(1) "Administration services" means, in each case with respect to intangible investments (as such term is defined in § 1902(b)(8)
of this title):
a. Clerical;
b. Accounting;
c. Bookkeeping;
d. Data processing;
e. Internal auditing;
f. Tax services;
g. Regulatory compliance, operations and related services;
h. Risk analytics; and
i. Trade processing, clearing and execution services.
(2) "Asset management corporation" means a corporation:
a. Ninety percent or more of the gross receipts of which are derived from the performance of asset management services;
b. That is not exempt from taxation under this chapter pursuant to § 1902(b)(8) of this title; and
c. That makes an election for each taxable year to be treated as an asset management corporation by filing the appropriate
form of return prescribed by the Director to make such election.
For purposes of this paragraph, "gross receipts" shall mean gross receipts reported by the corporation for its taxable year
for purposes of the federal income tax.
(3) "Asset management services" means, in each case with respect to intangible investments (as such term is defined in § 1902(b)(8)
of this title):
a. Rendering investment advice, including investment analysis;
b. Making determinations as to when sales and purchases are to be made;
c. Selling or purchasing of intangible investments;
d. Rendering administration services;
e. Rendering distribution services; or
f. Managing contracts for sub-advisory services.
(4) "Board" means the Tax Appeal Board.
(5) "Commercial domicile" means the principal place from which the trade or business of the taxpayer is directed or managed.
(6) "Corporation" includes a joint stock company or any association which is taxable as a corporation under the federal income
tax law.
(7) "Distribution services" means, in each case with respect to intangible investments (as such term is defined in § 1902(b)(8)
of this title):
a. Advertising;
b. Servicing investor accounts (including redemptions);
c. Marketing shares or selling shares of corporations or business trusts registered as investment companies under the Investment
Company Act of 1940 (15 U.S.C. § 80a-1 et seq.); and
d. Marketing asset management services (including selling interests in a pool of intangible investments, such as a fund).
(8) "Domestic corporation" means any corporation organized under the laws of this State.
(9) "Domicile" means:
a. In the case of an individual, the State of the individual's domicile under the law of Delaware;
b. In the case of an estate, this State, if the estate is a resident estate under § 1601 of this title, and outside of this
State, if the estate is a nonresident estate under § 1601 of this title;
c. In the case of a trust (as defined in § 1601(9) of this title), this State, if the trust is a resident trust under § 1601
of this title, and outside of this State, if the trust is a nonresident trust under § 1601 of this title;
d. In the case of a corporation or a pass-through entity (as defined under § 1601(6)a. of this title), its commercial domicile;
provided, however, domicile shall be presumed to be the mailing address of the beneficiary of a pension plan, or the owner
of an account or interest in a pool of intangible investments based on the records of the sponsor of such pension plan, account
or pool of intangible investments or the shareholder's mailing address on the records of an investment company under the Investment
Company Act of 1940 (15 U.S.C. § 80a-1 et seq.).
(10) "Federal income tax" means the tax imposed on corporations by the federal Internal Revenue Code of 1986 and amendments
thereto.
(11) "Foreign corporation" means any corporation other than a domestic corporation.
(12) "Income year" means the taxable year for which the taxpayer computes its net income for purposes of the federal income
tax.
(13) "Risk analytics" means performing risk analysis of intangible investments (as such term is defined in § 1902(b)(8) of
this title), providing reports of such analyses and providing interactive, software-based risk analytical tools to users of
such tools.
(14) "Secretary" and "Secretary of Finance" mean the Secretary of Finance or the Secretary's duly authorized designee; provided,
that any such delegation of authority is consistent with the provisions of Chapter 83 of Title 29.
(15) "Sponsor" means the person that has contracted directly with the beneficiaries of a pension plan or retirement account
or the owner of any account or interest in a pool of intangible investments to administer and manage the pension plan or retirement
account, other account or pool of intangible investments.
(16) "State" means any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory
or possession of the United States and any foreign country or political subdivision thereof.
