Delaware Direct Financial Incentives 2010
Delaware's economic development, finance and tax organizations provide a range of incentive programs to initiate new business and commercial investment. Specific programs include no sales tax, no property tax, the New Economy Jobs Program, and targeted industry tax incentives.
Firms meeting the criteria for targeted industry tax credits are eligible for a rebate of 50 percent of the public utilities tax imposed on new or increased consumption of gas and electricity for five years. The public utilities tax rate is 4.25 percent. The utility tax on the consumption of electric by licensed manufacturers and food or agribusiness processors is reduced from 4.25 percent to 2 percent. Additionally, electric consumed in the manufacture of automobiles is exempt from the utility tax.
Corporate Income Tax Credits (Targeted Industry & Targeted Areas):
Firms within targeted industries qualify for corporate income tax credits of $400 for each new employee and $400 for each new $100,000 investment. Firms within targeted industries who also locate in a targeted area, qualify for $650 for each new employee and $650 for each new $100,000 investment. Firms must invest a minimum of $200,000 and create a minimum of five new positions.
Brownfields Tax Credit Program:
Provides tax credits to any taxpayer who invests $200,000 in a qualified brownfield facility and who has hired at least five qualified employees during any taxable year. Companies that locate in a brownfield are eligible to receive tax credits for new employees ($650 for each new employee), capital investment ($650 per each $100,000 of investment), and a 15-year graduated gross receipts tax credit.
New Economy Jobs Program:
The New Economy Jobs Program is designed to provide an innovative tool to bring high-wage jobs to Delaware and make the state more competitive, while allowing the state to effectively recruit and establish headquarters, research and development jobs, and specialized financial services firms. The legislation provides businesses up to a 65 percent rebate on withholding taxes. To qualify, an employer must add at least 50 net new jobs for new Delaware taxpayers with each having an annual salary of at least $100,000.
Delaware Competitiveness Fund:
The purpose of the Delaware Competitiveness Fund is to induce Delaware legacy manufacturers to make capital investments to preserve and expand productivity, competitiveness and jobs at existing Delaware plant sites that face decline due to national and global competition. Grants from the Competitiveness Fund may equal up to 3 percent of the project's total capital investment. Loans may equal up to 95 percent of the total project cost.
Delaware Strategic Fund:
The Delaware Strategic Fund represents the primary funding source used by the Delaware Economic Development Office to provide customized financial assistance to businesses. For businesses considering locating in the State of Delaware, financial assistance may be provided in the form of low interest loans, grants, or other creative instruments to support the attraction of businesses that pay sustainable wages. The Delaware Strategic Fund also represents the primary funding source used by for SBIR Bridge Grants and Brownfield Grants.
Citizens Bank of Delaware's Matching Loan Partnership Program:
Citizens Bank has formed a partnership with the State of Delaware to create the Citizens Business Bank. This "first of a kind" program features the Citizens Competitiveness Fund, a $12.5 million low-interest loan program designed to make one-time investments to create and retain jobs and expand business at existing Delaware companies. This partnership will provide companies with an attractive form of capital -- at below market rates -- while leveraging the impact of the Governor's economic stimulus policies and providing additional resources to insure continued business growth and stability.
Tax-exempt bond financing:
The Delaware Economic Development Authority (DEDA) provides statewide financial assistance to new or expanding businesses, governmental units and certain organizations that are exempt from federal income taxation (collectively, "assisted persons") by issuing tax-exempt bonds and lending the proceeds of such bonds to these assisted persons. Tax exempt bonds bear lower interest rates than comparable taxable bonds, because the interest paid to bond holders is exempt from federal and Delaware income taxes. Tax exempt financing may be cost effective for projects involving the issuance of more than $1,250,000.
Emerging Technology Funds:
The state of Delaware is focused on creating an environment that supports the growth of technology-based companies. As a key component of the Governor's New Economy Initiative, the Delaware Economic Development Office (DEDO) offers the Emerging Technology Funds - Technology Based Seed Funds (TBSF I and TBSF II) and Pre-Venture Fund to foster creation of technology-based start-ups in fields such as biotechnology, advanced materials, clean energy, information technology, and new chemical applications. The goal of these funds is to invest in "gazelle-like" entrepreneurial projects positioned for fast-growth and wealth creation. An investment from the fund will be the catalyst for an entrepreneur to start a business and a starting point to raise capital.
The Delaware Access Program:
The Delaware Access Program is designed to give banks a flexible and extremely non-bureaucratic tool to make business loans that are somewhat riskier than a conventional bank loan, in a manner consistent with safety and soundness. It is designed to use a small amount of public resources to generate a large amount of private bank financing, thus providing access to bank financing for many Delaware businesses that might otherwise not be able to obtain such access.
The Clean Energy Partnership:
The purpose of the Clean Energy Center Partnership is to support the work and research being conducted at the University of Delaware and Delaware State University, and to build a nationally recognized Clean Energy Center based on the strength of these institutions' existing programs. The State is offering matching (1:1) grants for research initiated and paid for by the industry which must be conducted by the University of Delaware and/or Delaware State University. Eligible companies can be from Delaware or surrounding states. However, the research projects must be conducted at the University of Delaware or Delaware State University.
Delaware State Contact:
Economic Development Director
Delaware Economic Development Office
99 Kings Highway
Dover, DE 19901
Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings.
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