TITLE 30

State Taxes

Income, Inheritance and Estate Taxes

CHAPTER 20. BUSINESS TAX CREDITS AND DEDUCTIONS

Subchapter IX. New Economy Jobs Program Credits


The purpose of this subchapter shall be to create incentives to attract and retain Delaware employers which employ the most qualified individuals working in the forefront of traditional and emerging business competition.

76 Del. Laws, c. 78, § 1; 80 Del. Laws, c. 207, § 3.;

As used in this subchapter:

(1) "Affiliated group" has the meaning provided by § 1504 of the Internal Revenue Code (26 U.S.C. § 1504), but including for this purpose pass-through entities, as defined in § 1601 of this title that would be includible if they were classified as corporations, the equity interests in which would be treated as stock, and the ownership of such interests would satisfy the stock ownership requirements of the said 26 U.S.C. § 1504.

(2) "Base year" shall mean the calendar year immediately preceding a qualified employer's first certified year.

(3) "Brownfield" shall have the meaning set forth in § 9103 of Title 7.

(4) "Certified," "certification," or "recertification" mean or refer in their context to the first written determination of the Secretary issued to an employer that it is a qualified employer pursuant to the provisions of this subchapter, or the Secretary's annual review of that written determination.

(5) "Certified year" shall mean a calendar year for which an employer is certified to be eligible for New Economy Jobs Program credits under this subchapter.

(6) "Compensation" means that part of the sum reported on Form W-2, or equivalent form of the United States Department of Treasury, Internal Revenue Service as "Medicare wages and tips" that is attributable to Delaware sources.

(7) "Corporate restructuring" shall mean a transaction that qualifies pursuant to § 355 or § 368 of the Internal Revenue Code (26 U.S.C. § 355 or § 368).

(8) "Credit" means a reduction of the final balance for tax or fees reported due by a qualified employer on a tax or information return pursuant to the New Economy Jobs Program.

(9) "Director" means the Director of the Division of Small Business, Development and Tourism as defined in § 8702A of Title 29.

(10) "Eligible job" means any single position held by a common-law employee in this State for which the compensation equals or exceeds the salary threshold. More than 1 consecutive employee may perform an eligible job during a single calendar year so long as the total compensation of all consecutive employees performing such eligible jobs during such calendar year equals or exceeds the salary threshold.

(11) "Incorporated municipality" means and includes the area within the January 1, 2007, boundaries of cities, towns and villages created under any general or special law of this State for general governmental purposes which possess legislative, administrative and police powers for the general exercise of municipal functions and which carry on such functions through a set of elected and other officials.

(12) "Inflation adjustment factor" means an amount equal to the Consumer Price Index prepared by the Bureau of Labor Statistics, U.S. Department of Labor for urban consumers, U.S. city average, all items, that corresponds to the calendar year for which the credit is calculated divided by the equivalent Consumer Price Index figure for 2007. Final calculations of the inflation adjustment factor for a calendar year shall be based on data available April 1 of the following calendar year.

(13) "New Economy Jobs Program" means the Program authorized pursuant to this subchapter to encourage the creation of high wage, knowledge-based jobs in this State.

(14) "Principal executive office" shall mean the address identified as the corporation's principal executive office in a 10-Q or 10-K filing with the Securities and Exchange Commission.

(15) "Qualified employee" means a common-law employee employed in an eligible job in this State.

(16) "Qualified employer" means an employer certified to be eligible for New Economy Jobs Program credits under this subchapter.

(17) "Qualified retained employer" means an employer certified to be eligible for New Economy Jobs Program credits under this subchapter and within the 3-year period prior to certification:

a. The employer has gone through a corporate restructuring; and

b. The employer, a predecessor of the employer or a member of the employer's affiliated group had its principal executive office located within this State, and at the time of certification:

1.A. Is a publicly-traded company with its business focused on agricultural seed and crop protection products; and

B. Identifies the address of its principal executive offices as being located within this State; or

2.A. Is a publicly-traded company with its business focused on nutrition and health, industrial biosciences, safety and protection and/or electronics and communications; and

B. Identifies the address of its principal executive offices as being located within this State.

(18) "Qualified withholding payments" means (subject to the limitations of § 2084 of this title) the total amount of tax withheld, accounted for, and paid to the Secretary pursuant to subchapter VII of Chapter 11 of this title by a qualified employer or qualified retained employer on account of the compensation paid so many of the qualified employees, vital employees or retained employees as are counted in determining New Economy Jobs Program credits.

(19) "Retained eligible job" means any single position held by a retained employee in this State. More than 1 retained employee may perform a retained eligible job during a single calendar year.

