Subchapter VIII. Credit for Research and Development Expenses
§ 2070. Amount of credit and applicable procedures.
(a) A taxpayer who takes into account for purposes of Delaware income taxation Delaware qualified research and development
expenses in a taxable year may apply for a research and development tax credit as provided in this subchapter. Taxpayers must
complete an application for the credit on a form prescribed by the Director. Such application must be received by the Director
no later than September 15 of a tax year.
(b) Subject to the limitation of § 2075 of this title on overall credits and the limitation described in subsection (c) of
this section, a taxpayer may elect a Delaware research and development tax credit for the taxable year equal to: (1) 10% of
the excess of the taxpayer's total Delaware qualified research and development expenses for the taxable year over the taxpayer's
Delaware base amount, or (2) 50% of Delaware's apportioned share of taxpayer's federal research and development tax credit
calculated using the alternative incremental credit method under § 41(c)(4) of the Internal Revenue Code of 1986 [26 U.S.C.
§ 41(c)(4)], using federal definitions and methodology. Delaware's apportioned share of the federal credit shall be the amount
of the alternative incremental credit the taxpayer can claim under § 41(c)(4) [26 U.S.C. § 41(c)(4)], multiplied by a percentage
equal to the ratio of the taxpayer's Delaware qualified research and development expenses for the taxable year to the taxpayer's
total qualified research and development expenses for the taxable year. Taxpayer's Delaware research and development tax credit
determination election shall be an annual election, and shall be independent of taxpayer's federal research and development
tax credit determination.
(c) The research and development tax credit calculated pursuant to subsection (b) of this section shall not exceed in any
one taxable year 50% of the qualified tax liability for that taxable year.
(d) By December 15 following the date of the application, the Director shall notify the taxpayer of the amount of the taxpayer's
approved Delaware research and development tax credit taking into account the limitation contained in § 2075 of this title.
(e) A research and development tax credit approved by the Director shall be applied against the taxpayer's qualified tax liability
for the taxable year in which the qualified research and development expenses were taken into account for purposes of Delaware
income taxation. In the case of partnerships, the credit shall be allocated among partners as provided in § 41(f)(2)(B) of
the Internal Revenue Code of 1986 [26 U.S.C. § 41(f)(2)(B)].
(f) If, by virtue of the limitation described in subsection (c) of this section, the taxpayer cannot use the entire amount
of the approved Research and Development Tax Credit for the taxable year in which it is first approved, then the approved
excess may be carried over to succeeding taxable years and used as a credit against the qualified tax liability of the taxpayer
for those taxable years. The approved Research and Development Tax Credit provided by this chapter may be carried over and
applied to no more than 15 succeeding taxable years following the first taxable year for which the taxpayer was entitled to
claim the credit.
(g) A taxpayer is not entitled to carry back or assign an unused research and development tax credit.
72 Del. Laws, c. 23, § 4; 77 Del. Laws, c. 329, § 64(c).;
§ 2071. Application of Internal Revenue Code.
Any term used in this subchapter shall have the same meaning as when used in a comparable context in the Internal Revenue
laws of the United States, unless a different meaning is clearly required or unless any provision of this subchapter ascribes
a different meaning to such term. References to the Internal Revenue Code shall mean the sections of the Internal Revenue
Code as existing on any date on which any expenses subject to credit under this subchapter are taken into account for purposes
of Delaware income taxation. However, if those sections of the Internal Revenue Code referenced in this chapter are repealed
or terminated, references to the Internal Revenue Code shall mean those sections last having full force and effect. If, after
repeal or termination, the Internal Revenue Code sections are revised or reenacted, references herein to Internal Revenue
Code sections shall mean those revised or reenacted sections.
72 Del. Laws, c. 23, § 4.;
§ 2072. Determination of qualified research and development expenses.
In prescribing standards for determining which qualified research and development expenses are considered Delaware qualified
research and development expenses for purposes of computing the credit provided by this chapter, the Director may consider
the location where the services are performed and other factors that the Director within the Director's sound discretion reasonably
determines are relevant for the determination.
72 Del. Laws, c. 23, § 4; 70 Del. Laws, c. 186, § 1.;
§ 2073. Time limitations.
(a) The Director shall not approve a research and development tax credit under this chapter for taxable years ending after
December 31, 2011.
(b) The termination date in § 41(h) of the Internal Revenue Code [26 U.S.C. § 41(h)] does not apply to a taxpayer who is eligible
for the Research and Development Tax Credit under this chapter for the taxable year in which the Delaware qualified research
and development expenses are taken into account for purposes of Delaware income taxation.
