DelawareHB 364153rd General Assembly (2024–2026)HouseWALLET

AN ACT TO AMEND TITLE 30 OF THE DELAWARE CODE RELATING TO A DELAWARE ENTERTAINMENT PRODUCTION TAX CREDIT.

Sponsored By: Kerri Evelyn Harris (Democratic)

Signed by Governor

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 0 benefits, 1 costs, 2 mixed.

Production service companies face 6% withholding

Beginning July 1, 2026, production companies must withhold 6% of payments to loan-out companies for services performed in Delaware. Loan-out companies are personal service businesses that supply production workers. The withheld money goes to the state as security for Delaware tax liabilities and initially credits the company's income tax account. This reduces cash received upfront, but does not necessarily increase the final tax bill. Nonresident employees performing this work are taxable nonresidents, and loan-out companies have income tax and payroll withholding duties that year.

Production applicants face audits and disclosure

Beginning July 1, 2026, credit applicants submit budgets, financing proof, cast and location lists, and a Delaware Impact Plan. The plan describes benefits such as resident jobs and local vendor use. After production, applicants must pay an independent certified public accountant to check and certify each credit's qualifying costs. They submit the audit with their completion application and attach the Certificate of Completion to their tax return. The Division of Small Business can allow another audit process when a full audit is too expensive for a small business. Applicants and credit-transfer recipients must agree to public disclosure of the amounts awarded or transferred. Designated state agencies can share credit information for administration and oversight. The Division must develop audit and transfer procedures by January 1, 2027. Program reports are due December 1, 2028, and December 1, 2030, covering awards, jobs, spending, state costs and revenue effects, industry growth, and comparisons with other states.

Production companies get capped tax credits

Beginning July 1, 2026, eligible entertainment companies get a tax credit worth 30% of approved Delaware production costs. Companies must be incorporated or registered in Delaware and primarily engaged in, or created for, qualifying production work. They must spend more than $500,000 during 12 consecutive months; costs from multiple projects can count together. Companies and their owners, affiliates, and controlling businesses cannot be in default on Delaware taxes or state-backed loans. Companies must also offer internships to Delaware residents. Eligible work includes commercial film, television, esports, and video game production, including game updates. Out-of-state work, marketing, and story-rights purchases do not count; excluded activities include political ads, instructional videos, obscene content, non-esports sports events, website development, infomercials, and solicitation-based products. Credits offset Delaware personal income, corporate income, insurance premium, or bank franchise taxes, but do not provide refunds. Unused credits can carry forward for up to five years, earliest year first, but cannot carry back. Credits can be sold, assigned, or transferred with advance registration and approval from the Division of Small Business. Pass-through businesses can divide credits among owners by their shares or an agreement. Total awards are capped at $10 million each fiscal year. The Secretary of State chooses the allocation method and gives priority to local hiring, Delaware vendors and facilities, repeat projects, and permanent expansion. Applications close after June 30, 2031; projects with initial approval before then can receive final approval later and use eligible credits within the five-year carryforward period.

Sponsors & Cosponsors

Sponsor

Kerri Evelyn Harris
Democratic • House

Cosponsors

Eric Buckson
Republican • Senate
William J. Carson
Democratic • House
Daniel Cruce
Democratic • Senate
Daniel B. Short
Republican • House
Mara Gorman
Democratic • House
Krista Griffith
Democratic • House
Kevin S Hensley
Republican • House
Gerald W. Hocker
Republican • Senate
Kyra L. Hoffner
Democratic • Senate
Russell Huxtable
Democratic • Senate
Kendra Johnson
Democratic • House
Larry Lambert
Democratic • House
S. Elizabeth Lockman
Democratic • Senate
Michael F. Smith
Republican • House
Brian Pettyjohn
Republican • Senate
Bryant L. Richardson
Republican • Senate
Claire Snyder-Hall
Democratic • House
David L. Wilson
Republican • Senate
Lyndon D. Yearick
Republican • House

Roll Call Votes

All Roll Calls

Yes: 59 • No: 0

Senate vote • 7/1/2026

Passed (2/3 required)

Yes: 20 • No: 0

House vote • 6/11/2026

Passed (3/5 required)

Yes: 39 • No: 0

Actions Timeline

Signed by Governor
7/1/2026Governor
Passed By Senate. Votes: 20 YES 1 ABSENT
7/1/2026Senate
Reported Out of Committee (Finance) in Senate with 4 On Its Merits
6/24/2026Senate
Assigned to Finance Committee in Senate
6/17/2026Senate
Reported Out of Committee (Executive) in Senate with 6 On Its Merits
6/17/2026Senate
Reported Out of Committee (Executive) in Senate with 6 On Its Merits
6/17/2026Senate
Assigned to Executive Committee in Senate
6/11/2026Senate
Passed By House. Votes: 39 YES 2 ABSENT
6/11/2026House
Amendment HA 2 to HB 364 - Passed In House by Voice Vote
6/11/2026House
Amendment HA 1 to HB 364 - Stricken in House
6/11/2026House
Amendment HA 2 to HB 364 - Introduced and Placed With Bill
6/11/2026House
Reported Out of Committee (Appropriations) in House with 4 On Its Merits
6/9/2026House
Amendment HA 1 to HB 364 - Introduced and Placed With Bill
5/19/2026House
Assigned to Appropriations Committee in House
5/7/2026House
Reported Out of Committee (Revenue & Finance) in House with 7 On Its Merits
5/6/2026House
Introduced and Assigned to Revenue & Finance Committee in House
4/9/2026House

Bill Text

Current
4/9/2026
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