By Roneshia Thomas
From the May / June 2023 Issue
Home to a diverse range of industries, Delaware is consistently one of the lowest business cost and lowest tax burden states in the United States.
To ensure the proper workforce for companies choosing Delaware is available, the state continues to foster its world-class research universities and customized training programs.
“Delaware’s favorable position in national tax burden rankings underscores our commitment to making sure that our tax structure is attractive to businesses and individuals and supports our growing economy.”
— Governor John Carney
With a thriving science economy, having one of the world’s largest labor pools of science and technology experts supports the expansion of and economic growth in those sectors throughout the state. When looking at the future of the state it expects exponential growth in biotech and manufacturing. Delaware has a reputation for being a global leader in chemical innovation and offers R&D tax credits at both state and federal levels.
Alongside the science sector is the manufacturing sector which is also seeing significant growth. The manufacturing industry in Delaware is finding its footing by using innovative ways to deliver goods across the nation.
Due to the state’s strategic location and robust infrastructure, logistics is a top selling point to manufacturing companies. Delaware is committed to the continued growth and expansion of next-generation manufacturers. Manufacturing is the state’s third-largest traded sector, with manufactured goods valued at almost $5 billion. With manufacturing a growing sector in Delaware, it also has potential to have a positive effect on other industries statewide, such as chemistry and biosciences. These sectors can work with current manufacturing companies in the state to create a tight-knit supply chain.
All industries are taking advantage of the state’s favorable tax climate. The mid-Atlantic state has no sales tax, no personal property tax, no inventory tax, and no value-added tax (VAT). Delaware has a corporate income tax rate of 8.7% and transitioned to single sales factor apportionment, which rewards companies for investing there and reduces the tax liabilities of businesses that have significant property and payroll in the state.
“Delaware’s favorable position in national tax burden rankings underscores our commitment to making sure that our tax structure is attractive to businesses and individuals and supports our growing economy,” said Governor John Carney. “That, along with Delaware’s low cost of living, plus top-notch healthcare, education, and recreation, add up to one great place to live.”
Delaware’s Appeal As Location, Expansion Site Growing In Science And Manufacturing Sectors
With innovation-friendly policies, accessible leaders, and a lack of sales and inventory taxes, Delaware is recognized as a great state for location and expansion across all sectors. Delaware also has the nation’s fourth highest concentration of employed PhDs in health, science, and engineering and a #7 ranking on the Milken Institute 2022 State Technology and Science Index along with the fifth best workforce in the United States (CNBC) and workforce development programs that start as early as middle school. Delaware also offers the nation’s sixth most competitive business environment (U.S. News & World Report) and ranks #1 for tax favorability in manufacturing (The Tax Foundation). It’s no surprise, then, that science and manufacturing companies are choosing Delaware more and more.
With innovation-friendly policies, accessible leaders, and a lack of sales and inventory taxes, Delaware is recognized as a great state for location and expansion across all sectors.
One factor indicating Delaware’s drive to meet these sectors’ needs is the Graduated Lab Space Grant Program, which helps companies with expenses associated with building out wet lab space. The program was created in 2021, and the grant value has since been increased by 40% to a maximum of $70 per square foot to help lab-based companies grow in Delaware despite a nationwide shortage of wet lab space.
Another state-funded program takes a proactive approach to developing a ready supply of sites for companies—particularly manufacturing firms—considering coming to or growing in Delaware. The Site Readiness Fund provides matching grants of up to $1 million for landowners to develop or improve industrial sites to receive location and expansion projects.
So far, the Site Readiness Fund has supported 15 projects with a collective $13.2 million in funding, including:
- Development of First State Logistics Park in Newark
- Construction of 2.5 million square feet of warehouse space at St. Georges Logistics Center in Middletown
- Redevelopment of a 131-acre industrial park in Harrington
- An industrial and business park with two dozen lots in Milford
Also supported by the Site Readiness Fund is the $1 billion, 163-acre Chestnut Run Innovation & Science Park in Wilmington. Tenants at the research, advanced manufacturing, and business incubation campus include DuPont, which owned the original Chestnut Run complex and now leases about a quarter of the redeveloped site’s 700,000 square feet of space; Solenis, a Wilmington-based water technologies firm building a $40 million R&D center there; and Prelude Therapeutics, a privately held, clinical-stage biopharmaceutical company with a long-term lease for headquarters, research, and laboratory facilities.
Lab Space and Site Readiness grants have joined Delaware’s established incentives such as Jobs Performance Grants and Capital Expenditure Grants, which many science/technology and manufacturing companies have received. Among the recipients of the latter is pharmaceutical contract research, development, and manufacturing business WuXi STA, which announced in 2021 that a 190-acre Middletown Business Center site would become its second U.S. location and bring a $510 million investment and 479 new jobs to Delaware.
Another recent project supported by state grant funding is the relocation of case and rack manufacturer CP Cases. CP Cases received a Jobs Performance Grant and a Capital Expenditure Grant in late 2022 to support its move to Frankford Business Park, where a gas line that had been funded by a Site Readiness grant was both necessary for the company’s preferred manufacturing processes and a key factor in its decision to choose Delaware.
Visit choosedelaware.com for more information.