72 Del. Laws, c. 23, § 4; 75 Del. Laws, c. 140, § 2; 77 Del. Laws, c. 329, § 64(d).;
§ 2074. Transitional rule.
For the purpose of calculating Delaware qualified research and development expenses used in calculating the Delaware base
amount for taxable years ending after December 31, 1995, and before January 1, 2000, if the taxpayer has taken into account
for purposes of Delaware income taxation qualified research and development expenses both inside and outside this State and
is unable to determine the amount of Delaware qualified research and development expenses, the taxpayer may file a request
with the Director to calculate Delaware qualified research and development expenses by multiplying qualified research and
development expenses in all states by the average of the payroll and property factors calculated in accordance with § 1903
of this title for the corresponding taxable years in question. The request shall set forth reasonable cause for the taxpayer's
inability to make such determination and may use the calculation specified in this section only upon approval of the Director.
72 Del. Laws, c. 23, § 4.;
§ 2075. Limitation on credits.
(a) The total amount of credits approved by the Director with respect to all taxpayers shall not exceed $5,000,000 in any
State fiscal year.
(b) If the total amount of research and development tax credits for which all taxpayers applied in any year exceeds the amount
allocated for those credits, then the research and development tax credit to be received by each applicant shall be the product
of $5,000,000 multiplied by a fraction, the numerator of which is the eligible research and development tax credit applied
for by the applicant and the denominator is the total of all eligible research and development tax credits applied for by
all applicants.
Subchapter VIII. Credit for Research and Development Expenses
§ 2070. Amount of credit and applicable procedures.
(a) A taxpayer who takes into account for purposes of Delaware income taxation Delaware qualified research and development
expenses in a taxable year may apply for a research and development tax credit as provided in this subchapter. Taxpayers must
complete an application for the credit on a form prescribed by the Director. Such application must be received by the Director
no later than September 15 of a tax year.
(b) Subject to the limitation of § 2075 of this title on overall credits and the limitation described in subsection (c) of
this section, a taxpayer may elect a Delaware research and development tax credit for the taxable year equal to: (1) 10% of
the excess of the taxpayer's total Delaware qualified research and development expenses for the taxable year over the taxpayer's
Delaware base amount, or (2) 50% of Delaware's apportioned share of taxpayer's federal research and development tax credit
calculated using the alternative incremental credit method under § 41(c)(4) of the Internal Revenue Code of 1986 [26 U.S.C.
§ 41(c)(4)], using federal definitions and methodology. Delaware's apportioned share of the federal credit shall be the amount
of the alternative incremental credit the taxpayer can claim under § 41(c)(4) [26 U.S.C. § 41(c)(4)], multiplied by a percentage
equal to the ratio of the taxpayer's Delaware qualified research and development expenses for the taxable year to the taxpayer's
total qualified research and development expenses for the taxable year. Taxpayer's Delaware research and development tax credit
determination election shall be an annual election, and shall be independent of taxpayer's federal research and development
tax credit determination.
(c) The research and development tax credit calculated pursuant to subsection (b) of this section shall not exceed in any
one taxable year 50% of the qualified tax liability for that taxable year.
(d) By December 15 following the date of the application, the Director shall notify the taxpayer of the amount of the taxpayer's
approved Delaware research and development tax credit taking into account the limitation contained in § 2075 of this title.
(e) A research and development tax credit approved by the Director shall be applied against the taxpayer's qualified tax liability
for the taxable year in which the qualified research and development expenses were taken into account for purposes of Delaware
income taxation. In the case of partnerships, the credit shall be allocated among partners as provided in § 41(f)(2)(B) of
the Internal Revenue Code of 1986 [26 U.S.C. § 41(f)(2)(B)].
(f) If, by virtue of the limitation described in subsection (c) of this section, the taxpayer cannot use the entire amount
of the approved Research and Development Tax Credit for the taxable year in which it is first approved, then the approved
excess may be carried over to succeeding taxable years and used as a credit against the qualified tax liability of the taxpayer
for those taxable years. The approved Research and Development Tax Credit provided by this chapter may be carried over and
applied to no more than 15 succeeding taxable years following the first taxable year for which the taxpayer was entitled to
claim the credit.
(g) A taxpayer is not entitled to carry back or assign an unused research and development tax credit.
72 Del. Laws, c. 23, § 4; 77 Del. Laws, c. 329, § 64(c).;
§ 2071. Application of Internal Revenue Code.
