Head Tax Exemption Program


The City of Wilmington’s Head Tax Exemption Program is codified in Section 5-102A of the City’s Code. The City’s Code calls for every person or business required to obtain a business license to also pay the sum of fifteen dollars ($15.00) per month for every employee in excess of five (5), employed by the licensee carrying out the business of the licensee and located within the City of Wilmington (i.e. the Head Tax). In the case of part-time employees, the employer shall accrue the man hours worked during the month by all part-time employees and divide by one hundred and seventy three (173) to arrive at the number of such employees per month.


This program was authorized to have an effective date of January 1, 2010 and is set to expire on June 30, 2023. As long as eligible applicants are entered into the Head Tax Exemption Program by this date, they will be entitled to the abatement provided by the Program for a period of five (5) years notwithstanding the expiration of the Program.

To be eligible for a Head Tax exemption as provided in the Program, an Employer must be able to show:

  1. That the sum of verifiable new employees per month, whether newly hired, transferred from outside of the City’s limits, or any combination thereof, equals or exceeds an increase of 50 full-time equivalent employees when measured against the full-time equivalent employee complement of the employer deployed to a location situated within the City of Wilmington on the effective date of the Head Tax Exemption Program, which is January 1, 2010. If an employer that had not previously been located within the City of Wilmington on the effective date of the Head Tax Exemption Program then commences operations within the City of Wilmington subsequent to the effective date, then the full-time equivalent complement of the employer shall be deemed to be zero (0) on the effective date of the Head Tax Exemption Program for purposes of calculating the increase of full-time equivalent employees.
  2. The aggregate annual earned income of the verifiable new employees, whether newly hired, transferred from outside of the City’s limits, or any combination thereof, that is subject to taxation under the City of Wilmington earned income tax equals or exceeds Three Million Dollars ($3,000,000.00) in any Head Tax Exemption Program calendar year or a portion thereof.

To apply, an applicant must submit a notarized affidavit and the information contained therein shall be certified as true and correct by an officer, director, partner, or member of the applicant and submitted under penalty of perjury. The affiant must be a person who has knowledge with respect to the information provided in the application and must be authorized by the employer to execute and submit the application. The notarized affidavit must declare:

  1. The aggregate city-wide full-time equivalent employee complement of the employer on the effective date of the Head Tax Exemption Program;
  2. The aggregate number of verifiable new employees hired by, or transferred by the employer from a business location outside the City of Wilmington to a business location inside the City of Wilmington, on or after the effective date of the City of Wilmington Head Tax Exemption Program, and as of the date of the application;
    1. whether the employer reasonably expects to exceed the aggregate earned income threshold of Three Million Dollars ($3,000,000.00) for verifiable new employees deployed in the City of Wilmington in the year that the application is submitted by the employer;
    2. such other information as the City’s Department of Finance may require.

Category: Local

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