Bill Seeking to Raise $150 Million by Hiking Business Fees Advances

April 18, 2026

Delaware House Republican Caucus

A bill to increase a host of fees imposed on businesses incorporated in Delaware, collectively raising more than $150 million in new annual income for the state, cleared the House Administration Committee this week.

Sponsored by House Democratic Leader Kerri Evelyn Harris (D-Dover East) and Senate Democratic Leader Bryan Townsend (D-Newark, Bear), House Bill 400 would raise annual fees paid by Limited Liability Corporations and other "Alternative Entities," as well as the fees associated with various services provided by the Division of Corporations.

In an earlier statement justifying the proposal, Rep. Evelyn-Harris said the state is running short of funds and needs the money. "That means reviewing every revenue source and expenditure in our state with a fine-toothed comb, and making changes where they make sense and where they won’t hurt our residents and the businesses."

The State of Delaware gets more than a third of its annual revenue from income tied to its top national position as a business-friendly incorporation venue. The strength of the Court of Chancery, which adjudicates business lawsuits, has also been a draw for corporations to establish their legal residence here.

Committee member, State House Republican Leader Tim Dukes (R-Laurel), questioned the wisdom of imposing higher fees on corporations, noting the state's slipping standing in the business community and the rising threat posed by Texas and Nevada, which are actively trying to unseat Delaware as the premier incorporation destination.

Despite the objections, HB 400 was released from committee on a 3-2 vote along party lines.

The day before Wednesday's committee action, Newsmax posted an article lending credence to Rep. Dukes's concerns:

"A tsunami of corporate departures continues to hit Delaware as more than 60 public companies with a combined market cap of over $3 trillion have quit the state in the past two years alone. In just the past week, two significant public companies — FirstCash Holdings and GPGI Inc. — have announced plans to leave Delaware, underscoring what many analysts now describe as a corporate exodus.

FirstCash Holdings (NASDAQ: FCFS), a $9 billion market cap company, filed plans with shareholders to reincorporate in Texas. The move, the company said, is driven by a desire for 'more clarity and predictability' in legal matters, along with efforts to reduce 'opportunistic and frivolous litigation.'"

To many observers, the article accurately illustrated the problem of "DExit," the term coined for the recent corporate flight from Delaware.

While there are about 2.3 million businesses incorporated in Delaware, the lion's share of the state's revenue comes from a comparatively small number of high-value companies, like those that have recently chosen to incorporate in competing states.

A significant reduction in Delaware's corporate revenue stream, valued at $2.5 billion to $3 billion annually, would affect everyone, as elected officials would face a no-win dilemma: cut services to reduce spending or raise other taxes and fees to cover the lost income.

Debate Continues Over Proposal to Ban Credit Card Fee on Tips

Whenever someone uses a credit card to pay a bill, the credit card company charges a fee (typically between 2% and 3% of the transaction cost) to process the payment. A controversial bill to change that in a single narrow instance has sparked a heated, ongoing debate between supporters and detractors.

House Bill 315 would prohibit credit card companies from charging processing fees on tips. It has been released from committee and is on the House Ready List, awaiting consideration of the chamber.

The Delaware Restaurant Association supports the passage of this bill. From the perspective of restaurant owners, they are currently paying processing fees on tips, which is money they do not receive as revenue. That is a high cost in an industry with extremely thin profit margins that has never fully recovered from the pandemic and continues to struggle.

"Every single day, restaurant owners are forced to watch thousands of dollars disappear in unnecessary fees on tips," stated a recent post from the Delaware Restaurant Association. "This isn’t just a small inconvenience—it’s money that should be supporting hardworking staff and the businesses that employ them."

Under Delaware law, restaurants cannot deduct transaction fees from their workers' tips.

The banking and credit card industries oppose the measure. Assuming a typical restaurant patron pays his bill with a credit card and adds a 20% tip, credit card companies would lose roughly one-sixth of their revenue on such transactions if the bill were signed into law.

The Electronic Payments Coalition (EPC), a trade group representing the institutions and networks that form the backbone of the nation’s electronic payments system, has launched a public lobbying campaign to pressure lawmakers to withdraw their support. At the moment, the measure is unusually popular, with broad bipartisan backing. Thirty-eight of the legislature's 62 members are sponsoring or co-sponsoring the bill.

The coalition says enacting the law would require systemic changes to credit transaction networks and warned that credit card companies may bar the use of their cards to pay tips. One social media ad posted by the group said that if the proposal becomes law, "credit & debit cards may not work for tips—risking the incomes of tipped workers."

While similar proposals have reportedly been made in more than two dozen states, only one, Illinois, has enacted it.

Even there, the matter remains unsettled. The Illinois Bankers Association et al. is challenging the constitutionality of the law in an appeal before the U.S. Court of Appeals for the Seventh Circuit.

Bill Seeks to Curtail High-Tech Car Theft

Car thieves are increasingly using advanced technology to clone vehicle key fobs, a method particularly effective against newer models equipped with "push-to-start" ignition systems. 

State Rep. Jeff Hilovsky is co-sponsoring a new bipartisan bill authored by State Rep. Franklin Cooke (D-Wilmington South, New Castle) to crack down on this type of theft.

House Bill 351 would make it a crime to manufacture, sell, or possess a vehicle key programming device, or any other apparatus, or computer program intended to intercept a key fob signal, or electronically unlock or start a motor vehicle.

The bill banning the sale or use of "vehicle security circumvention technology" would not apply to lawful and reasonable actions, such as tasks performed by police officers, vehicle dealers and distributors, locksmiths, and repossession agencies.

First-time offenders would face a fine of up to $115 and 90 days in jail. Those committing subsequent offenses would face a maximum fine of $230 and 6 months behind bars.

