This Amendment to HB 364 does the following: (1) Removes the term "projects" from those activities considered qualified activities.

Plain English Breakdown

The original summary included details about awarding tax credits that were not fully supported in the plain language of the bill.

Amendment to HB 364

This amendment changes certain requirements for tax credits by removing 'projects' from qualified activities, lowering the minimum spending needed for eligibility, updating rules for loan-out companies, and setting a first-come-first-served awarding process.

What This Bill Does

• Removes the term 'projects' from activities that qualify for tax benefits.
• Decreases the minimum expenditure amount for tax credit eligibility from $500,000 to $100,000.
• Updates rules about loan-out companies and tax compliance to provide administrative clarity.
• Requires credits to be awarded on a first-come-first-served basis.

Who It Names or Affects

• Businesses that do qualified activities
• Loan-out companies with employees working in Delaware

Terms To Know

qualified activities

Activities that meet certain requirements and can get tax benefits.

loan-out company

A type of business where a person or group lends their services to another company for specific projects.

Limits and Unknowns

• The bill does not specify who will be in charge of awarding the tax credits.
• It is unclear how this amendment will affect businesses that already meet the old requirements but not the new ones.
• This summary only covers what is clearly stated in the official source material.

Official Summary Text

This Amendment to HB 364 does the following:
(1) Removes the term "projects" from those activities considered qualified activities.
(2) Decreases the minimum expenditure amount for tax credit eligibility from $500,000 to $100,000.
(3) Updates the provision relating to loan-out companies and tax compliance to provide administrative clarity.
(4) Requires credits to be awarded on a first-come-first-served basis and in accordance with the priorities outlined in the Act.

Current Bill Text

Legislation Document

SPONSOR:

Rep. Harris

HOUSE OF REPRESENTATIVES

153rd GENERAL ASSEMBLY

HOUSE AMENDMENT NO. 1

TO

HOUSE BILL NO. 364

AMEND House Bill No. 364 on line 22 by deleting “

projects,

” as it appears therein.

FURTHER AMEND House Bill No. 364 on line 73 by deleting “

$500,000

” as it appear therein and inserting in lieu thereof “

$100,000

”.

FURTHER AMEND House Bill No. 364 by deleting lines 95 through 104 in their entirety and inserting in lieu thereof the following:

“

A production company or its authorized payroll service company shall withhold Delaware income tax at the rate of 6% on all payments to loan-out companies for services performed in Delaware by the loan out company's employees and shall deposit such amounts with the State of Delaware. The amounts so withheld shall be deemed to have been withheld by the loan-out company on wages paid to its employees for services performed in Delaware and shall be allocated to the loan-out company’s employees in proportion to the payments made by the loan-out company to its employees for services performed in Delaware. For purposes of this chapter and notwithstanding any other provision in this chapter to the contrary, loan-out company nonresident employees performing services in Delaware shall be considered taxable nonresidents and shall be subject to income taxation in the taxable year in which the loan-out company's employees perform services in Delaware.

”.

FURTHER AMEND House Bill No. 364 by deleting lines 188 and 189 in their entirety and inserting in lieu thereof the following:

“

Division of Small Business, shall award credits on a first-come-first-served basis and in accordance with subsection (b) of this section.

”.

SYNOPSIS

This Amendment to HB 364 does the following:

(1) Removes the term "projects" from those activities considered qualified activities.

(2) Decreases the minimum expenditure amount for tax credit eligibility from $500,000 to $100,000.

(3) Updates the provision relating to loan-out companies and tax compliance to provide administrative clarity.

(4) Requires credits to be awarded on a first-come-first-served basis and in accordance with the priorities outlined in the Act.