Category: Delaware

Delaware Credits and Incentives

As we’ve mentioned before, our Georgia clients frequently ask us to investigate potential credits and incentives in other states where they have operations, potential acquisitions or strong relationships with customers or vendors. In addition, private equity groups ask us about potential $$ for their portfolio companies.
We were recently asked about credits and incentives in Delaware. Some state economic development professionals outlined some of their details (Delaware Economic Development Office site click here).
Delaware offers several tax credits, grants and loan programs along with technical assistance programs that are available to both new and existing businesses.  CNBC ranked Delaware #38 for the cost of doing business in their 2014 America’s Top States for Business survey (Georgia was #1 in the same survey).    
Incentives and credits include:

Job Creation Tax Credit: Allows for eligible businesses engaged in qualified activities to receive tax credits against corporate or personal income taxes, gross receipts tax, and public utility tax. The business must hire five or more qualified employees, make an investment of at least $200,000 ($40,000 per qualified employee) and operate in a qualified facility.

Research and Development Tax Credit: Qualified businesses with research and development expenses are eligible for Delaware research and development tax credits for the taxable year up to 50 percent of the Delaware income tax liability.  Amount doubled for smaller businesses.

Clean Energy Technology Device Manufacturers’ Tax Credit: Applicable to clean energy technology device manufacturers of solar power devices, fuel cells, wind power devices and geothermal power devices. Those eligible can qualify for tax credits of $750 for each qualified employee.

Business Finder’s Fee Tax Credit: Incentivizes existing Delaware businesses to leverage relationships with suppliers, customers and other businesses to relocate to Delaware. Both the existing Delaware business and new relocating business are eligible for tax credits.  $500 per job for three years.

Other incentives include Veterans Opportunity Credits, Industrial Public Utility Tax Rebates, and a variety of loan programs, grant programs, workforce training grants, and property tax incentives.

Compared to Georgia, Delaware has:
  • Higher corporate and personal income tax rates.
  • A narrower range of incentives.
  • Pre-approvals required for many incentives
To summarize, Delaware is not as competitive as Georgia for business tax incentives.  But their Eastern Seaboard location could provide advantages, depending on logistical needs.
Do any of your clients have Delaware connections?  If so, get busy collecting information and planning early to maximize their incentive potential!