Division of Revenue Director Jennifer R. Hudson has announced that Delaware will begin processing 2019 individual income tax returns on Monday, January 27, 2020. To expedite this process, citizens are encouraged to file their 2019 State of Delaware Personal Income Taxes online at de.gov/filetax or through their tax software provider.

The 2019 tax year filing deadline is Thursday, April 30, 2020. On average, refunds from electronically filed returns are issued within 2 weeks, while refunds from paper-filed returns average seven weeks or more. Last year, the average time to issue a refund for all tax filing methods combined was approximately 25 days.

If you still owe taxes from prior years, you may find yourself listed on Delaware’s Delinquent Taxpayers web page. To address outstanding balances, please contact the Division of Revenue’s Account Management Department at (302) 577-8785 and ask to speak to your account assignee. By legislative order, larger balances are targeted first for publication. Each quarter, the next 100 business taxpayers and 100 personal taxpayers who have balances over $1,000 are posted to this site.

Taxpayers should be aware that Delaware does not maintain reciprocity agreements with other states. As a result, anyone who is not a Delaware resident, but who has worked in Delaware, must file a Delaware tax return. Delaware Residents who work out-of-state are required to file returns with Delaware in addition to a return in the state where they worked. By law, Delaware employees should receive their W-2 employment forms by January 31, 2020 for any job worked during the 2019 calendar year. Those who haven’t received a W-2 by January 31st should contact their employer.

For filing information and more, please visit revenue.delaware.gov.

WILMINGTON, Del. – As Delaware officials prepare to issue $300 million of General Obligation Bonds later this month, the State has again received the highest possible bond ratings.  One of only a handful of states granted Triple-A status from each of the four major bond rating agencies, January’s ratings from Fitch Ratings, Moody’s Investor Services, S&P Global and Kroll Bond Rating Agency (KBRA) all cited Delaware’s long history of proactive fiscal management and recent efforts to boost reserves.

The agencies noted the successful efforts of Governor John Carney and the Delaware General Assembly to bolster reserves by creating a new Budget Stabilization Fund that has a current balance of $126 million with S&P stating that “we believe the state can maintain better credit characteristics than the U.S. in a stress scenario.”  

“Over the last three years, we have climbed out of a $400 million budget deficit to create a $200 million dollar surplus,” said Governor John Carney. “These are funds that will ensure Delaware has the flexibility to continue making improvements to our schools, our local economy, and the overall health of our state.”

The ratings agencies cited Delaware’s improving economy including the State’s growing banking, health care, and incorporations industries, as well as the acceleration of investment activity at the Port of Wilmington, the STAR Campus at the University of Delaware, and logistics facilities in Newport and Delaware City. 

Moody’s stated that “Delaware has exhibited strong budget management throughout this extended period of national economic expansion. Its conservative budgeting practices helped to rapidly rebuild its financial resilience after the Great Recession and to maintain strong balances and financial cushion.”

KBRA’s rating noted Delaware’s “strong financial position and liquidity and a diverse economy anchored by financial services, chemicals and related industries, the healthcare sector and higher education.”   Fitch stated that Delaware “has exceptional financial resilience and institutionalized protections are designed to ensure surplus operations.”

Ratings agencies assign status based on criteria that includes trends in that state’s economy, its government’s financial performance and management, debt load, long-term costs, and political structure. States whose status indicates that they have the ability to meet debt obligations during periods of recession or fiscal stress, or are able to adapt quickly to such conditions, are granted the highest ratings. Additionally, the higher a state’s credit rating, the lower their cost to repay the bonds.

“Delaware’s triple-A ratings are the result of the sustained hard work of all three branches of State government, all of whom share the same goal, to operate our State as efficiently as possible while ensuring the financial security of current and future generations of taxpayers,” said Finance Secretary Rick Geisenberger.

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Businesses subject to the Hazardous Substance Cleanup Act (HSCA) should be aware that a new tax rate of 1.0429% will be going into effect on January 1, 2020. This will apply to the taxable gross receipts from the sale of petroleum or petroleum products. The Division of Revenue will be updating the rate in their online system before the effective date of January 1, 2020. The tax rate is currently 1.5244%, through December 31, 2019.

Legislation was passed in 2018 calling for future rate increases to be based on a lookback period. These adjustable rates cannot be lower than 0.675% or greater than 1.675%, and are calculated by multiplying 0.9% (the original rate) by a fraction – the numerator of which is $15,000,000 and the denominator of which is the total collections in the fund during the lookback period (July 1 to June 30 of the prior year). The HSCA was passed by the Delaware General Assembly in July of 1990 to ensure funding for the cleanup of facilities with a release or imminent threat of release of hazardous substances. The Department of Natural Resources and Environmental Control has identified over 700 sites in Delaware as potential hazardous substance release sites.

If you have questions about the new adjustable tax rate, please contact the Delaware Division of Revenue at (302) 577-8205.

