Gov. Jack Markell signed the Commitment to Innovation Act, a key part of the effort to bring the headquarters of DuPont’s agricultural business to the state.
Senate Bill 200 passed the House by a 34-3 margin following a unanimous vote by the Senate last week.
“We should celebrate the significant progress of the state’s economy in recent years, but this legislation reflects our belief that our work is never done,” said Markell. “We must always seek out ways to foster more innovation and the creation of well-paying jobs for our workforce. Passage of this legislation continues the tremendous cooperation that helped convince the leaders of Dow and DuPont to locate new headquarters in Delaware, while it also paves the way for more companies to innovate, increase research and development, and create jobs in our state.”
The act ensures extends a comprehensive research and development tax credit by removing the annual expenditure cap of $5 million and making the credit refundable. The new law makes Delaware one of three states in the country, and the only state east of the Mississippi, with the extended R&D credit.
Currently, all applicants have their awards scaled down if the credits are oversubscribed so that the cap is not exceeded.
SB 200 makes modifications to the New Economy Jobs tax credit, which provides an incentive for companies to establish global corporate headquarters in Delaware. Companies that do this are eligible to receive a tax credit calculated based on the value of their total income tax withholding payments to the state.
The modified credit also reflects the need to attract the headquarters of the new spin-offs that are planned as a result of the proposed Dow-DuPont merger.
The Commitment to Innovation Act is a key part of the state’s proposal to DuPont to locate the headquarters of both the agricultural company spin-off and its specialty products spin-off following its expected merger with Dow.
“While the situation with DuPont created an urgency to make these changes, modernizing our R&D credit has a much bigger benefit than just preserving DuPont in Delaware,” said House Speaker Pete Schwartzkopf, D-Rehoboth. “This law will encourage businesses that are in the early stages of development to invest and locate here. By becoming one of only a few states in the country with this system, and given our location along the East Coast, we can become a major hub for research and development. Delawareans ask all the time what we are going to do to help create more jobs here, and the passage of this bill helps to answer that question.
“Research and development continues to be a large investment and job creator for companies and is important for Delaware’s economic growth moving forward. By passing this bill, the legislature has taken an important step to help create jobs here, and the Delaware State Chamber of Commerce applauds the members who supported it,” said Rich Heffron, President of the State Chamber of Commerce. “If I am a business owner in this state or outside of it, I am standing up and taking note of the fact that there are some really positive things happening in Delaware.”
“These changes are an investment in our economy and set Delaware on a more positive pathway to robust economic growth and job creation,” said Bob Perkins, executive director of the Delaware Business Roundtable. “The Roundtable applauds the legislators who supported these changes, and we are happy to see this bill signed into law.”
