This Week in Dover

By Evan R. Park

If you operate a business in Delaware, two new bills could directly impact your costs, compliance obligations, and day-to-day operations. House Bill 400 and House Bill 380 stand to affect businesses of all sizes, from startups to large multi-entity organizations.

The Delaware State Chamber of Commerce is actively monitoring​ both bills.

House Bill 400: Increased Fees for Business Filings and Compliance
House Bill 400, introduced by Rep. Kerri Evelyn-Harris, proposes a broad increase in fees collected by the Delaware Secretary of State. These changes affect nearly every type of business entity registered in Delaware, including corporations, LLCs, partnerships, statutory trusts, and trademark holders.

What’s Changing
1. Higher Annual Taxes (Effective January 1, 2026)

• LLCs, limited partnerships, and general partnerships will see annual taxes increase from $300 to $400
• Businesses with registered series will pay $100 per series, up from $75

2. Increased Filing Fees (Effective August 1, 2026)
Routine business filings will become more expensive, including:

• Forming new corporations
• Requesting certified copies
• Conducting record searches
• Preclearing documents

3. Trademark Fee Increases

• Filing, renewing, or transferring a trademark will cost $100 per transaction

4. Higher Expedited Service Costs

• Expedited processing fees will increase significantly, with top-tier services reaching up to $10,000 in addition to standard filing fees

5. Service of Process Fee Increase

• The fee doubles from $50 to $100 and will apply uniformly across all entity types

Why This Matters
Delaware’s reputation as a premier state for business formation is built on efficiency and cost-effectiveness. These increases may shift that value equation for companies that manage multiple entities or series structures, rely heavily on frequent filings, use expedited processing services and/or actively maintain trademarks.

Even smaller businesses may feel the impact through higher annual taxes and increased administrative costs. Startups and companies operating on tight margins may need to adjust financial planning sooner than expected.

What Businesses Should Do Now
With some changes already in effect and others arriving in 2026, businesses should begin preparing by:

• Reviewing current and projected compliance costs
• Updating budgets to reflect higher annual taxes
• Reassessing reliance on expedited filing services
• Evaluating the structure and number of registered entities

House Bill 380: Expanding Delaware’s Data Privacy Requirements
House Bill 380 proposes a major expansion of the Delaware Personal Data Privacy Act (DPDPA), significantly broadening which businesses are subject to privacy compliance obligations.

While originally aimed at larger organizations, this update would bring many small businesses into scope.

Who May Be Covered
A business could fall under the law if it:

• Handles data from 10,000 Delaware residents, OR
• Handles data from 5,000 residents and earns 20% or more of revenue from data sales, OR
• Receives personal data from other businesses (directly or indirectly)

In practice, this could include companies using email marketing tools, customer databases, e-commerce platforms, or analytics software.

Why This Matters
1. Expanded Compliance Requirements

• Businesses may need to maintain detailed privacy policies, respond to consumer data requests, and/or track how data is collected, used, and shared

2. Marketing and Advertising Adjustments

• Consumers would gain stronger rights to opt out of targeted advertising, data sales, and certain automated decision-making systems
• This may affect email campaigns, digital ads, and CRM systems.

3. Stricter Data Collection Standards

• Businesses would need to collect only necessary customer data, limit unnecessary form fields, and rethink data retention practices

4. Increased Oversight of Vendors

• Companies would be responsible for ensuring third-party partners meet privacy requirements, including, payment processors, marketing platforms, and cloud storage providers

5. AI and Automation Transparency

• Businesses using automated tools may need to disclose their use, offer opt-outs or human review options, and or assess systems for bias or risk

6. Broader Definition of Sensitive Data

• The bill expands protected data categories to include financial and health information, government IDs, immigration status and gender identity, and behavioral or inferred data

7. Consumer Data Rights

• Consumers would be able to: access, correct, or delete their data; request data portability; and see how their data is shared
• Businesses would need systems to respond to these requests within required timeframes.

Cost and Operational Considerations
While no direct fees are imposed, compliance may require investment in:

• Legal and policy updates
• Privacy management tools
• Staff training
• Vendor oversight systems
• Administrative processes for handling data requests

For small teams, these responsibilities may require meaningful operational adjustments. If enacted, House Bill 380 is expected to take effect around 2027, giving businesses time to prepare. Early planning may be especially important for companies that rely heavily on customer data, operate in e-commerce or digital marketing, and/or use multiple third-party platforms.

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Together, these proposals signal a shift in Delaware’s business and regulatory environment. House Bill 400 increases the cost of maintaining and operating business entities, while House Bill 380 expands the responsibilities associated with handling consumer data.

For Delaware businesses, the key theme is clear: compliance expectations are rising, and preparation will be essential.

The Delaware State Chamber of Commerce will continue to monitor both bills and advocate for a balanced approach that supports consumer protection while maintaining a competitive and business-friendly environment in the First State.

A Note on Legislative Change
In related news, State Representative Debra Heffernan has announced she will not seek reelection after 16 years of service representing the 6th District in northern New Castle County. During her tenure, she supported a range of policy initiatives including disability services, reproductive rights, juvenile justice reform, paid parental leave for state employees, marriage equality, and climate legislation.

Her departure marks a transition in leadership as Delaware continues to evolve its legislative priorities and business landscape.