Section 2010 - DefinitionsAs used in this subchapter and in subchapters III, V and VIII of this chapter:
(1) "Qualified facility" is any qualified property located within this State that constitutes a new facility or an expanded facility and that is used by the taxpayer in or in connection with a qualified activity. (2) "Qualified property" is: a. Any building and its structural components and any other improvement to real property;b. The land on which such building or other improvement is located; andc. Any machinery, equipment and other tangible personal property (other than inventory and property held by the taxpayer primarily for sale to customers in the ordinary course of the taxpayer's trade or business) located in such building or other improvement or located on such land. If any property is owned, leased or subleased by the taxpayer in common with any other person or persons, such property may constitute "qualified property" only to the extent of the taxpayer's proportionate interest.
(3) "Qualified activity" is: a. Any activity constituting manufacturing within the meaning of § 2701(2) of this title (other than any repair, refurbishing, retooling (such as retooling by an automobile manufacturer), recycling or other similar process or procedure that merely preserves or restores the value of a product or that does not change the inherent nature of a product or material);b. Engaging in business as a wholesaler, as defined in § 2901(21) of this title, or as a drayperson, as defined in § 2301(a)(7) of this title;c. The operation of any laboratory or other similar facility for the purpose of scientific, agricultural or industrial research, development or testing;d. The administration, management or support operations, including marketing, of any activity described in paragraphs (3)a. through k. of this section;e. Any activity more than 50% of whose annual gross receipts are derived from computer processing or data preparation or processing services, including data entry (but not word processing) and making data processing equipment available on an hourly or time-sharing basis;f. Any activity more than 50% of whose annual gross receipts are derived from engineering services, including providing and supervising the taxpayer's engineering staff on temporary contract to other firms. The term "engineering services" does not include businesses providing engineering personnel but not general supervision; nor does it include businesses primarily engaged in architectural or photogrammetric engineering;g. Any activity more than 50% of whose annual gross receipts are derived from consumer credit reporting services, including adjustment and collection services and credit reporting services. "Adjustment and collection services" are establishments primarily engaged in the collection or adjustment of claims, other than insurance. "Credit reporting services" are establishments primarily engaged in providing mercantile and consumer credit reporting services;h. Any activity more than 50% of whose annual gross receipts are derived from the sale at wholesale of computer software other than custom software by the developer of such software;i. Telecommunications services which, for purposes of this chapter, shall mean the administration, supervision, maintenance, repair and deployment of the physical infrastructure associated with the provision of telecommunications services, including, but not limited to, the receipt of requests for service and the dispatch of repair and maintenance personnel; the coordination, installation and record activity for the initiation of telecommunication services, including the installation of equipment; the maintenance of records and operations information regarding a telecommunications system or network; and engineering and construction services related to the deployment of infrastructure for a telecommunications system or network;j. Any activity more than 50% of whose annual gross receipts are derived from aviation services. The term "aviation services" means a business conducted by an employer in Delaware: 1. At an airport owned or operated by: B. Any political subdivision of the State,C. Any agency or instrumentality of the State or of its political subdivisions, orD. A bi-state authority created by a compact between states and approved by the Congress of the United States,2. Employing at least 100 qualified employees,3. Constituting the inspection, maintenance, repair, overhaul or remanufacture of aircraft, aircraft engines and other aircraft components or parts; the performance of retrofits of aircraft engines and other components to aircraft and the performance of other modifications to aircraft (including interior and exterior modifications, whether to new or used aircraft, and the design, engineering, installation and certification of such modifications); the sale of aircraft components or parts and lubricants or other consumable goods in connection with the foregoing activities; or any combination of the foregoing activities; ork. The year-round operation of a building or other permanent structures on the same parcel of land consisting, in the aggregate, of no less than 400,000 square