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” means a transaction that meets both of the following:

a. Qualifies under § 355 or §   368 of the Internal Revenue Code (26 U.S.C. § 355 or §  368).

b. Occurs on or before December 31, 2021.

(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.

(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) [Repealed.]

(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 $112,200 of Delaware sourced compensation paid to a common law employee. The level of the applicable threshold in this paragraph (21) is subject to annual adjustment as more fully set forth in § 515 of this title.

(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;  81 Del. Laws, c. 374, § 51;  82 Del. Laws, c. 101, § 1;  83 Del. Laws, c. 323, § 5; 

(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) [Repealed.]

(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;  82 Del. Laws, c. 101, § 1; 

(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 shall be eligible during their first certified year and for the 10 taxable years thereafter, 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) Chapter 11 of this title.

The amount of credit shall be determined under subsections (b) through (e) of this section.

(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 on December 31 of a certified year has no fewer than 50 qualified employees in excess of the number of its qualified employees on December 31 of 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.

(4) If, on December 31 of a qualified employer’s first certified year, the qualified employer does not meet the requirements of paragraph (b)(1) of this section but the number of qualified employees in excess of the number of qualified employees on December 31 of its base year is at least 50 multiplied by a fraction, the numerator of which is the number of months during which the qualified employer has employed qualified employees in new eligible jobs, and the denominator of which is 12, a qualified employer is eligible for the minimum credit percentage of 25 percent of qualified withholding payments on the compensation of the additional qualified employees and for the additional credits as determined in subsection (e) of this section.

(5) In the eleventh certified year, the calculated credit is multiplied by 1 minus the fraction computed pursuant to paragraph (b)(4) of this section.

(6) If, on December 31 of any 2 consecutive certified years after the first certified year, the qualified employer does not employ at least 50 qualified employees in excess of the number of its qualified employees on December 31 of its base year, the qualified employer is disqualified and shall not be permitted to claim any further credit based upon the original application.

a. A disqualification under this provision may be reversed by the Secretary, in the Secretary’s discretion, after receipt of a taxpayer’s written request and statement of reasonable cause, if the Secretary has determined the disqualification is the result of extraordinary circumstances.

b. A disqualification under this provision will not preclude the formerly qualified employer from submitting a new application to the Secretary pursuant to § 2082 of this title, provided that such subsequent application shall require the establishment of a new base year.

(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: (ii)

a. Employs on December 31 of a certified year no fewer than 200 vital employees in excess of the number of its vital employees on December 31 of its base year; and

b. 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:

1. 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

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

A. 25%, plus

B. 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.

(4) If, on December 31 of a qualified employer’s first certified year, the employer does not meet the requirements of paragraph (c)(1) of this section but the number of vital employees in excess of the number of vital employees on December 31 of its base year is at least 200 multiplied by a fraction, the numerator of which is the number of months during which the qualified employer has employed vital employees in new vital jobs, and the denominator of which is 12, a qualified employer is eligible for the minimum credit percentage of 25 percent of qualified withholding payments on the compensation of the additional vital employees and for the additional credits as determined in subsection (e) of this section.

(5) In the eleventh certified year, the calculated credit is multiplied by 1 minus the fraction computed pursuant to paragraph (c)(4) of this section.

(6) If, on December 31 of any 2 consecutive certified years after the first certified year, the qualified employer does not employ at least 200 vital employees in excess of the number of its vital employees on December 31 of its base year, the qualified employer is disqualified and shall not be permitted to claim any further credit based upon the original application.

a. A disqualification under this provision may be reversed by the Secretary, in the Secretary’s discretion, after receipt of a taxpayer’s written request and statement of reasonable cause, if the Secretary has determined the disqualification is the result of extraordinary circumstances.

b. A disqualification under this provision will not preclude the formerly qualified employer from submitting a new application to the Secretary pursuant to § 2082 of this title, provided that such subsequent application shall require the establishment of a new base year.

(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:

a. Maintains in a certified year no fewer than 200 retained eligible jobs; and

b. 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:

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

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

A. 25%, plus

B. 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;  82 Del. Laws, c. 101, § 2; 

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.

(6) The Secretary shall review all applications for the tax credit and all returns filed by each applicant. If in the Secretary’s sole discretion, the Secretary determines that an applicant did not have a good faith basis for claiming the New Economy Jobs Credit, the Secretary may reverse the grant of the credit and issue an assessment to the applicant for the entire amount of unpaid tax, together with penalties and interest, arising out of the improper tax credit application.

76 Del. Laws, c. 78, §  1;  78 Del. Laws, c. 396, §  4;  80 Del. Laws, c. 207, § 3;  82 Del. Laws, c. 101, § 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, effective Jan. 1, 2017.;