The implementation of last year’s Tax Cuts and Jobs Act (TCJA) continues to affect many corporate taxpayers, particularly those that have filed extensions for the 2018 tax year. In Delaware, corporate income tax returns that are under extension are due on the same date as extended federal corporate income tax returns. Many taxpayer-related organizations have requested that Delaware offer relief from late-filing penalties for those corporate taxpayers who file their 2018 Delaware income tax return after the deadline, but on or before November 15. Because the Division of Revenue recognizes that some taxpayers may have trouble meeting Delaware’s extended filing deadline because the return due date coincides with the extended due date for federal returns, Delaware will be implementing a grace period for corporate taxpayers who file on or before November 15.

While the grace period should automatically eliminate the late-filing penalty for any Forms 1100 and 1100-S that are submitted on or before November 15, 2019, taxpayers should be aware that if they do receive a notice of assessment, a protest may be filed with the Tax Conferee. This should be sent via email to taxconferee@delaware.gov, or by mail, in writing, to:

Campbell Hay, Esquire
Tax Conferee
Delaware Division of Revenue
P. O. Box 8714
Wilmington, DE 19801

If you have any questions, please contact the Delaware Division of Revenue at (302) 577-8205.

Online portal to streamline business licensing, registration, employer requirements

NEWARK, Del. – Governor John Carney on Wednesday officially launched a new online tool to help streamline documentation and reporting requirements for new businesses. The new Delaware One Stop, available at onestop.delaware.gov, allows businesses to interact with core state agencies whether they are starting out or ready to grow.

Delaware One Stop is a convenient, centralized transactional platform created to help business owners work through the necessary steps to begin operation in Delaware. Using one website, businesses can apply and pay for a Delaware business license, make required filings with the Department of Labor, and create formation documents for a legal entity with the Division of Corporations.

“One of the things we hear all the time from small businesses is how hard it can be to figure out what you need from the state in order to open your doors. We know that entrepreneurs just want to take care of those things quickly and get to work, but state government doesn’t always make it easy,” said Governor John Carney. “Today we’re taking a big step in that direction and bringing many of those functions together on a single portal – Delaware One Stop.”

One Stop is the product of a collaborative effort among multiple state agencies and real-world entrepreneurs that allows users to access many services via a single login. This offers a clear road map to ensure continuous engagement between businesses and various state agencies.

“We want to make it easier for businesses to succeed in Delaware,” said Secretary of Finance Rick Geisenberger. “With the new Delaware One Stop portal, we’re partnering among multiple state agencies to leverage technology that makes registering a business seamless, faster, and more efficient.”

The core functions of the new site include business license registration via the Division of Revenue, hiring reporting through the Division of Unemployment Insurance, and coverage verification with the Office of Workers’ Compensation. 

“We’re excited about the launching of Delaware’s new One Stop portal,” said Secretary of Labor Cerron Cade. “Leveraging technology to create better efficiencies in business creation and compliance only continues to reinforce Delaware’s position as a premier destination for businesses, entrepreneurs, and their workers.”

New to One Stop is a step-by-step guide to creating business entity formation documents for submission to the Division of Corporations, helping users on the path to organizing a Delaware corporation, partnership, or LLC.

“Delaware’s world-leading corporate franchise isn’t just for the Fortune 500; our home-grown small businesses have the same access to the services of the Division of Corporations when it comes to forming their own legal entities,” said Secretary of State Jeff Bullock. “One Stop will absolutely change the way Delaware entrepreneurs think about dealing with state government.”

The new site is a significant rebuild of the original One Stop portal, launched in 2005. Designed and built by vendor Breakline Digital in cooperation with the Delaware Government Information Center (GIC) and the Department of Technology and Information (DTI), the modern design prioritizes user experience and revolves around an account dashboard that tracks and saves progress. The new One Stop is hosted in cloud-based architecture built on the trusted Salesforce platform.

“The Delaware Business One Stop portal is the initial iteration of our new unified citizen engagement platform,” said Delaware Chief Information Officer James Collins. “We’re striving for all citizens and businesses to have access — anywhere, anytime and from any device — to an array of secure digital government services through a single point of entry. We couldn’t be more proud of this initiative to ease the process of doing business in Delaware.”

One Stop also features an integrated survey that takes the pulse of users who seem stuck on one screen for an extended period of time, allowing for real-time feedback and suggestions for improvement.

Before launch, members of the business community tested One Stop for its real-world usability.

“The new streamlined process brings an efficient solution to form a new business in Delaware. The State Chamber applauds the Governor’s initiative to make the new One Stop website a reality,” said Mike Quaranta, president of the Delaware State Chamber of Commerce, which assisted with reviewing and testing the One Stop site prior to launch.

Delaware One Stop Tips

• The Division of Revenue Business License is $75 per year and is pro-rated (renew by the end of December for the next calendar year).
• You can print a temporary business license from the One Stop; you will receive your official copy in the mail in about a month if all looks good.
• After you register your business, you will need to pay gross receipts tax.
• Businesses that hire employees need to register with Department of Labor – with both the Division of Unemployment Insurance and the Division of Worker’s Compensation. You can do this from One Stop under “Report Hiring” as soon as you know you’ll have employees.
• Other licenses, such as professional licenses, environmental permits, and local/county licenses, are not yet included in the One Stop system. You need to apply for these separately.