(17) "Taxpayer" means any corporation subject to the tax imposed by this chapter.
(18) "Treasury Department" means the Treasury Department of the United States.
30 Del. C. 1953, § 1901; 51 Del. Laws, c. 298; 51 Del. Laws, c. 315, 1; 57 Del. Laws, c. 741, § 8A; 67 Del. Laws, c. 408, § 3; 70 Del. Laws, c. 186, § 1; 76 Del. Laws, c. 234, § 4.;
§ 1902. Imposition of tax on corporations; exemptions.
(a) Every domestic or foreign corporation that is not exempt under subsection (b) of this section shall annually pay a tax
of 8.7 percent on its taxable income, computed in accordance with § 1903 of this title, which shall be deemed to be its net
income derived from business activities carried on and property located within the State during the income year. Any receiver,
referee, trustee, assignee or other fiduciary or any officer or agent appointed by any court who conducts the business of
any corporation shall be subject to the tax imposed by this chapter in the same manner and to the same extent as if the business
were conducted by the corporation.
(b) The following corporations shall be exempt from taxation under this chapter:
(1) Fraternal beneficiary societies, orders or associations:
a. Operating under the lodge system or for the exclusive benefit of the members of a fraternity itself operating under the
lodge system; and
b. Providing for the payment of life, sick, accident or other benefits to the members of such society, order or association
or their dependents;
(2) Cemetery corporations and corporations organized or trusts created for religious, charitable, scientific or educational
purposes or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit
of any private stockholder or individual;
(3) Business leagues, chambers of commerce, fire companies, merchants' associations or boards of trade not organized for profit,
and no part of the net earnings of which inures to the benefit of any private stockholder or individual;
(4) Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare;
(5) Clubs organized and operated exclusively for pleasure, recreation and other nonprofitable purposes, no part of the net
earnings of which inures to the benefit of any private stockholder or member;
(6) A corporation maintaining a statutory corporate office in the State but not doing business within the State;
(7) Insurance companies paying taxes upon gross premiums to the Insurance Commissioner;
(8) Corporations whose activities within this State are confined to the maintenance and management of their intangible investments
or of the intangible investments of corporations or statutory trusts or business trusts registered as investment companies
under the Investment Company Act of 1940, as amended (15 U.S.C. 80a-1 et seq.) and the collection and distribution of the
income from such investments or from tangible property physically located outside this State. For purposes of this paragraph,
"intangible investments" shall include, without limitation, investments in stocks, bonds, notes and other debt obligations
(including debt obligations of affiliated corporations), patents, patent applications, trademarks, trade names and similar
types of intangible assets;
(9) A corporation that is an S corporation for federal income tax purposes for any taxable year beginning on or after January
1, 1961;
(10) A corporation which qualifies as a domestic international sales corporation (DISC) under the provisions of subchapter
N of Chapter 1 of the federal Internal Revenue Code [26 U.S.C. § 861 et seq.] and which has in effect for the entire taxable
year a valid election under federal law to be treated as a DISC. If a corporation makes such an election under federal law,
each person who at any time is a shareholder of such corporation shall be subject to taxation under Chapter 11 or Chapter
19 of this title on the earnings and profits or taxable income of this DISC in the same manner as provided by federal law
for all periods for which the election is effective;
(11) An entity that is a real estate mortgage investment conduit as defined in § 860D of the Internal Revenue Code of 1986
[26 U.S.C. § 860D], as amended;
(12) An entity that is registered as an investment company under the Investment Company Act of 1940, as amended (15 U.S.C.
§ 80a-1 et seq.); and
(13) An entity that is a real estate investment trust as defined in § 856 of the Internal Revenue Code of 1986 (26 U.S.C.
§ 856) as amended;
(14) An entity that is a homeowners association as defined in § 528 of the Internal Revenue Code (26 U.S.C. § 528) or successor
provision.
