Delaware’s Tax Incentives & Financing


Delaware Tax Incentives & Financing


Our Cost of Doing Business is 25% Below the U.S. Average

Growing and supporting our businesses is one of our biggest priorities in the First State. That’s why we offer a wide variety of economic development incentives to initiate new investments.

Review our available funds, grants and tax credits below and reach out to Becky Harrington, Director of Business Development, at (302) 576-6577 or bharrington@choosedelaware.com to learn more about eligibility.

  • Financing

    Delaware Strategic Fund

    Purpose

    To advance the state’s economy significantly through job creation, expansion, and relocation of businesses to the state of Delaware. For more information on the Delaware Strategic Initiative Fund and application process please click here.

    In addition, grants and low-interest loans may also be offered to projects on commercially contaminated/worn locations such as Brownfield sites.

    Site Readiness Grants

    Purpose

    The purpose of this incentive program is to ensure Delaware has development site options that will allow communities to compete for investment and job creation opportunities (by new or existing employers).  The aim is to help cultivate a “portfolio of properties” that are ready (or near ready) for development. Applicants can be a private landowner, equitable owner/developer, public entity such as a county or municipality, or utility provider that is developing property or providing necessary services for an area, industrial or business park. Funds are reserved for industrial or office projects. Preference to properties and projects that align with the State’s Strategy Investment Levels 1, 2 and 3. State Investment Level Map.

    Transportation Infrastructure Investment Fund (TIIF)

    Purpose

    TIIF is a new fund established to allow businesses to make roadway infrastructure improvements that will support job-creating projects in Delaware.  The fund will be managed by the Transportation Infrastructure Investment Fund Council, a nine-member council established by the legislation. The council will consider applications and make funding recommendations to Delaware’s Transportation Secretary and the Secretary of State.

    Graduated Lab Space Grants

    Purpose

    The purpose and spirit of this incentive program is to create more “ready-to-go” lab space for companies growing out of space that hampers their ability to continue thriving in Delaware. Targeted companies include early stage and small to medium sized companies that are growing out of their existing space in Delaware, as well as similar companies from outside of the state which are considering relocating or expanding to Delaware. The Agreement will be structured so that both the company receiving the grant and the space owner/lessor are parties to ensure that: 1) the company remains operating in the state for a period of five years; and 2) the owner maintains the improved space as a community asset for the same length of time, regardless of whether the Company Grantee leaves before the end of the five-year term. Eligible applicants may apply for a grant of up to 33% of the fit-out or building costs for the lab space portion of the space (at a rate of up to $150/ft, for a space of up to 20,000 sq ft per company).

    EDGE Grants (Encouraging Development, Growth & Expansion)

    Purpose

    Through a competitive award process, businesses can receive up to $50,000/$100,000 in matching grants to put toward a wide range of eligible expenses. Grants up to $50,000 for Entrepreneur Class and up to $100,000 for STEM Class. And up to 10 grants can be provided per application round (5 STEM/5 Entrepreneur). For more information on EDGE grants, please click here.

  • Tax Credits

    Delaware’s Division of Revenue administers tax credits against the corporate and personal income taxes, gross receipts tax, public utility tax and many others. Applications and forms are available through the Division of Revenue or through other administrative agencies as prescribed by law.

    1. New Economy Jobs Tax Credit

    Title 30, Ch.20, S.9; Form 2080DE

    An applicant for the New Economy Jobs Program must submit an application for certification as a qualified employer to the Secretary of Finance with a copy to the Director of Economic Development before any credits can be approved.

    • Employers who add at least 200 new jobs in the state with an annual salary averaging $70,000, or 50 new jobs with salaries of at least $100,000 (indexed annually for inflation since 2007; $118,200 for tax year 2017) are eligible for the credit.
    • The refundable credit may be claimed against the Corporate and Personal Income Taxes, Bank Franchise Tax, Insurance Premium Tax, Gross Receipts Tax, or most other State taxes.
    • New Economy Jobs Tax Credits are available for up to 40% of the withholding taxes collected and paid on behalf of the new employees.
    • Additional credits are available to employers that create new jobs in targeted growth zones, incorporated municipalities and former Brownfields sites that provide additional credits of up to 25% of the withholding taxes.
    2. New Business Facility Tax Credits

    Form 402AP 9901

    An application must be completed and filed with the Division of Revenue prior to claiming any corporate income tax credits or reductions in license taxes pursuant to Chapter 20, Title 30, of the Delaware Code.

    Encourages startup and investment into new business facilities.

