excess of $10,000; 7.4% of the amount of taxable income in excess of $10,000, but not in excess of $15,000; 7.6% of the amount of taxable income in excess of $15,000, but not in excess of $20,000; 7.9% of the amount of taxable income in excess of $20,000, but not in excess of $25,000; 8.5% of the amount of taxable income in excess of $25,000, but not in excess of $30,000; 9.9% of the amount of taxable income in excess of $30,000, but not in excess of $40,000; 11.0% of the amount of taxable income in excess of $40,000, but not in excess of $50,000; 12.2% of the amount of taxable income in excess of $50,000."

Approved July 2, 1984.