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.

Bond refunding saves taxpayers $15 million

WILMINGTON, Del. – Delaware’s proactive fiscal management has been recognized with the announcement of the State’s triple-A bond ratings and an upgrade of the rating for Delaware Transportation Authority (DTA) bonds. The State’s ratings were issued in advance of the refunding of $123 million of Series 2009D Build America Bonds that will save Delaware taxpayers more than $15 million over the next decade. DTA’s ratings were issued as the Authority priced $138 million of new Series 2019 Transportation System Senior Revenue Bonds. Bond ratings reflect an issuer’s financial management policies and practices, ability to make future debt service payments, and economic strength, stability and diversity. Both the State and DTA’s bond issues were priced at interest rates that will result in historically low costs for Delaware taxpayers. 

“Delawareans expect us to responsibly manage taxpayer dollars, and that’s exactly what we’re doing,” said Governor John Carney. “We have an ongoing commitment to ensuring that our fiscal house is in order. These important bond issues and our excellent bond ratings will save us money, and help finance important infrastructure projects like schools and roadway projects all across our state.”

The State’s August refunding refinanced $123 million of outstanding debt through a competitive bid process resulting in a 1.12% all-in borrowing cost — the lowest in modern state history for debt of a similar maturity. The State general fund will realize savings of $1.12 million in the current fiscal year alone. The original bonds financed numerous capital projects including schools, libraries, and other state infrastructure projects.  

“The State’s very successful refinancing reflects a team effort by the Carney Administration, the General Assembly, and our financial and legal advisors,” said Secretary of Finance Rick Geisenberger. “Delaware’s premier bond rating reflects many years of prudent fiscal management and recent efforts to limit operating budget growth, boost reserves during good times, and steer one-time revenues to one-time projects. Our goal continues to be preserving the State’s financial flexibility while ensuring that public borrowing is done responsibly and affordably.”

DTA priced its $138 million of new bonds at a competitive all-in rate of 2.11%. This rate followed the announcement that DTA’s bond rating was upgraded by Moody’s Investor Services from Aa2 to Aa1 while Standard & Poor’s reaffirmed its AA+ rating. Moody’s also upgraded the Authority’s outstanding US 301 Project Revenue Bonds Series 2015 from A1 to Aa3 and its Transportation Infrastructure Finance and Innovation Act (TIFIA) Series 2015 Bonds from A2 to Aa3. The Delaware Department of Transportation’s steady reduction in its overall debt combined with continued positive trends in toll, DMV and motor fuel revenues helps lower the cost of capital and frees up funding to further maintain and improve transportation infrastructure throughout Delaware.    

“We are very pleased with the rating services’ upgrade, and having a strong rating enables the Department to get the most out of every taxpayer dollar,” said Secretary of Transportation Jennifer Cohan. “DelDOT is excited to continue delivering on Delaware’s largest Capital Transportation Program in its history.”

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Example Scam Letter April 2019

The Delaware Division of Revenue wants to alert citizens to a new taxpayer scam that is happening in Delaware. Victims may receive a letter from “The Bureau of Tax Enforcement” that threatens property seizure and wage garnishment unless they call a toll-free number to “avoid enforcement.”

“These scam mailings are designed to trick taxpayers into thinking they have received an official communication from the Division of Revenue,” warns Director Jennifer R. Hudson. The notices threaten the seizure of the taxpayer’s property if the recipient fails to make immediate payment. The scammers are accessing public records in order to include taxpayer-specific information on the notices to make them appear legitimate, and then using pressure tactics and fear to motivate the recipient into taking immediate action.

Taxpayers who think they may have received such a letter should contact the Division of Revenue at (302) 577-8200, option 3, with any questions. Taxpayers should also file a Consumer Complaint with the Delaware Department of Justice’s Consumer Protection Unit. Information about the complaint process is available at https://attorneygeneral.delaware.gov/fraud/cpu/ and the complaint form is available online – Consumer Complaint Form.