(Photo by Flickr user John Morgan, used under a Creative Commons license)
In a bipartisan effort, leaders from the state House and Senate introduced the Delaware Commitment to Innovation Act Wednesday. If passed, the act will do two things concerning tax credits to spur innovation and job growth in the state.
First, it’ll remove the annual $5 million expenditure cap for research and development tax credit, something only two other states have in place. Offering a full R&D tax credit — which would be about half the value of a company’s federal R&D credit — is expected to attract both startups and companies looking to expand research efforts.
Second, the bill modifies the New Economy Jobs tax credit to create an incentive for companies to bring their global corporate headquarters to Delaware. That means they’ll receive a tax credit based on the value of their total income tax withholding payments to Delaware.
The governor’s office said this bill has been a big part of what persuaded DuPont to locate two of its post-merger spinoff companies in Delaware. Gov. Jack Markell said the proposed reforms will save and create jobs in the state, and several others agreed.
“This will encourage businesses that are in the early stages of development to invest and locate here,” said House Speaker Pete Schwartzkopf (D-Rehoboth). “We can become a major hub for research and development.”
House Minority Leader Danny Short (R-Seaford) said that because of DuPont’s merger with Dow — and its subsequent effect on Delaware’s economy — the First State needs to create a new economic niche. “This legislation, which will encourage research and development on the macro and micro levels, is a step in the right direction,” Short said.-30-
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