30 Del. C. 1953, § 1902; 51 Del. Laws, c. 298; 51 Del. Laws, c. 315, §§ 2, 3; 57 Del. Laws, c. 136, § 1; 57 Del. Laws, c. 737, § 2; 58 Del. Laws, c. 293, § 1; 58 Del. Laws, c. 396, § 1; 59 Del. Laws, c. 150, § 1; 61 Del. Laws, c. 76, § 1; 64 Del. Laws, c. 461, § 10; 65 Del. Laws, c. 155, § 2; 65 Del. Laws, c. 160, § 4; 66 Del. Laws, c. 267, § 2; 67 Del. Laws, c. 295, § 1; 67 Del. Laws, c. 408, §§ 4, 5; 68 Del. Laws, c. 423, § 1; 69 Del. Laws, c. 188, §§ 6, 7; 71 Del. Laws, c. 314, § 4; 73 Del. Laws, c. 329, § 72; 75 Del. Laws, c. 412, § 1.;
§ 1903. Computation of taxable income.
(a) The "entire net income" of a corporation for any income year means the amount of its federal taxable income for such year
as computed for purposes of the federal income tax increased by:
(1) Any interest income (including discount) on obligations issued by states of the United States or political subdivisions
thereof other than this State and its subdivisions, and
(2) The amount of any deduction allowed for purposes of the federal income tax pursuant to § 164 of the Internal Revenue Code
(26 U.S.C. § 164) for taxes paid on, or according to or measured by, in whole or in part, such corporation's net income or
profits, to any state (including this State), territory, county or political subdivision thereof, or any tax paid in lieu
of such income tax, and its federal taxable income shall be further adjusted by eliminating:
a. Dividends received on shares of stock or voting trust certificates of foreign corporations or interest income or royalty
income, on which a foreign tax is paid, deemed paid or accrued under the applicable provisions of the United States Internal
Revenue Code [26 U.S.C. § 1 et seq.];
b. Interest income (including discount) from securities issued by the United States or agencies or instrumentalities thereof
and interest income (including discount) arising from obligations representing advances, loans or contractual transactions
between corporations which are eligible to file a consolidated return for federal income tax purposes and which are subject
to taxation under this chapter, if the paying corporation eliminates such interest (including discount) in determining its
entire net income; provided, however, that the expenses allocable to interest income from securities issued by the United
States or agencies or instrumentalities thereof shall not be allowed as a deduction;
c. Gains and losses from the sale or other disposition of securities issued by the United States or agencies or instrumentalities
thereof or by this State or political subdivisions thereof. Expenses incurred in connection with such gains and losses shall
not be considered in computing the entire net income of the corporation;
d. Any deduction allowed for depletion of oil and gas wells under § 611 of the federal Internal Revenue Code [26 U.S.C. §
611] to the extent such deduction is determined by reference to § 613 of the federal Internal Revenue Code [26 U.S.C. § 613]
(relating to percentage depletion);
e. An amount equal to the portion of the wages paid or incurred for the taxable year which is disallowed as a deduction for
federal purposes under § 280C, Internal Revenue Code [26 U.S.C. § 280C], relating to the portion of wages for which the new
jobs tax credit is claimed;
f. The cost, not to exceed $5,000, of a renovation project to remove physical design features in a building that restrict
the full use of the building by physically handicapped persons. The modification shall be allowed for the taxable year in
which the renovation project is completed and is in addition to any depreciation or amortization of the cost of the renovation
project. "Building" means a building or structure or that part of a building or structure and its related sidewalks, curbing,
driveways and entrances that are located in Delaware and open to the general public;
g. The "eligible net income" of an Edge Act corporation organized pursuant to § 25(a) of the Federal Reserve Act, 12 U.S.C.
§ 611 et seq. The eligible net income of an Edge Act corporation shall be the net income from any international banking facility
of such corporation each computed as described in § 1101(a)(1)d. and e. of Title 5;
h. Any deduction, to the extent such deduction exceeds $30,000, for a net operating loss carryback as provided for in Internal
Revenue Code § 172 [26 U.S.C. § 172] or successor provisions; provided, however, that the taxpayer may increase deductions
in any year, consistent with the operation of § 172, to carry forward losses which were carried back in calculating federal
taxable income but which were prevented from being carried back under this paragraph.
