More financial service companies could expand into Delaware thanks to a tax incentive bill signed into law by Gov. Ruth Ann Minner on July 22.
Senate Bill 213 creates new tax rules for asset management corporations, letting the companies choose to pay taxes based on gross receipts instead of property, wages and sales.
Asset management corporations are defined in the bill as companies that receive at least 90 percent of gross receipts from advising clients about intangible assets.
Defining asset management corporations and freeing them from an onerous tax system will help attract more corporations to Delaware, said Judy McKinney-Cherry, director of the Delaware Economic Development Office.
“Senate Bill 213, the asset management corporations’ legislation, is a testament to Delaware’s agility, Delaware’s spirit of cooperation and ability to modernize our laws to remain competitive,” said McKinney-Cherry, during the bill signing ceremony at the office of BlackRock, Inc., in the Bellevue Corporate Center.
Financial services are a vital part of the state’s economy, with dozens of financial firms relocating or expanding to Delaware since the Financial Center Development Act became law in 1981, she said.
More than 30,000 jobs have been created because of that act and Senate Bill 213 promises to create hundreds more, said McKinney-Cherry.
Because of the new tax rules, BlackRock, Inc., a nationwide investment management firm, plans to hire at least 300 new employees at its Wilmington office by 2010, said Susan Wagner, BlackRock’s vice chairman and chief operating officer.
Those jobs are important because they offer high wages and will directly benefit the state’s economy, said Minner. BlackRock contributed $22.3 million to Delaware’s economy last year, she said, and they are the type of business the state wants to see grow.
The company opened its office in the Bellevue Corporate Center in 2001 and chose to expand in Delaware partly because of the state’s cooperative business climate, said Wagner.
More than 60 percent of Fortune 500 companies are incorporated in Delaware and the state has the best legal environment for business, according to the U.S. Chamber of Commerce.
Delaware’s tax laws are not lax, but they help businesses succeed and legislators work with corporations to get things done quickly, said Richard Davis, managing director of BlackRock.
He said he is excited to see the company expand and enthusiastic about the bill's ability to help Delaware's business sector grow.
Senate Bill 213 ought to keep the state competitive as a place to do business, said Gov. Minner, benefiting companies, employees and customers who take advantage of asset management services.
“Delaware will open its doors to a new economic sector, there is no doubt about that,” she said.