Any term used in this subchapter shall have the same meaning as when used in a comparable context in the Internal Revenue
laws of the United States, unless a different meaning is clearly required or unless any provision of this subchapter ascribes
a different meaning to such term. References to the Internal Revenue Code shall mean the sections of the Internal Revenue
Code as existing on any date on which any expenses subject to credit under this subchapter are taken into account for purposes
of Delaware income taxation. However, if those sections of the Internal Revenue Code referenced in this chapter are repealed
or terminated, references to the Internal Revenue Code shall mean those sections last having full force and effect. If, after
repeal or termination, the Internal Revenue Code sections are revised or reenacted, references herein to Internal Revenue
Code sections shall mean those revised or reenacted sections.
72 Del. Laws, c. 23, § 4.;
§ 2072. Determination of qualified research and development expenses.
In prescribing standards for determining which qualified research and development expenses are considered Delaware qualified
research and development expenses for purposes of computing the credit provided by this chapter, the Director may consider
the location where the services are performed and other factors that the Director within the Director's sound discretion reasonably
determines are relevant for the determination.
72 Del. Laws, c. 23, § 4; 70 Del. Laws, c. 186, § 1.;
§ 2073. Time limitations.
(a) The Director shall not approve a research and development tax credit under this chapter for taxable years ending after
December 31, 2011.
(b) The termination date in § 41(h) of the Internal Revenue Code [26 U.S.C. § 41(h)] does not apply to a taxpayer who is eligible
for the Research and Development Tax Credit under this chapter for the taxable year in which the Delaware qualified research
and development expenses are taken into account for purposes of Delaware income taxation.
72 Del. Laws, c. 23, § 4; 75 Del. Laws, c. 140, § 2; 77 Del. Laws, c. 329, § 64(d).;
§ 2074. Transitional rule.
For the purpose of calculating Delaware qualified research and development expenses used in calculating the Delaware base
amount for taxable years ending after December 31, 1995, and before January 1, 2000, if the taxpayer has taken into account
for purposes of Delaware income taxation qualified research and development expenses both inside and outside this State and
is unable to determine the amount of Delaware qualified research and development expenses, the taxpayer may file a request
with the Director to calculate Delaware qualified research and development expenses by multiplying qualified research and
development expenses in all states by the average of the payroll and property factors calculated in accordance with § 1903
of this title for the corresponding taxable years in question. The request shall set forth reasonable cause for the taxpayer's
inability to make such determination and may use the calculation specified in this section only upon approval of the Director.
72 Del. Laws, c. 23, § 4.;
§ 2075. Limitation on credits.
(a) The total amount of credits approved by the Director with respect to all taxpayers shall not exceed $5,000,000 in any
State fiscal year.
(b) If the total amount of research and development tax credits for which all taxpayers applied in any year exceeds the amount
allocated for those credits, then the research and development tax credit to be received by each applicant shall be the product
of $5,000,000 multiplied by a fraction, the numerator of which is the eligible research and development tax credit applied
for by the applicant and the denominator is the total of all eligible research and development tax credits applied for by
all applicants.
Subchapter VIII. Credit for Research and Development Expenses
§ 2070. Amount of credit and applicable procedures.
(a) A taxpayer who takes into account for purposes of Delaware income taxation Delaware qualified research and development
expenses in a taxable year may apply for a research and development tax credit as provided in this subchapter. Taxpayers must
complete an application for the credit on a form prescribed by the Director. Such application must be received by the Director
no later than September 15 of a tax year.
(b) Subject to the limitation of § 2075 of this title on overall credits and the limitation described in subsection (c) of
this section, a taxpayer may elect a Delaware research and development tax credit for the taxable year equal to: (1) 10% of
the excess of the taxpayer's total Delaware qualified research and development expenses for the taxable year over the taxpayer's
Delaware base amount, or (2) 50% of Delaware's apportioned share of taxpayer's federal research and development tax credit
calculated using the alternative incremental credit method under § 41(c)(4) of the Internal Revenue Code of 1986 [26 U.S.C.
§ 41(c)(4)], using federal definitions and methodology. Delaware's apportioned share of the federal credit shall be the amount
of the alternative incremental credit the taxpayer can claim under § 41(c)(4) [26 U.S.C. § 41(c)(4)], multiplied by a percentage
equal to the ratio of the taxpayer's Delaware qualified research and development expenses for the taxable year to the taxpayer's
total qualified research and development expenses for the taxable year. Taxpayer's Delaware research and development tax credit
determination election shall be an annual election, and shall be independent of taxpayer's federal research and development
tax credit determination.
