Delaware last year cut corporate income taxes to help convince DuPont and its successor companies to keep some jobs in the state.
The state's corporate income tax collections also plunged last year. Coincidence, the state treasurer's office says: Delaware corporate income tax receipts vary a lot, year to year (more on that below). And, after all, the DuPont tax breaks won't kick in until the current fiscal year.
1) To keep DuPont spin-off Chemours from following earlier splits like Axalta and Endo out of the state, legislators passed the Delaware Competes Act. That copies Pennsylvania and other states in combining old tax apportionment factors into a single standard. States used to calculate taxes by considering a company's local property, investment and employment separately. That meant big employers paid extra, they complained.
2) To keep Dow and DuPont from moving three planned successor companies out of the state (after ongoing job cuts are completed), Delaware passed the Committment to Innovation Act, expanding research credits and added "job retention" credits. (For more on these tax cuts, see Page V in the report linked above)
3) The report also notes a 47% drop -- that's minus $126.2 million -- in Delaware corporate income tax collections for fiscal 2016. (See Page 14) But "none of the decline is attributable to the recent legislation," state Finance Department spokeswoman Leslie A. Pound told me.
"The large swings in fiscal year 2017 revenue was due to other factors and is not unusual for the corporate income tax," which swings a lot, year to year -- due to "extraordinary audit collections" and refunds following IRS and Delaware audits of taxpaying companies' books.
UPDATE: "Swings are commonplace," Poland told me. See Delaware corporate income tax collections in recent fiscal years:
2010, $88 million
2011, $168 million -- up +91%
2012, $119 million -- down -29%
2013, $188 million -- up +58%
2014, $102 million -- down 46%
2015, $270 million -- up +164%
2016, $143 million -- down -47%
(Note: data in this table has been corrected; base numbers are rounded to the nearest $1 million)
The state figures it got an extra $90 million in 2015, its top year, from one-time corporate tax settlements.
EARLIER: Here's what the state estimates will happen once the DuPont tax cuts do kick in:
- Innovation Act tax cuts: State revenues won't change this year, but will decline -$3.5 million in 2017-18, -$10.6 million in 2018-19