feet of enclosed, climate-controlled space used for growing fruits or vegetables.l. Any combination of the activities described in paragraphs (3)a. through (3)k. of this section. (4) "New facility" is any qualified property (other than an expanded facility or a replacement facility) placed in service by the taxpayer as owner, lessee or sublessee after December 31, 1984; provided, however, that such phrase shall not include any property the original use of which commenced prior to the time the taxpayer placed such property in service if: a. At any time within 1 year after the date the taxpayer placed such property in service, the taxpayer or a related person uses such property in or in connection with any qualified activity; andb. Such property was used by any person, at any time within the 1-year period ending on the date the taxpayer placed such property in service, in the same or substantially the same qualified activity.(5) "Expanded facility" is any qualified property (other than a replacement facility) resulting from the acquisition, construction, reconstruction, installation or erection of improvements or additions to existing property (not including any improvement or addition resulting from a repair, refurbishing, retooling (such as retooling by an automobile manufacturer), recycling or other similar process or procedure that merely preserves or restores the value of an existing facility, and not including any improvement or addition that, in the determination of the Secretary, does not constitute an integral part of a qualified activity), if such improvements or additions are placed in service by the taxpayer as owner, lessee or sublessee after December 31, 1984, but only to the extent of the taxpayer's qualified investment in such improvements or additions. For property placed in service after July 1, 1992, a facility which constitutes a replacement facility, as defined in paragraph (6) of this section, shall be deemed an expanded facility, and the investment shall be deemed a qualified investment, to the extent the taxpayer's investment in the replacement facility exceeds the greater of: a. One hundred and fifty percent of the unadjusted cost basis of the facility which is being replaced; orb. One hundred percent of the market value of the facility which is being replaced.(6) "Replacement facility" is any property (other than an expanded facility) that replaces or supersedes any other property located within this State that:a. The taxpayer or a related person used in or in connection with any activity for more than 2 years during the period of the 5 consecutive years ending on the date the replacement or superseding property is placed in service by the taxpayer; andb. Is not used by the taxpayer or a related person in or in connection with any qualified activity for a continuous period of 1 year or more commencing with the date the replacement or superseding property is placed in service by the taxpayer.(7) "Placed in service" and "original use" shall have the meanings ascribed to such phrases under § 167 of the Internal Revenue Code ( 26 U.S.C. § 167 ), and regulations promulgated thereunder.(8) "Qualified employee" is a person employed within this State on a regular and full-time basis.(9) "Qualified investment" for any taxable year is the value of a qualified facility as of the last business day of such taxable year. Such value during any taxable year of the taxpayer shall be:a. If the qualified facility is owned by the taxpayer, the original cost of such facility to the taxpayer; orb. If the qualified facility is leased or subleased by the taxpayer, 8 times the net annual rent paid or incurred by the taxpayer for such facility. The net annual rent shall be the gross rent paid or incurred by the taxpayer for such facility during the taxable year, less any gross rental income received by the taxpayer from sublessees of any portion of such facility during such taxable year.(10) "Related person" means: a. A corporation, partnership, association or trust controlled by the taxpayer;b. An individual, corporation, partnership, association or trust that is in control of the taxpayer; orc. A corporation, partnership, association or trust controlled by an individual, corporation, partnership, association or trust that is in control of the taxpayer. For purposes of this paragraph, "control," with respect to a corporation, means ownership, directly or indirectly, of stock possessing 50 percent or more of the total combined voting power of all classes of the stock of such corporation entitled to vote and 50 percent or more of the total number of shares of all other classes of such corporation's stock; "control," with respect to a trust, means ownership, directly or indirectly, of 50 percent or more of the beneficial interest in the principal or income of such trust. The ownership of stock in a corporation, of a capital or profits interest in a partnership or association or of a beneficial interest in a trust shall be determined in accordance with the rules for constructive ownership of stock provided in § 267(c) of the Internal Revenue Code ( 26 U.S.C. § 267(c) ) other than paragraph (c)(3) of such section.