    • Eligible businesses must create 5 new jobs and provide a capital investment of $200,000 ($40,000 per employee). The minimum credit is $500 per employee hired and $500 per every $100,000 in capital investment.
    • If the facility is located in a targeted area the credit increases to $750 per employee and $750 per $100,000 capital investment.
    • Unused credits carry forward for up to 10 years.
    • The non-refundable credit may be taken against the corporate or personal income tax, but amounts taken in any given tax year are capped at 50% of tax liability.
    Brownfields Credit

    For businesses located on a former brownfield site within a targeted area, the New Business Facility Tax Credit increases to $900 per qualified employee and $900 per $100,000 capital investment.

    Clean Energy Technology Device Manufacturers’ Credit

    If eligible for the New Business Facility Tax Credit, a manufacturer of solar power devices, fuel cells, wind power devices, or geothermal power devices may receive a credit of $750 per new job rather than $500.

    Public Utility Tax Credit

    If eligible for the New Business Facility Tax Credit, a business is entitled to a 50% rebate of public utility taxes attributable to utility consumption due to a new facility or expansion of a facility. The rebate is available for 5 years.

    Gross Receipts Tax Credit

    Form 402LTR 9901

    This computation schedule must be completed and submitted with each monthly and/or quarterly license tax return for which a tax reduction is claimed.
    If eligible for the New Business Facility Tax Credit, a business is entitled to a reduction of 5% to 90% of the gross receipts tax attributable to the new facility over a period of ten years.

    If eligible for the New Business Facility Tax Credit in a targeted area, a business is entitled to a reduction of 5% to 100% of the gross receipts tax attributable to the new facility over a period of 15 years.

    3. Business Finder’s Fee Tax Credit

    Title 30, Ch.20, S.10

    Incentivizes existing companies to encourage customers, suppliers, and service providers to operate in Delaware. To qualify for tax credit, which may be claimed against the Bank Franchise Tax, Insurance Premium Tax, Personal and Corporate Income Taxes, the Gross Receipts Tax and the Public Accommodation Tax.

    • The sponsor firm (Delaware business) and the new business (expanding to Delaware) must jointly file application.
    • The new business must create or intend to create at least 3 full-time jobs.
    • Both firms can claim a $500 annual credit of per each new full-time job.
    • Eligible for up to 3 years after the new business certification date.
    • The new business may not receive a New Economy Jobs Tax Credit and a Business Finder’s Fee Tax Credit.
    4. Research and Development Tax Credits

    Title 30, Ch.20, S.8; Form 2071AC0007

    The Delaware Division of Revenue must first approve any taxpayer electing to qualify for the Delaware Research & Development Tax Credits. After receiving tax credit approval from the Delaware Division of Revenue, the amount of approved credit on Delaware Form 2071AC must be transferred to the appropriate line on Delaware Form 700.

    This Credit promotes new research and development by lowering payments on taxable expenses. Two methods are available to determine the credit, which may be claimed against the Corporate and Personal Income Taxes.

    • The credit is 10% of the excess of the total Delaware Qualified Research and Development Expenses for the taxable year over the taxpayer’s Delaware Base Amount, or 50% of Delaware’s apportioned share of the taxpayer’s research and development tax credit.
    • Small businesses (under annual gross receipts of $20 million) are eligible for additional tax credit.
    • The credit is refundable for tax years 2018 and thereafter.
    5. Historic Preservation Tax Credit

    Form 1811AC 0905Form 1811CC 0701https://history.delaware.gov/preservation/taxcredit.shtml

    Promotes the rehabilitation of historic properties and continued use of historic properties rather than demolition. If approved by the State Historic Preservation Office, a credit of 20% to 40% of qualified expenditures is available. The credit is not refundable, but may be sold or transferred. Credits may be taken against Personal and Corporate Income Taxes and the Bank Franchise Tax.

    6. Land and Historic Resource Conservation Tax Credit

    Form 1801AC 0009

    After approval, a gift of eligible land/properties to public agencies and certain non-profit organizations may result in a credit of 40% of the land’s fair market value (approved by Delaware State Historic Preservation Office) against the Personal and Corporate Income Taxes. The maximum credit cannot exceed $40,000 in a calendar year.

    7. Neighborhood Assistance Tax Credit

    Title 30, Ch.20, S.1; Form 2001AC 0809

    Encourages investment in impoverished to moderate income locations. Tax credits against the Personal and Corporate Income Taxes can be given at 50% of the approved investment amount up to $100,000 per taxpayer every three years. Aggregate credits granted may not exceed $1,000,000 in any fiscal year. Must first receive approval (in the form of a letter) from the Director of the Delaware State Housing Authority.

    8. Individuals with Disabilities Tax Credit

    Title 30, Ch.20B

    Incentivizes Delaware employers to hire job candidates referred by vocational rehabilitation facilities. The employer may receive a 10% tax credit against the Personal and Corporate Income Taxes, the Bank Franchise Tax, and the Insurance Premium Tax for 10% of the wages of qualified employees, up to a maximum credit of $1,500. Credits are available for the first 3 years of employment.

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