Delaware’s Tax Incentives & Financing


#6

Best Business Environment

#2

Delaware rank for overall corporate tax favorability for new firms

#3

Delaware rank for overall corporate tax favorability for mature firms


#1

Delaware rank for nationwide for tax favorability in the manufacturing sector


No Sales Tax – Including Inventory, Machinery or Equipment


25%

Below National Average Cost of Doing Business

Tax Incentives & Financing in Delaware


Growing and supporting our businesses is one of our biggest priorities in the First State. Delaware boasts a cost of doing business 25% below the national average attracting businesses across a diverse range of industries. Delaware offers a wide range of attractive tax credits and incentives, as well as financing and funding options for businesses in all stages of growth and development. From tax credits and incentives to grants and loans, Delaware shows its commitment to making it the best place in the nation to start and grow a business supportive of businesses in all stages of growth.

Cost of Doing Business in Delaware


For a business to flourish, location is critical. Delaware proves to be the perfect location to do just that. The cost of doing business is 25% lower than the U.S. average with a pro-business legal environment. Delaware ranks 2nd-lowest for business costs in the nation, and the state has no sales tax, no inventory tax, and no value-added tax. In addition to low business costs, Delaware is one of the top three most affordable Mid-Atlantic states to live in, attracting a highly educated and talented workforce. With more than 1.4 million business entities from around the world calling Delaware their legal home—including two-thirds of Fortune 500 companies – when you choose Delaware, you’re in good company.

Delaware Financing and Funding Options


Delaware Prosperity Partnership can help identify potential incentives and funding options available to support businesses looking to grow, expand and relocate to Delaware. Some of the financing programs attracting businesses to the First State include the following:

Delaware Strategic Fund (Grants and Loans)

The Delaware Strategic Fund is the primary funding source supporting businesses with expansion, retention and relocation of businesses to the state of Delaware. For more information on the process please contact Becky Harrington at bharrington@choosedelaware.com. In addition, the Division of Small Businesses may also offer low-interest loans may also be offered to projects on commercially contaminated/worn locations such as Brownfield sites. For more information please click here.

Site Readiness Grants

The Site Readiness Fund provides grants, loans or other economic assistance to qualified businesses or local governments that invest in constructing, renovating or improving commercial, industrial sites that are readily available to new businesses, established businesses that are considering moving to the state or existing businesses within the state that need additional sites to remain or expand in Delaware. Preference to properties and projects that align with the State’s Strategy Investment Levels 1, 2, and 3.  State Investment Level Map. For more information and the application please click here.

Transportation Infrastructure Investment (TIIF)

Managed by the Transportation Infrastructure Investment Fund Council, this fund allows businesses to make roadway infrastructure improvements that will support job-creating projects in Delaware. The council will consider applications and make funding recommendations to Delaware’s Transportation Secretary and the Secretary of State. For more information and the application please click here

Graduated Lab Space Grants

Target 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. For more information on the application process please contact Noah Olson, nolson@choosedelaware.com.

Workforce Training Grants

The State of Delaware offers matching up to $100,000 per project. For more information please click here.

EDGE Grants (Encouraging Development, Growth & Expansion)

Through a competitive award process, businesses can receive up to $25,000/$100,000 in matching grants to put toward a wide range of eligible expenses. Grants up to $25,000 for Entrepreneur Class and up to $100,000 for STEM Class. The funds are intended as a $3 (state) to #1 (business) match. The Division can award up to 15 grants per application round (5 STEM/10 Entrepreneur). For information on EDGE grants, please click here.

If your company is considering a relocation or expansion in Delaware and you need help navigating any of these tax incentives, credits or financing options? For more information on available funds, grants and tax credits reach out to Becky Harrington, Director of Business Development, at (302) 576-6577 or bharrington@choosedelaware.com.

Delaware Tax Credits


Delaware offers a myriad of options for tax credits and incentives administered through the Delaware’s Division of Revenue and other administrative agencies. The various tax credits are available to use against the corporate and personal income taxes, gross receipts tax, public utility tax and many others.

This section summarizes some of the most commonly used options available in Delaware along with links to applications and required forms.

New Economy Job Credits

Are available to employers who add a minimum of 50 – 200 new jobs to the state within prescribed salary ranges and are available for up to 40% of 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.

Title 30, Ch.20, S.9; Form 2080DE

New Business Facility Tax Credits

Encourage startups and investments into new business facilities and require creation of 5 new jobs and provide a capital investment of $200,000. 

  • 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 – For manufacturers of solar power devices, fuel cells, wind power devices, or geothermal power devices, the New Business Facility Tax Credit provides a credit of $750 per new job rather than $500.
  • Public Utility Tax Credit –  The Public Utility Tax Credit is available to a company if they have expanded their facility or moved to a new one.
  • Gross Receipts Tax Credits – Gross Receipts Tax Credits must be applied monthly but can result in a reduction of 5% to 90% of gross tax receipts for eligible businesses.

Form 402AP 9901

Business Finder’s Fee Tax Credit

The Business Finder’s Fee Tax Credit supports and incentivizes existing companies to encourage customers, suppliers and service providers to operate in Delaware. The sponsoring business and new business must complete a joint application, with the new business creating or intending to create at least 3 new full-time jobs.

Research and Development Tax Credits

Aimed at promoting new research and development, this credit may be available to businesses looking to engage in new research in Delaware.

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

Historic Preservation Tax Credit

Promoting the restoration of historic properties, the Historic Preservation Tax Credit offers a credit of up to 20% to 40% of qualified expenditures. 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.

Form 1811AC 090
Form 1811CC 0701
https://history.delaware.gov/preservation/taxcredit.shtml

Land and Historic Resource Conservation Tax Credit

The Land and Historic Resource Conservation Tax Credit celebrates the protection of some of Delaware’s most important properties. 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.

Form 1801AC 0009

Neighborhood Assistance Tax Credit

Neighborhood Assistance Tax Credit provides funding for businesses looking to invest in lower income communities and provides credits against personal and corporate income taxes at 50% of the approved investment amount up to $100,000 per taxpayer every year for up to three years. This credit requires approval from the Director of the Delaware State Housing Authority.

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

Individuals with Disabilities Tax Credit

The disabilities tax credit offers those businesses who hire individuals from vocational rehabilitation facilities a 10% tax credit against personal and corporate income taxes, the Bank Franchise Tax, and the Insurance Premium Tax for 10% of the wages of the qualified employees.

Here are links to various sections of our site that may prove helpful to you.

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