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HB 255

LEASES: Provides relative to application fees paid for leasing residential property

2025 Regular Session Introduced by Denise Marcelle

House Bill 255 modifies Delaware's tax code, allowing businesses to expense research costs and decoupling from federal rules, boosting investment and economic growth.

Withdrawn prior to introduction.
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Bill Summary · HB 255

Summary of House Bill 255

Bill Number: HB 255
Title: An Act to Amend Title 30 of the Delaware Code Relating to Corporate and Personal Income Tax
Status: Reported Out of Committee (Administration) in House with 3 On Its Merits
Introduced: November 05, 2025
Sponsors:
- Rep. Kerri Evelyn Harris
- Sen. Bryan Townsend
- Rep. Edward S. Osienski
- Additional sponsors include various representatives and senators from Delaware.

Purpose and Intent

House Bill 255 aims to amend Delaware's corporate and personal income tax laws by decoupling certain provisions from the federal "One Big Beautiful Bill Act" (OBBBA). This legislative action is intended to modify the timing of deductions related to depreciation and expensing of business property, ensuring that Delaware's tax code remains favorable for businesses operating within the state.

Key Provisions

The bill includes several significant changes to the Delaware tax code:

For Corporations (C Corporations)

  1. Continued Expensing for Research and Experimental Expenditures:

    • Allows corporations to continue expensing domestic research and experimental expenditures made after December 31, 2021, but before December 31, 2025, under the pre-OBBBA provisions.

  2. Decoupling from Full Expensing Provisions:

    • Decouples from the OBBBA provision that allows full expensing for certain business property acquired and placed in service after January 19, 2025.

  3. Decoupling from Special Depreciation Allowance:

    • Decouples from the special depreciation allowance for qualified production property.

For Individuals (S Corporations and Partnerships)

  1. Decoupling from Full Expensing for Business Property:

    • Effective January 1, 2026, individuals with business income will be decoupled from the OBBBA allowance for full expensing of certain business property acquired and placed in service after December 31, 2025.

  2. Decoupling from Special Depreciation for Qualified Production Property:

    • Similar to corporations, individuals will also be decoupled from the special depreciation allowance for qualified production property acquired and placed in service after December 31, 2025.

Impact

  • Affected Parties: The bill primarily impacts corporations and individuals engaged in business activities in Delaware, particularly those involved in research, experimental expenditures, and production.
  • Tax Planning: By modifying the timing of deductions, the bill provides businesses with more flexibility in tax planning and may encourage investment in research and development within the state.

Procedural Aspects

  • Effective Dates:

    • Provisions in Section 1 of the bill are effective upon enactment and apply to tax years beginning on or after January 1, 2022.
    • Provisions in Section 2 will take effect on January 1, 2026.

  • Severability Clause: The bill includes a severability clause, ensuring that if any provision is found invalid, the remaining provisions will still be enforceable.

Conclusion

House Bill 255 represents a strategic adjustment to Delaware's tax code, aimed at maintaining a competitive environment for businesses while aligning state tax policy with the needs of local corporations and individuals. The decoupling from certain federal provisions allows for continued support of research and production activities, which are vital for economic growth in Delaware.

Compiled from official sources — confirm details with the bill’s official record.

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