Sussex County Council discussed the potential for a two-tiered tax system at its May 6 budget workshop.
If carried out, it would increase property taxes for out-of-state residents with homes in Delaware.
The first step is to have the council’s attorney weigh in to see if implementing a two-tiered tax system is unconstitutional, according to Council Vice President John Rieley.
“It's not worth spending any time unless the state legislature wants to get involved with it,” Rieley said. “But other states like Florida do that, and it seems to benefit them.”
If Council decides to go forward, it would have to seek the General Assembly's approval.
Rieley said an increase in taxes for these folks could potentially ease some financial strain for schools, EMS or fire companies.
Council member Jane Gruenebaum said some vacation homes sit empty while others are rented out, generating income for the owners but using county and municipal services.
“In this instance, I think people who come here and use our resources, whether it's our beaches or our emergency services or fire services or any other sewer and water facilities – whatever it may be – having a different tax level makes sense because that's part of covering basic, fundamental costs,” Gruenebaum said.
Gruenebaum said she and other council members are interested in exploring the idea.
“Let's learn more about its impact. Let's learn more about how it would be carried out,” Gruenebaum said.
This isn’t the first time Sussex County Council has considered a two-tiered tax system. Rieley said he’s unsure how much will there is on Council to bring the system to fruition.
“It's a kernel of an idea that's really in its infancy. If it ever goes anywhere, it's hard to predict,” Rieley said.
