TITLE 30

State Taxes

Income, Inheritance and Estate Taxes

CHAPTER 20. BUSINESS TAX CREDITS AND DEDUCTIONS

Subchapter III. Tax Credit and License Fee Reduction for Creation of Employment and Qualified Investment in Targeted Areas


As used in this subchapter:

(1) "Commercial activity" is an activity constituting a business licensable under § 2301 of this title, other than any of the following business: Amusement conductor, amusement park operator, auctioneer, automobile race operator, bowling alley operator, circus exhibitor, entertainment agent, finance or small loan agency, floor show operator, health spa or health club, junk dealer, motion picture theater, outdoor music festival promoter, pawnbroker, pool table operator, public bath keeper, salvage yard operator and self-service laundry or dry cleaner.

(2) "Retail activity" is engaging in business as a retailer, as defined in § 2901(18) of this title, other than by providing retail food and beverage services (including eating and drinking places, but excluding grocery and convenience stores), engaging in automobile sales or providing recreation or entertainment.

(3) "Targeted area" is:

a. Any real property located within this State that is owned by the State, any political subdivision of the State or any agency or instrumentality of the State or its political subdivisions;

b. Any real property located within this State that is owned by an organization described in § 501(c) of the Internal Revenue Code (26 U.S.C. § 501(c)) which is organized and operated, and which holds such real property, solely for the purpose of fostering economic development within this State;

c. Any area located within this State that has been approved by the United States Department of Commerce as a general purpose foreign trade zone;

d. Any of the following 1990 Delaware census tracts, as defined by the United States Department of Commerce, Bureau of the Census:

1. Within the City of Wilmington: 1990 Delaware census tracts 001, 006.01, 006.02, 007, 008, 009, 016, 017, 019 and 020;

2. Within New Castle County (other than the City of Wilmington): 1990 Delaware census tracts 101.1, 107, 128, 129, 145.02, 153, 154, 155, 162 and 167;

3. Within Kent County: 1990 Delaware census tracts 408, 410, 414, 425 and 430; and

4. Within Sussex County: 1990 Delaware census tracts 504, 506, 514, 518 and 519; or

e. When socio-economic data becomes available from the 2000 Census, the Director of the Division of Small Business in conjunction with the Secretary of Finance shall evaluate all census tracts using the following criteria: Percent of persons below poverty level; percent of households receiving public assistance; unemployment rate; median household income; a significant presence of vacant property within the target area; the character of the community; and population. Based on these criteria census tracts shall be reallocated on the following basis: Ten in the City of Wilmington; 10 in New Castle County outside of the City of Wilmington; 5 in Kent County; and 5 in Sussex County. The provisions of this sub-subdivision shall supersede paragraph (3)d. of this section upon the reallocation of the census tracts. Upon request, the Director of the Division of Small Business, in conjunction with the Secretary of Finance, may consider extending the geographic boundary lines of the target area where the adjacent community otherwise satisfies the above-referenced criteria.

(4) Any term or phrase defined in § 2010 of this title shall have the meaning ascribed to it therein.

64 Del. Laws, c. 460, § 3; 65 Del. Laws, c. 233, § 1; 67 Del. Laws, c. 40, § 25; 67 Del. Laws, c. 261, § 5; 68 Del. Laws, c. 202, § 9; 69 Del. Laws, c. 458, § 1; 74 Del. Laws, c. 162, §§ 1-3; 77 Del. Laws, c. 412, § 2; 78 Del. Laws, c. 1, § 3; 78 Del. Laws, c. 100, § 3; 81 Del. Laws, c. 49, § 19; 81 Del. Laws, c. 374, § 50.;

(a) In the case of any taxpayer that:

(1) Places in service, within any targeted area, as defined by § 2020(3)a. through d. of this title, a qualified facility in which the taxpayer is engaged in a qualified activity described in § 2010(3) of this title, and

(2) Thereby satisfies the requirements contained in § 2011(a) of this title for the allowance of a credit against the tax imposed by Chapter 19 of this title (relating to corporation income tax) for the taxable year of the taxpayer in which such qualified facility is placed in service by the taxpayer,

§ 2011 of this title shall be applied with respect to such qualified facility by substituting "$750" for "$500" in § 2011(b)(1) and (2) of this title.

(b) In the case of any taxpayer that:

(1) Places in service, only within any of the targeted areas as defined by § 2020(3)d. of this title, a facility in which the taxpayer is engaged in a commercial activity or retail activity, and

(2) Would thereby satisfy the requirements contained in § 2011(a) of this title for the allowance of a credit against the tax imposed by Chapter 19 of this title (relating to corporation income tax) for the taxable year of the taxpayer in which such facility is placed in service by the taxpayer if such facility were a qualified facility by virtue of its use by the taxpayer in or in connection with such commercial activity or retail activity,

§ 2011 of this title shall be applied with respect to such facility by treating it as a qualified facility.

(c) In the case of any taxpayer that:

(1) Places in service, within any targeted area, as defined by § 2020(3) of this title, a qualified facility in which the taxpayer is engaged in a qualified activity described in § 2010(3) of this title, and

(2) Satisfies the requirements contained in § 2011(k) of this title, such taxpayer shall be allowed a credit equal to 75% of the credit allowable under subsection (a) of this section, subject, however, to limitation and carryover provisions under § 2011(d) and (f) of this title.