The measure is pending consideration in the House Public Safety & Homeland Security Committee. bill to increase a host of fees imposed on businesses incorporated in Delaware, collectively raising more than $150 million in new annual income for the state, cleared the House Administration Committee this week.

Sponsored by House Democratic Leader Kerri Evelyn Harris (D-Dover East) and Senate Democratic Leader Bryan Townsend (D-Newark, Bear), House Bill 400 would raise annual fees paid by Limited Liability Corporations and other "Alternative Entities," as well as the fees associated with various services provided by the Division of Corporations.

In an earlier statement justifying the proposal, Rep. Evelyn-Harris said the state is running short of funds and needs the money. "That means reviewing every revenue source and expenditure in our state with a fine-toothed comb, and making changes where they make sense and where they won’t hurt our residents and the businesses."

The State of Delaware gets more than a third of its annual revenue from income tied to its top national position as a business-friendly incorporation venue. The strength of the Court of Chancery, which adjudicates business lawsuits, has also been a draw for corporations to establish their legal residence here.

Committee member, State House Republican Leader Tim Dukes (R-Laurel), questioned the wisdom of imposing higher fees on corporations, noting the state's slipping standing in the business community and the rising threat posed by Texas and Nevada, which are actively trying to unseat Delaware as the premier incorporation destination.

Despite the objections, HB 400 was released from committee on a 3-2 vote along party lines.

The day before Wednesday's committee action, Newsmax posted an article lending credence to Rep. Dukes's concerns:

"A tsunami of corporate departures continues to hit Delaware as more than 60 public companies with a combined market cap of over $3 trillion have quit the state in the past two years alone. In just the past week, two significant public companies — FirstCash Holdings and GPGI Inc. — have announced plans to leave Delaware, underscoring what many analysts now describe as a corporate exodus.

FirstCash Holdings (NASDAQ: FCFS), a $9 billion market cap company, filed plans with shareholders to reincorporate in Texas. The move, the company said, is driven by a desire for 'more clarity and predictability' in legal matters, along with efforts to reduce 'opportunistic and frivolous litigation.'"

To many observers, the article accurately illustrated the problem of "DExit," the term coined for the recent corporate flight from Delaware.

While there are about 2.3 million businesses incorporated in Delaware, the lion's share of the state's revenue comes from a comparatively small number of high-value companies, like those that have recently chosen to incorporate in competing states.

A significant reduction in Delaware's corporate revenue stream, valued at $2.5 billion to $3 billion annually, would affect everyone, as elected officials would face a no-win dilemma: cut services to reduce spending or raise other taxes and fees to cover the lost income.

Debate Continues Over Proposal to Ban Credit Card Fee on Tips

Whenever someone uses a credit card to pay a bill, the credit card company charges a fee (typically bewteen 2% and 3% of the transaction cost) to process the payment. A controversial bill to change that in a single narrow instance has sparked a heated, ongoing debate between supporters and detractors.

House Bill 315 would prohibit credit card companies from charging processing fees on tips. It has been released from committee and is on the House Ready List, awaiting consideration of the chamber.

The Delaware Restaurant Association supports the passage of this bill. From the perspective of restaurant owners, they are currently paying processing fees on tips, which is money they do not receive as revenue. That is a high cost in an industry with extremely thin profit margins that has never fully recovered from the pandemic and continues to struggle.

"Every single day, restaurant owners are forced to watch thousands of dollars disappear in unnecessary fees on tips," stated a recent post from the Delaware Restaurant Association. "This isn’t just a small inconvenience—it’s money that should be supporting hardworking staff and the businesses that employ them."

Under Delaware law, restaurants cannot deduct transaction fees from their workers' tips.

The banking and credit card industries oppose the measure. Assuming a typical restaurant patron pays his bill with a credit card and adds a 20% tip, credit card companies would lose roughly one-sixth of their revenue on such transactions if the bill were signed into law.

The Electronic Payments Coalition (EPC), a trade group representing the institutions and networks that form the backbone of the nation’s electronic payments system, has launched a public lobbying campaign to pressure lawmakers to withdraw their support. At the moment, the measure is unusually popular, with broad bipartisan backing. Thirty-eight of the legislature's 62 members are sponsoring or co-sponsoring the bill.

The coalition says enacting the law would require systemic changes to credit transaction networks and warned that credit card companies may bar the use of their cards to pay tips. One social media ad posted by the group said that if the proposal becomes law, "credit & debit cards may not work for tips—risking the incomes of tipped workers."

While similar proposals have reportedly been made in more than two dozen states, only one, Illinois, has enacted it.

Even there, the matter remains unsettled. The Illinois Bankers Association et al. is challenging the constitutionality of the law in an appeal before the U.S. Court of Appeals for the Seventh Circuit.

Bill Seeks to Curtail High-Tech Car Theft

Car thieves are increasingly using advanced technology to clone vehicle key fobs, a method particularly effective against newer models equipped with "push-to-start" ignition systems. 

State Rep. Jeff Hilovsky is co-sponsoring a new bipartisan bill authored by State Rep. Franklin Cooke (D-Wilmington South, New Castle) to crack down on this type of theft.

House Bill 351 would make it a crime to manufacture, sell, or possess a vehicle key programming device, or any other apparatus, or computer program intended to intercept a key fob signal, or electronically unlock or start a motor vehicle.

The bill banning the sale or use of "vehicle security circumvention technology" would not apply to lawful and reasonable actions, such as tasks performed by police officers, vehicle dealers and distributors, locksmiths, and repossession agencies.

First-time offenders would face a fine of up to $115 and 90 days in jail. Those committing subsequent offenses would face a maximum fine of $230 and 6 months behind bars.

The measure is pending consideration in the House Public Safety & Homeland Security Committee.