Leaders of both parties introduced the Delaware Commitment to Innovation Act (SB 200). The legislation is part of the successful effort to ensure that two of the spin-offs of DowDuPont will locate their headquarters here.
The act eliminates the annual research and development expenditure cap of $5 million and makes the credit refundable. If enacted, Delaware would be one of only three states in the country, and the only state east of the Mississippi, with an R&D credit containing both features.
By making the existing research and development credit refundable, it will become more useful to many businesses, particularly early stage research companies that may not yet be profitable, as well as to established companies interested in expanding their research footprint in Delaware, the release noted.
Second, 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 choose to 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 Commitment to Innovation Act is a key part of the state’s proposal to DuPont to locate the headquarters of both its agricultural company spin-off and its specialty products spin-off following its expected merger with Dow.
“These reforms save jobs today and are going to create jobs in the future,” said Gov. Jack Markell. “Not only are they vital to ensuring we keep the headquarters of the planned agriculture spinoff, but they also support the continued growth of innovative businesses of all sizes and well-paying jobs throughout the state. These changes will reinforce our distinction as one of the states best prepared to thrive in the New Economy.”
“Delaware families will be the end beneficiaries of these changes,” said Senate President Pro Tempore Patricia Blevins, D-Elsmere, the lead sponsor of the bill and State Senator for a district that includes DuPont’s Chestnut Run facility. “When we create more jobs, strengthen our economy and reward innovation, we all win. This package checks all those boxes, and is another example of the positive impact we can have when legislators work together to improve our State.”
“I’m happy to support this important legislation,” said Senate Minority Leader Gary Simpson, R-Milford. “Not only will it help keep a strong DuPont presence in Delaware, but perhaps more importantly, it will preserve the jobs of hundreds of highly trained employees in the state.”
“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 are advancing these changes, and we look forward to working to help the bill become law.”
“Research and Development continues to be a large investment and job creator for companies and is important for Delaware’s economic growth moving forward. This is exactly the sort of thing the legislature ought to be doing to help create jobs here, and the Delaware State Chamber of Commerce fully supports this,” 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.”
While passage of the bill is virtually a certainty, a few members of the General Assembly may charge that the bill amounts to corporate welfare at a time when benefits have been cut to the neediest.
The post-DowDuPont headquarters sites in the state would provide employment, at most, a few hundred people. The R&D credits could help the state retain hundreds, if not thousands of jobs.