(11) "Qualified facility gross receipts" means the total Delaware gross receipts (as defined and computed under those provisions of Chapter 23, 27 or 29 of this title that apply to the qualified activity in question) attributable to and derived by the taxpayer from the operation of the qualified facility in question.(12) "Secretary" means the Secretary of Finance or the Secretary's delegate.(13) "Taxpayer" means an individual pass-through entity, as defined in § 1601 of this title, or corporation.(14) "Full-time employment" means employment of 1 individual for at least 35 hours per week, not including absences excused by reason of vacations, illness, holidays or similar causes.(15) "Health care benefits" means financial protection against the medical care cost arising from disease and accidental bodily injury for which cost the employer pays at least 50% for employees employed by the employer for a continuous period of 6 months or more.(16) "Brownfield" shall have the meaning set forth in § 9103 of Title 7.(17) "Gross receipts" shall have the same definition as that contained in the denominator described in § 1903(b)(6)c. of this title plus the amount of federal taxable income of the taxpayer attributable to patent and copyright royalties.(18) "Delaware base amount" shall mean the base amount as defined in § 41(c) of the Internal Revenue Code of 1986, except that references to "qualified research expenses" shall mean "Delaware qualified research and development expenses" and references to "qualified research" shall mean "Delaware qualified research and development." References to "fixed base percentage" shall mean the percentage which the aggregate Delaware qualified research and development expenses for the 4 taxable years immediately preceding the taxable year in which the expenses are taken into account for purposes of Delaware income taxation bear to the aggregate gross receipts for such years. The fixed base percentage for a taxpayer who has fewer than 4 but at least 1 taxable year with gross receipts and Delaware qualified research and development expenses shall be determined in the same manner using only the number of immediately preceding taxable years in which both existed to arrive at the percentage. In the event the taxpayer has in such 4 immediately preceding taxable years no year in which it had both gross receipts and Delaware qualified research and development expenses, the fixed base percentage shall be deemed to be zero.(19) "Delaware qualified research and development" shall mean qualified research as defined in § 41(d) of the Internal Revenue Code of 1986 ( Public Law 99-514, 26 U.S.C. § 41(d) ) that is conducted in this State. The funding of research and development by any person or entity under common control with the ultimate parent corporation of the taxpayer shall not constitute "funded research" as described in § 41(d)(4)(H) of the Internal Revenue Code of 1986 for the purpose of determining Delaware qualified research and development hereunder.(20) "Delaware qualified research and development expenses" shall mean qualified research expenses as defined in § 41(b) of the Internal Revenue Code of 1986 ( Public Law 99-514, 26 U.S.C. § 41(b) ) taken into account for purposes of Delaware income taxation for Delaware qualified research and development.(21) "Qualified tax liability" shall mean the liability for taxes imposed under Chapters 19 and 11 of this title on corporations, shareholders of an S corporation, sole proprietors, partners or members of any other pass-through entity eligible to apply for credits under this subchapter remaining after application of all other credits allowed under this chapter. (22) "Research and development tax credit" shall mean the credit provided under § 2070 of this title.(23) "Clean energy technology device" shall mean:a. Solar power devices, which shall mean devices or systems that use photovoltaic solar cells to produce electricity or that use solar energy to heat water;b. Fuel cells, which shall mean devices or systems that use an electrochemical generator that converts the chemical energy of a fuel and an oxidant directly to electricity;c. Wind power devices, which shall mean devices or systems that convert the motion of wind into electric power; or,d. Geothermal power devices, which shall mean devices or systems that use the temperature differentials between the atmosphere and subterranean areas to heat or cool buildings or to heat water.(24) "Clean energy technology device manufacturing" shall mean any activity constituting manufacturing within the meaning of § 2701(2) of this title (other than any repair, refurbishing, retooling, recycling or other similar process or procedure that merely preserves or restores the value of a product or that does not change the inherent nature of a product or material) of clean energy technology devices.Amended by Laws 2023, ch. 134,s 1, eff. 8/3/2023.62 Del. Laws, c. 155, §3; 62 Del. Laws, c. 328, §1; 64 Del. Laws, c. 460, §§1, 2; 67 Del. Laws, c. 120, §1; 68 Del. Laws, c. 6, §1; 68 Del. Laws, c. 202, §§1, 4 - 6, 8, 13, 18; 70 Del. Laws, c. 186, § 1; 70 Del. Laws, c. 219, § 1; 70 Del. Laws, c. 487, §§ 1, 12 - 14, 22; 72 Del. Laws, c. 23, §§ 1 - 3; 72 Del. Laws, c. 442, § 1; 72 Del. Laws, c. 467, § 4; 73 Del. Laws, c. 183, § 7; 75 Del. Laws, c. 352, § 33; 76 Del. Laws, c. 78, § 2; 77 Del. Laws, c. 86, § 30; 77 Del. Laws, c. 412, § 2; 78 Del. Laws, c. 1, § 1; 78 Del. Laws, c. 47, §§ 2 - 6; 78 Del. Laws, c. 100, § 1.;