(b) "Taxable income" subject to taxation under this chapter means the portion of the entire net income of a corporation which
is allocated and apportioned to this State in accordance with the following provisions:
(1) Rents and royalties (less applicable or related expenses) from tangible property shall be allocated to the state in which
the property is physically located;
(2) Patent and copyright royalties (less applicable or related expenses) shall be allocated proportionately to the states
in which the product or process protected by the patent is manufactured or used or in which the publication protected by the
copyright is produced or printed;
(3) Gains and losses from the sale or other disposition of real property shall be allocated to the state in which the property,
and expenses incurred in connection with dispositions resulting in such gains and losses, is physically located;
(4) Gains and losses from the sale or other disposition of tangible property for which an allowance for depreciation is permitted
for federal income tax purposes, and expenses incurred in connection with dispositions resulting in such gains and losses,
shall be allocated to the state where the property is physically located or is normally used in the taxpayer's business;
(5) Interest (including discount) to the extent included in determining entire net income under subsection (a) of this section,
less related or applicable expenses, shall be allocated to the state where the transaction took place which resulted in the
creation of the obligation with respect to which the interest was earned;
(6) If the entire business of the corporation is transacted or conducted within this State, the remainder of its entire net
income shall be allocated to this State. If the business of the corporation is transacted or conducted in part without this
State, such remainder, whether income or loss, shall be apportioned to this State on the basis of the ratio obtained by taking
the arithmetical average of these 3 ratios:
a. The average of the value, at the beginning and end of the income year, of all the real and tangible personal property,
owned or rented, in this State by the taxpayer, expressed as a percentage of the average of the value at the beginning and
end of the income year of all such property of the taxpayer both within and without this State; provided, that any property,
the income from which is separately allocated under paragraph (b)(1) of this section or which is not used in the taxpayer's
business, shall be disregarded. For the purposes of this paragraph, property owned by the taxpayer shall be valued at its
original cost to the taxpayer, and property rented by the taxpayer shall be valued at 8 times the annual rental;
b. Wages, salaries and other compensation paid by the taxpayer to employees within this State, except general executive officers,
during the income year expressed as a percentage of all such wages, salaries and other compensation paid within and without
this State during the income year to all employees of the taxpayer, except general executive officers;
c. Gross receipts from sales of tangible personal property physically delivered within this State to the purchaser or the
purchaser's agent (but not including delivery to the United States mail or to a common or contract carrier for shipment to
a place outside this State) and gross income from other sources within this State for the income year expressed as a percentage
of all such gross receipts from sales of tangible personal property and gross income from other sources both within and without
the State for the income year; provided, that any receipts or items of income that are excluded in determining the taxpayer's
entire net income or are directly allocated under paragraphs (b)(1) to (5) of this section shall be disregarded.
This paragraph (b)(6) shall not apply in the case of an asset management corporation.
(7) The remainder of the entire net income of an asset management corporation shall be apportioned to this State on the basis
of the ratio of gross receipts from asset management services from sources within this State for the income year expressed
as a percentage of all such gross receipts from asset management services both within and without the State for the income
year; provided, that any receipts or items of income that are excluded in determining the taxpayer's entire net income or
are directly allocated under paragraphs (b)(1) to (5) of this section shall be disregarded. The source of gross receipts from
asset management services shall be determined as follows:
a. In the case of asset management services provided directly or indirectly to an individual, gross receipts with respect
to such services shall be sourced to the State of the individual's domicile.