The credit claimed in any tax year (including amounts carried over from previous tax years) shall not exceed the difference between $500,000 and the amount of credits claimed under § 2022 of this title for the 12 months comprising said tax year. Amounts of credit not used by virtue of the preceding sentence may be carried forward as if such unused credits arose by virtue of § 2011(f) of this title. No taxpayer may be eligible for credit under both this subsection and subsection (a) of this section for the same facility.

(d) In the case of a qualified facility located on a brownfield within any targeted area:

(1) "$900" shall be substituted for "$750" in subsection (a) of this section with respect to such qualified facility; and

(2) In applying this section, there shall be treated as a qualified activity any business, trade, commerce, profession or vocation carried on or in connection with such qualified facility, and there shall be treated as additional qualified investment all amounts expended by the taxpayer for environmental investigation and remediation of the brownfield.

The total incremental credits allowable to the taxpayer under this subsection shall not exceed the appropriate amount expended by the taxpayer for environmental investigation and remediation of the brownfield. If the provisions of this subsection apply with respect to any qualified facility, the provisions of § 2011(l) of this title shall not apply with respect to such qualified facility.

64 Del. Laws, c. 460, § 3; 68 Del. Laws, c. 202, § 16; 70 Del. Laws, c. 219, § 4; 70 Del. Laws, c. 487, §§ 4, 6; 78 Del. Laws, c. 47, §§ 12, 13.;

(a) Any taxpayer that:

(1) Places in service, within any targeted area as defined by § 2020(3)a. through d. of this title, a qualified facility in which the taxpayer is engaged in a qualified activity described in § 2010(3) of this title, and

(2) Thereby satisfies the requirements contained in § 2012(a) of this title for the allowance of a reduction in any license fee imposed upon the taxpayer's gross receipts by any provision of Chapter 27 of this title or by §§ 2301(d), 2902, 2903, 2904 of this title or, in the case of an activity described in §§ 2010(3)j., 2905 of this title for the taxable year of the taxpayer in which such qualified facility is placed in service by the taxpayer,

shall be allowed, in lieu of the reduction in such license fee provided by § 2012 of this title, a reduction in such license fee for each taxable period used in computing the amount of such license fee that ends within or with such taxable year of the taxpayer and for each such taxable period that ends within or with any of the 14 following taxable years in which such facility is a qualified facility with respect to the taxpayer on the last business day thereof. The amount of each such reduction in such license fee shall be determined in the manner provided in § 2012(b) of this title, but by employing the following table in lieu of the table contained in § 2012(b) of this title:

If the number of full calendar months elapsed since such qualified facility was placed in service by the taxpayer is: The license fee (computed without regard to this section) shall be reduced by the following percentage:
1 through 60 100%
61 through 72 90%
73 through 84 80%
85 through 96 70%
97 through 108 60%
109 through 120 50%
121 through 132 40%
133 through 144 30%
145 through 156 20%
157 through 168 10%
169 through 180 5%
Over 180 0%

(b) In the case of any taxpayer that:

(1) Places in service, only within any of the targeted areas as defined by § 2020(3)d. of this title, a facility in which the taxpayer is engaged in a commercial activity or retail activity, and

(2) Would thereby satisfy the requirements contained in § 2012(a) of this title for the allowance of a reduction in any license fee imposed upon the taxpayer's gross receipts by any provision of Chapter 27 of this title or by § 2301(d), 2902, 2903 or 2904 of this title for any taxable period used in computing the amount of such license fee that ends within or with the taxable year of the taxpayer in which such facility is placed in service by the taxpayer if such facility were a qualified facility by virtue of its use by the taxpayer in or in connection with such commercial activity or retail activity,

§ 2012 of this title shall be applied with respect to such facility by treating it as a qualified facility.

(c) In the case of any taxpayer that:

(1) Places in service, within any targeted area, as defined by § 2020(3) of this title, a qualified facility in which the taxpayer is engaged in a qualified activity described in § 2010(3) of this title, and

(2) Satisfies the requirements contained in § 2011(k) of this title, such taxpayer shall be allowed a reduction in license fees equal to 75% of the reduction allowable under subsection (a) of this section;

provided, however, that said reduction shall be allowed against only those license fees imposed by §§ 2902(c)(1), (3) and (5) [repealed]; 2702(b)(1) and (3) [repealed] of this title; and, in the case of an activity described in §§ 2010(3)j., 2905(b)(1) and (3) of this title; and that no facility shall be eligible for reduction under both this subsection and subsection (a) of this section, and that credits under this subsection shall not exceed $500,000 over the 180-month life of the credits.

64 Del. Laws, c. 460, § 3; 68 Del. Laws, c. 202, § 17; 70 Del. Laws, c. 487, §§ 20, 21.;

Repealed by 72 Del. Laws, c. 467, § 5, effective July 18, 2000.;

Notwithstanding any reference in this chapter to Chapter 19 of this title, any taxpayer not subject to taxation under Chapter 19 of this title may claim the credits allowable under § 2011, § 2021, § 2040 or § 2070 of this title against the tax imposed by Chapter 11 of this title; provided, however, that the amount of credit claimed by an individual under Chapter 11 of this title shall not exceed 50% of the amount of tax imposed upon such individual by Chapter 11 of this title for such taxable year.

68 Del. Laws, c. 202, § 12; 72 Del. Laws, c. 23, § 5; 72 Del. Laws, c. 467, § 6; 78 Del. Laws, c. 47, § 14.;