DE enacts phase-in to single sales factor and other changes

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January 2016


​On January 27, 2016, Delaware enacted H.B. 235, “The Delaware Competes Act of 2016,” which provides a four year phase-in to single sales factor apportionment, beginning in 2017.

The Act grants an option for telecommunications corporations, and companies with their world headquarters and significant capital investment in Delaware to make an annual election to use either single sales factor or three-factor apportionment starting in 2017.

Effective for tax periods beginning after December 31, 2015, non-US corporations include only US property and payroll when calculating the denominator for each factor.  The Act does not have a similar requirement for the sales factor.

This phase-in does not apply to asset management corporations, which remain subject to a single sales factor apportionment.

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Peter Michalowski

Peter Michalowski

State and Local Tax Leader, PwC US

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