(20) "Retained employee" means a common-law employee employed by a qualified retained employer in a retained eligible job in this State.

(21) "Salary threshold" means the amount of Delaware sourced compensation paid to a common law employee, rounded to the nearest $100, calculated by multiplying $100,000 times the inflation adjustment factor.

(22) "Secretary" means the individual appointed as administrator and head of the Delaware Department of Finance pursuant to § 8302 of Title 29.

(23) "Targeted growth area" means a geographic area designated as "investment level 1" or "investment level 2" on the strategy maps of the most recent executive order approving the strategies for state policies and spending, originally approved in December, 1999.

(24) "Targeted growth county" means a county in this State having, on June 30, 2007, fewer than 250,000 inhabitants as reported in the most recent County Population Estimate of the United States Department of Commerce, Bureau of Census.

(25) "Vital employee" means a common-law employee employed in a vital job in this State.

(26) "Vital job" means any single position held by a vital employee in this State.

76 Del. Laws, c. 78, § 1; 78 Del. Laws, c. 396, § 1; 80 Del. Laws, c. 207, § 3; 81 Del. Laws, c. 49, § 19.;

(a) Application for certification as a qualified employer or qualified retained employer will be made to the Secretary with a copy to the Director.

(b) The Secretary shall annually review the certification of qualified employers and qualified retained employers for eligibility for New Economy Jobs Program credits before credits are allowed.

(c) Credits allowable during the first certified year will be prorated upon the basis of the number of months before and after certification.

(d) For any single calendar year subsequent to its first certified year in which a qualified employer hires and employs no fewer than 50 additional qualified employees in new eligible jobs or no fewer than 200 additional vital employees in new vital jobs, the qualified employer may:

(1) Elect to treat such additional qualified employees either as an addition to its existing number of qualified employees under its existing certification; or

(2) Make a separate application pursuant to this section and § 2083 of this title for certification and credits with respect to such additional qualified employees.

76 Del. Laws, c. 78, § 1; 78 Del. Laws, c. 396, § 2; 80 Del. Laws, c. 207, § 3.;

(a) Subject to the limitations contained in § 2084 of this title and to such return requirements as may be imposed by the Delaware Bank Commissioner, Delaware Insurance Commissioner, or the Secretary, qualified employers and qualified retained employers shall be eligible during their first certified year and for the 9 taxable years thereafter for credits against the taxes and/or fees imposed by the following statutory provisions:

(1) Chapter 11 of Title 5;

(2) Sections 702 and 703 of Title 18;

(3) Chapter 19 of this title;

(4) Other fees and taxes imposed under this title.

The amount of credit shall be determined under subsections (b) through (e) of this section. Credits under this section shall be taken by the qualified employer or qualified retained employer against taxes in the order specified in this subsection and to the extent thereof.

(b) Credits based on minimum additional employment in eligible jobs.

(1) Subject to the limitations herein and in § 2084 of this title, in the case of a qualified employer which employs in a certified year no fewer than 50 qualified employees in excess of the number of its qualified employees during its base year, the credit granted under subsection (a) of this section shall be that product determined by multiplying:

a. X, where "X" equals the total of its qualified withholding payments on the compensation of its qualified employees hired and employed after the base year in new eligible jobs, by

b. The credit percentage, which shall consist of the sum of the following:

1. 25%, plus

2. 0.075% for each qualified employee (in excess of 50 more than the number of qualified employees employed during its base year) hired and employed in new eligible jobs.

(2) In no case shall the total credit available under this subsection exceed 40% times X.

(3) In no case shall qualified employees counted for purposes of claiming New Economy Jobs Program credits under this subsection be included in the calculation of employment under subsection (c) or (d) of this section.

(c) Credits based on minimum additional employment in vital jobs. —

(1) Subject to the limitations herein and in § 2084 of this title, in the case of a qualified employer which: (i) employs in a certified year no fewer than 200 vital employees in excess of the number of its vital employees during its base year and (ii) provides an average compensation to such vital employees of at least $70,000, the credit granted under subsection (a) of this section shall be that product determined by multiplying:

a. X, where "X" equals the total of its qualified withholding payments on the compensation of its vital employees hired and employed after the base year in new vital jobs, by

b. The credit percentage, which shall consist of the sum of the following:

1. 25%, plus

2. 0.05% for each vital employee (in excess of 200 more than the number of vital employees employed during its base year) hired and employed in new vital jobs.

(2) In no case shall the total credit available under this subsection exceed 40% times X.

