As used in this chapter:

1. (1) “Commercial multi-market distribution” means broadcast of the resulting content from qualified activities inside and outside of this State through theaters, cable networks, over the air broadcast, streaming, digital means, and hardware for distribution of digital interactive media, and such other means of content distribution hereafter developed.
2. (2) “Esports” means organized, competitive video gaming, where players or teams face off in structured matches, leagues, or tournaments; it blends traditional sports elements like coaching, strategy, training, and spectators with digital gameplay.
3. (3) “Loan-out company” means a personal service company contracted with, and retained by a production company to provide individual personnel who are not employees of the production company, including actors, directors, producers, writers, production designers, production managers, costume designers, directors of photography, editors, casting directors, first assistant directors, second unit directors, stunt coordinators, and similar personnel, for performance of services used directly in a qualified activity. The term does not include persons retained by a production company to provide tangible property or outside independent contractor services, such as catering, construction, trailers, equipment, and transportation.

4. (4) a. “Qualified activities” include:

   1. 1. The creation of media projects including feature films, series, productions, commercial advertisements, webisodes, music videos, pilots, award shows, game shows, and esports events, which are created for commercial multi-market distribution.
   2. 2. Creation of digital interactive entertainment, including videogames, and including subsequent updates and subsequent editions of digital interactive entertainment.

   3. b. “Qualified activities” do not include:

      1. 1. Political advertising.
      2. 2. Industrial or instructional videos.
      3. 3. Content which meets the definition of “obscene” under § 1364 of Title 11.
      4. 4. Live or prerecorded athletic events, which do not include esports.
      5. 5. Website development.
      6. 6. Infomercials, infotainment, or solicitation-based products.
5. (5) “Qualified company” means a company primarily engaged in or created to engage in qualified activities, which is either incorporated under the laws of Delaware or registered to do business in Delaware. “Qualified company” does not include any business owned, affiliated, or controlled, in whole or in part, by any company or person which is in default on any tax obligation of this State, or a loan made by this State, or a loan guaranteed by this State.

6. (6) “Qualified expenditure” means as follows:

   1. a. For media projects, “qualified expenditure” means preproduction, production, and postproduction expenditures incurred in this State that are directly used in a qualified production activity, including the following: set construction and operation; wardrobes, make-up, accessories, and related services; costs associated with photography and sound synchronization, lighting, and related services and materials; editing and related services; rental of facilities and equipment; leasing of vehicles; costs of food and lodging; digital or tape editing, film processing, transfers of film to tape or digital format, sound mixing, computer graphics services, special effects services, and animation services; total aggregate payroll; airfare, if purchased through a Delaware based travel agency or travel company; insurance costs and bonding, if purchased through a Delaware based insurance agency; and other direct costs of producing the project in accordance with generally accepted entertainment industry practices. “Qualified expenditures” includes expenses for all professionals whose work is directly related to the qualified activities including accountants and lawyers.
   2. b. For digital interactive entertainment, “qualified expenditure” means all expenditures in this State directly relating to qualified activities including the following: testing software, source code development, patches, updates, sprites, 3-dimensional models, engine development and other back-end programming activities, performance and motion capture, audio production, tool development, original scoring, and level design; costs associated with photography and sound synchronization, lighting and related services; live operations, information technology support, data analysis and activities related to a community of users; rental of facilities and equipment; purchase of prepackaged audio files, video files, photographic files, or libraries; purchase of licenses to use pre-recorded audio files, video, or photographic files; development costs associated with producing audio files and video files to be used in the production of the end product under development. “Qualified expenditure” includes costs for all professionals whose work is directly related to the qualified activities including accountants and lawyers.
   3. c. “Qualified expenditures” does not include expenditures for work or services conducted or rendered outside of this State.
   4. d. “Qualified expenditures” does not include expenditures for marketing or purchase of story rights.
7. (7) “Qualified production” means a production engaged in qualified activities which have been approved by the Division of Small Business in accordance with § 2005F of this title.

85 Del. Laws, c. 334, § 1