b. In the case of asset management services provided directly or indirectly to an institutional investor holding investments
for the benefit of others, such as a pension plan, retirement account or pool of intangible investments, including a fund
(other than an investment company under the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.)), or to an institutional
investor organized as a pass-through entity (as defined in § 1601(6)a. of this title), gross receipts with respect to such
services shall be sourced according to the following rules in the following order:
1. If information regarding domicile of beneficiaries, owners or members is available to the asset management corporation
providing asset management services to a pension plan, retirement account or pool of intangible investments, including a fund
(other than an investment company under the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.)), or to an institutional
investor organized as a pass-through entity (as defined in § 1601(6)a. of this title) through the exercise of reasonable diligence
in ascertaining such information, gross receipts with respect to such services shall be sourced to the domicile of such beneficiaries,
owners or members;
2. If information regarding domicile of beneficiaries, owners or members is not available to the asset management corporation
providing asset management services to a pension plan, retirement account or pool of intangible investments, including a fund
(other than an investment company under the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.)), or to an institutional
investor organized as a pass-through entity (as defined in § 1601(6)a. of this title) through the exercise of reasonable diligence
in ascertaining such information, a reasonable alternative method based on information readily available to the asset management
corporation may be used to determine the source of gross receipts with respect to such services, and such reasonable alternative
method shall be disclosed and explained in the return in which the method is used. The burden of demonstrating the reasonableness
of the method rests on the taxpayer. Based on facts and circumstances in specific cases, reasonable alternative methods used
to determine the source of gross receipts from asset management services may take into account the latest population census
data available from the United States Census Bureau, the domicile of the sponsor of a pension plan or retirement account or
an account or pool of intangible investments (other than an investment company under the Investment Company Act of 1940 (15
U.S.C. § 80a-1 et seq.)) or the domicile of an institutional investor organized as a pass-through entity (as defined in §
1601(6)a. of this title); or,
3. If
A. The domicile of beneficiaries, owners or members is not ascertained under paragraph (b)(7)b.1. of this section; or,
B. No reasonable alternative sourcing method exists under paragraph (b)(7)b.2. of this section, gross receipts with respect
to such services shall be sourced to the domicile of the institutional investor or the domicile of the sponsor of a pension
plan or retirement account or an account or pool of intangible investments, including a fund (other than an investment company
under the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.)), to which asset management services are provided.
c. In the case of asset management services provided directly or indirectly to an investment company under the Investment
Company Act of 1940 (15 U.S.C. § 80a-1 et seq.), gross receipts with respect to such services shall be sourced to the domicile
of the shareholders of such investment company in accordance with the following procedure: the portion of the gross receipts
with respect to such services that are sourced to this State shall be determined by multiplying the total of such gross receipts
by a fraction, the numerator of which is the average of the sum of the beginning of year and the end of year balance of shares
owned by the investment company shareholders domiciled in this State for the investment company's taxable year for federal
income tax purposes and the denominator of which is the average of the sum of the beginning of year and the end of year balance
of shares owned by all investment company shareholders. A separate computation shall be made with respect to gross receipts
for asset management services provided directly or indirectly to each investment company.
d. In the case of asset management services provided directly or indirectly to a person other than those persons described
in paragraph (b)(7)a. through c. of this section, to the domicile of such person.
(c) If, in the discretion of the Secretary of Finance, the application of the allocation or apportionment provisions of this
section result in an unfair or inequitable proportion of the taxpayer's entire net income being assigned to this State, then
the Secretary of Finance or the Secretary's delegate may permit or require the exclusion or alteration of the weight to be
given to 1 or more of the factors in the formula specified above or the use of separate accounting or other method to produce
a fair and equitable result.
(d) In determining the taxable income of a fiscal year taxpayer for that portion of its fiscal year ending within 1977 which
falls within the calendar year 1977, the taxpayer may, at its election, treat such period as though it were the entire fiscal
year, or it may compute its taxable income for the entire fiscal year and pay the tax herein imposed on that portion of the
taxable income so determined which the number of days from January 1, 1977, to the close of the fiscal year in 1977 bears
to 365.
