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The 'Location Matters' report ranks Delaware as the No. 3 state in the nation for overall corporate tax favorability for mature firms. The state ranked No. 2 for tax favorability for new firms and No. 1 for favorability for manufacturing.

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

Representatives of 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 United States.

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 comprehensive 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, who is 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.”

Fellow DPP Board co-chair Rod Ward, who is president and chief executive officer of Delaware- headquartered international company CSC, agreed.

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

Dr. Janice Nevin, president and CEO of ChristianaCare and chair of the Delaware Business Roundtable, elaborated.

“Creating long-term, well-paying jobs is a critical part of establishing a growing economy that contributes to the wellbeing of all Delawareans,” Nevin said. “This study confirms that our state is very competitive when it comes to corporate taxes, which helps to provide a good foundation for economic growth. We must also continue to focus on the other variables that are essential to creating job opportunities, including expanded broadband availability, infrastructure improvements, and education and training.”

Location Matters report on corporate tax favorability

The 'Location Matters' report ranks Delaware as the No. 3 state in the nation for overall corporate tax favorability for mature firms.

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.

Key findings from the nationwide survey included:

  • Delaware ranks No. 2 for overall corporate tax favorability for new firms.
  • Delaware ranks No. 3 for overall corporate tax favorability for mature firms.
  • Delaware ranks No. 1 nationwide for tax favorability in the manufacturing sector.