Senate Republican Leader Gerald Hocker
For decades, Delaware has been called “The Corporate Capital of the World,” but when it comes to small, brick and mortar businesses that form the backbone of our communities, the First State is falling behind.
Recent rankings make the point clear. CNBC’s 2025 survey of America’s Top States for Business placed Delaware 43rd in business friendliness and 41st in cost of doing business. The Cato Institute ranks us near the bottom in economic freedom. Meanwhile, other states are streamlining regulations, cutting taxes, and encouraging growth. If we want Delaware to remain competitive, we must take a hard look at the policies holding small businesses back.
One of the clearest examples is the gross receipts tax. When it was created in 1967, it was sold as a temporary measure to balance the state’s books without enacting a sales tax. Nearly six decades later, it remains in place, pulling money from business owners before they make a profit. This is not just poor tax policy; it is unfair and discourages growth. Eliminating the gross receipts tax would immediately make Delaware more competitive and attractive for investment.
Another obstacle is our regulatory environment. Delaware has nearly 96,000 regulatory restrictions, more per capita than any other state. Navigating permits, zoning approvals, or occupational licensing often takes months. I often tell people that my wife and I could not do today what we did more than 50 years ago when we first took over my family’s grocery store. The business environment has become so over-regulated that what was once possible for two determined young people is now nearly out of reach for many entrepreneurs.
I remember when I wanted to expand the store. All I had to do was take the plans to the engineers who designed the steel, get them stamped, and then take them to the county for final approval. That was enough to get the green light to start building. Today, that same project would require costly stormwater ponds, multiple permits from different agencies, and months of waiting. For a new business owner or one just beginning to see success, those hurdles can make new construction or expansion impossible.
We see the same problem in other areas, not just construction. Take the recent ban on polystyrene containers and certain plastic straws for example. While the intention may have been good, the reality is that alternatives to these products are more expensive, and the added costs are passed down to consumers. Carveouts in the law protect certain industries, but small restaurants and food establishments bear the heaviest burden. Instead of encouraging growth and affordability, we are layering on rules that stifle innovation and make life more expensive for Delaware families.
The solutions are within reach. The gross receipts tax should be repealed so businesses are not taxed on money they never keep. Allowing deductions for the cost of goods sold and employee compensation would give low-margin industries a chance to compete. Providing exemptions or lower rates for smaller businesses with modest revenues would relieve pressure on the very people who power our local economies.
We should also streamline how businesses interact with state and local government. A single online portal for permits and licenses would eliminate weeks of delay and let new businesses open their doors faster. At the same time, we must take a serious look at occupational licensing. Some requirements make sense for health and safety, but others only serve as barriers to entry. Reducing unnecessary licensing would expand opportunity while still protecting the public.
Beyond tax and regulatory reform, Delaware must invest in the fundamentals. Workforce training programs that partner with local industries will ensure employers have the skilled workers they need. Further expanding broadband access and preparing site-ready land for development will make Delaware more attractive for new and existing businesses. These are practical investments that strengthen our economy from the ground up.
Our economic development strategy should also give greater attention to helping small businesses expand. Other states have shown how targeted incentives and innovation districts can spark growth. Attracting large corporations will always have a place, but Delaware cannot overlook the businesses that employ our neighbors, sponsor local events, and keep our communities vibrant.
Delaware has many advantages, including no sales tax, low property taxes, and a dedicated workforce. But unless we confront the barriers small businesses face every day, we risk losing ground to states that make it easier to do business. As someone who has lived the challenges of running a small business, I believe Delaware can and must do better. By reforming our tax code, cutting red tape, and investing in the fundamentals, we can make the First State a place where small businesses not only survive but thrive for generations to come.