(c) The research and development tax credit calculated pursuant to subsection (b) of this section shall not exceed in any
one taxable year 50% of the qualified tax liability for that taxable year.
(d) By December 15 following the date of the application, the Director shall notify the taxpayer of the amount of the taxpayer's
approved Delaware research and development tax credit taking into account the limitation contained in § 2075 of this title.
(e) A research and development tax credit approved by the Director shall be applied against the taxpayer's qualified tax liability
for the taxable year in which the qualified research and development expenses were taken into account for purposes of Delaware
income taxation. In the case of partnerships, the credit shall be allocated among partners as provided in § 41(f)(2)(B) of
the Internal Revenue Code of 1986 [26 U.S.C. § 41(f)(2)(B)].
(f) If, by virtue of the limitation described in subsection (c) of this section, the taxpayer cannot use the entire amount
of the approved Research and Development Tax Credit for the taxable year in which it is first approved, then the approved
excess may be carried over to succeeding taxable years and used as a credit against the qualified tax liability of the taxpayer
for those taxable years. The approved Research and Development Tax Credit provided by this chapter may be carried over and
applied to no more than 15 succeeding taxable years following the first taxable year for which the taxpayer was entitled to
claim the credit.
(g) A taxpayer is not entitled to carry back or assign an unused research and development tax credit.
72 Del. Laws, c. 23, § 4; 77 Del. Laws, c. 329, § 64(c).;
§ 2071. Application of Internal Revenue Code.
Any term used in this subchapter shall have the same meaning as when used in a comparable context in the Internal Revenue
laws of the United States, unless a different meaning is clearly required or unless any provision of this subchapter ascribes
a different meaning to such term. References to the Internal Revenue Code shall mean the sections of the Internal Revenue
Code as existing on any date on which any expenses subject to credit under this subchapter are taken into account for purposes
of Delaware income taxation. However, if those sections of the Internal Revenue Code referenced in this chapter are repealed
or terminated, references to the Internal Revenue Code shall mean those sections last having full force and effect. If, after
repeal or termination, the Internal Revenue Code sections are revised or reenacted, references herein to Internal Revenue
Code sections shall mean those revised or reenacted sections.
72 Del. Laws, c. 23, § 4.;
§ 2072. Determination of qualified research and development expenses.
In prescribing standards for determining which qualified research and development expenses are considered Delaware qualified
research and development expenses for purposes of computing the credit provided by this chapter, the Director may consider
the location where the services are performed and other factors that the Director within the Director's sound discretion reasonably
determines are relevant for the determination.
72 Del. Laws, c. 23, § 4; 70 Del. Laws, c. 186, § 1.;
§ 2073. Time limitations.
(a) The Director shall not approve a research and development tax credit under this chapter for taxable years ending after
December 31, 2011.
(b) The termination date in § 41(h) of the Internal Revenue Code [26 U.S.C. § 41(h)] does not apply to a taxpayer who is eligible
for the Research and Development Tax Credit under this chapter for the taxable year in which the Delaware qualified research
and development expenses are taken into account for purposes of Delaware income taxation.
72 Del. Laws, c. 23, § 4; 75 Del. Laws, c. 140, § 2; 77 Del. Laws, c. 329, § 64(d).;
§ 2074. Transitional rule.
For the purpose of calculating Delaware qualified research and development expenses used in calculating the Delaware base
amount for taxable years ending after December 31, 1995, and before January 1, 2000, if the taxpayer has taken into account
for purposes of Delaware income taxation qualified research and development expenses both inside and outside this State and
is unable to determine the amount of Delaware qualified research and development expenses, the taxpayer may file a request
with the Director to calculate Delaware qualified research and development expenses by multiplying qualified research and
development expenses in all states by the average of the payroll and property factors calculated in accordance with § 1903
of this title for the corresponding taxable years in question. The request shall set forth reasonable cause for the taxpayer's
inability to make such determination and may use the calculation specified in this section only upon approval of the Director.
72 Del. Laws, c. 23, § 4.;
§ 2075. Limitation on credits.
(a) The total amount of credits approved by the Director with respect to all taxpayers shall not exceed $5,000,000 in any
State fiscal year.
(b) If the total amount of research and development tax credits for which all taxpayers applied in any year exceeds the amount
allocated for those credits, then the research and development tax credit to be received by each applicant shall be the product
of $5,000,000 multiplied by a fraction, the numerator of which is the eligible research and development tax credit applied
for by the applicant and the denominator is the total of all eligible research and development tax credits applied for by
all applicants.