(3) In no case shall vital employees counted for purposes of claiming New Economy Jobs Program credits under this subsection be included in the calculation of employment under subsection (b) or (d) of this section.

(d) Credits based on minimum employment in retained eligible jobs. —

(1) Subject to the limitations herein and in § 2084 of this title, in the case of a qualified retained employer which: (i) maintains in a certified year no fewer than 200 retained eligible jobs and (ii) provides an average annual compensation of at least $70,000 to the retained employees in such retained eligible jobs, the credit granted under subsection (a) of this section shall be the product determined by multiplying:

a. X, where "X" equals the total of its qualified withholding payments on the compensation of its retained employees employed in retained eligible jobs, by

b. The credit percentage, which shall consist of the sum of the following:

1. 25%, plus

2. 0.05% for each retained employee in excess of 200 retained employees employed in retained eligible jobs.

(2) In no case shall the total credit available under this subsection exceed 40% times X.

(3) In no case shall retained employees counted for purposes of claiming New Economy Jobs Program credits under this subsection be included in the calculation of employment under subsection (b) or (c) of this section.

(e) Additional credit based on geographic employment. — In addition to the credits determined on the qualified withholding payments for qualified employees, vital employees or retained employees identified under subsections (b) through (d) of this section, a qualified employer or qualified retained employer may claim additional credits determined by:

(1) Multiplying Y-1 times 10%, where "Y-1" equals the total of the qualified withholding payments on the compensation of such qualified employees, vital employees or retained employees identified to be employed in new eligible jobs, vital jobs or retained eligible jobs in an incorporated municipality or a targeted growth area,

(2) Multiplying Y-2 times 5%, where "Y-2" equals the total of the qualified withholding payments on the compensation of such qualified employees, vital employees or retained employees identified to be employed in new eligible jobs, vital jobs or retained eligible jobs in a reclaimed Brownfield in which the qualified employer is the first tenant, and

(3) Multiplying Y-3 times 10%, where "Y3" equals the total of the qualified withholding payments on the compensation of such qualified employees, vital employees or retained employees identified to be employed in new eligible jobs, vital jobs or retained eligible jobs in a targeted growth county.

76 Del. Laws, c. 78, § 1; 78 Del. Laws, c. 396, § 3; 80 Del. Laws, c. 207, § 3.;

Notwithstanding § 2083 of this title,

(1) The total amount of New Economy Jobs Program credit allowable under this subchapter for any qualified employer or qualified retained employer during any calendar year shall not exceed 65% percent of its qualified withholding payments;

(2) If the Secretary finds that a qualified employer's or a qualified retained employer's qualified withholding payments unreasonably exceed the amount of tax required to be withheld, accounted for, and paid by a taxpayer to the Secretary pursuant to subchapter VII of Chapter 11 of this title the Secretary may limit such qualified withholding payments to an amount which is reasonable. The Secretary or the Secretary's delegate shall mail written notice of such determination to the taxpayer. The taxpayer may, within 30 days of the date of mailing such notice, institute a written protest of such finding to the Secretary in the manner provided under § 523 of this title for protests of assessments. The Secretary's determination of the protest shall be final;

(3) No qualified employees, vital employees or retained employees counted for purposes of claiming New Economy Jobs Program credits under this subchapter may be included in the calculation of employment for purposes of claiming tax credits provided by subchapters II, III, VII and X of this chapter or as provided by § 1105(h) of Title 5;

(4) No qualified employee or vital employee in any certified year who was employed in Delaware in the base year by a member of an affiliated group which conducted or conducts business in this State during the base year or any year thereafter shall be counted as newly hired or employed qualified employees or vital employees or qualified employees in new eligible jobs for purposes of calculating the New Economy Jobs Program credits under this subchapter; and

(5) No more than 10% of the total number of qualified employees or vital employees counted for purposes of claiming New Economy Jobs Program credits under this subchapter may be individuals who were required by the provisions of Chapter 11 of this title to file a personal income tax return for the base year.

76 Del. Laws, c. 78, § 1; 78 Del. Laws, c. 396, § 4; 80 Del. Laws, c. 207, § 3.;

To the extent a qualified employer's or a qualified retained employer's New Economy Jobs Program credits exceed any amounts otherwise due for the taxes and fees listed under § 2083(a) of this title but do not exceed the limitation of § 2084 of this title, such unused credits shall be paid to it in the nature of tax refunds.

76 Del. Laws, c. 78, § 1; 80 Del. Laws, c. 207, § 3.;

76 Del. Laws, c. 78, § 1; repealed by 80 Del. Laws, c. 207, § 3, eff. Jan. 1, 2017.;