30 Del. C. 1953, § 1903; 51 Del. Laws, c. 298; 51 Del. Laws, c. 315, § 4; 57 Del. Laws, c. 136, §§ 2, 3; 57 Del. Laws, c. 188, §§ 19, 41; 57 Del. Laws, c. 533; 57 Del. Laws, c. 741, § 8B; 58 Del. Laws, c. 320; 59 Del. Laws, c. 113, §§ 1, 2; 60 Del. Laws, c. 18, § 3; 61 Del. Laws, c. 76, § 2; 61 Del. Laws, c. 297, § 1; 62 Del. Laws, c. 56, § 3; 63 Del. Laws, c. 295, § 2; 64 Del. Laws, c. 43, § 8; 67 Del. Laws, c. 263, §§ 1, 2; 68 Del. Laws, c. 82, §§ 9, 10; 70 Del. Laws, c. 186, § 1; 71 Del. Laws, c. 19, § 80; 71 Del. Laws, c. 217, §§ 3-6; 76 Del. Laws, c. 234, §§ 5, 6.;
§ 1904. Returns.
(a) A tentative return, covering estimated income tax liability for the current income year, to be in such form and containing
such information as the Secretary of Finance shall prescribe, shall be filed with the Secretary of Finance as follows: In
the case of a calendar year taxpayer, on or before April 1 of the current income year; and, in the case of a fiscal year taxpayer,
on or before the first day of the fourth month of the current income year.
(b) A final return in such form and containing such information as the Secretary of Finance shall prescribe shall be filed
with the Secretary of Finance as follows: In the case of a calendar year taxpayer, on or before April 1 of the following year;
and, in the case of a fiscal year taxpayer, on or before the first day of the fourth month following the close of the fiscal
year.
(c) The first returns under this chapter shall be due as follows: In the case of a calendar year taxpayer, on or before April
1, 1958, and this tentative return shall include an estimate of the taxpayer's taxable income for the calendar year 1958;
in the case of a fiscal year taxpayer, on or before the first day of the fourth month of the taxpayer's fiscal year beginning
in 1958, and this tentative return shall include an estimate of the taxpayer's liability for such current income year; provided,
that a fiscal year taxpayer shall also file a return with respect to income earned in the period between January 1, 1958,
and the close of the taxpayer's fiscal year in 1958.
(d) Every return shall have annexed thereto a certification by the president, vice-president, treasurer, assistant treasurer,
chief accounting officer or any other officer of the taxpayer duly authorized so to act to the effect that the statements
contained therein are true to the best of the officer's knowledge and belief.
(e) Every domestic or foreign corporation not exempt under § 1902 of this title shall file an annual tentative return and
an annual final return regardless of the amount of its estimated tax liability, its gross income or its taxable income.
(f) The Secretary may require every corporation exempt from taxation under § 1902(b) of this title to file an information
return for each taxable year setting forth the items of gross income and deductions and such other information as the Secretary,
by forms or regulation, may prescribe.
30 Del. C. 1953, § 1904; 51 Del. Laws, c. 298; 57 Del. Laws, c. 67, § 1; 57 Del. Laws, c. 172; 57 Del. Laws, c. 707, § 7; 57 Del. Laws, c. 741, § 8B; 64 Del. Laws, c. 461, § 9; 68 Del. Laws, c. 187, § 13; 70 Del. Laws, c. 186, § 1.;
§ 1905. Payment of tax.
The tax imposed by this chapter shall be payable as follows:
(1) Calendar year corporations. -- Fifty percent of the estimated tax liability for the current taxable year shall be paid
with the tentative return filed on April 1 of the current taxable year, and the balance of the estimated tax shall be paid
in installments as follows: 20% on June 15 of the taxable year; 20% on September 15 of the taxable year; and 10% on December
15 of the taxable year.
(2) Fiscal year corporations. -- Fifty percent of the estimated tax liability for the current taxable year shall be paid with
the tentative return filed on the first day of the fourth month of the current taxable year, and the balance of the estimated
tax shall be paid in installments as follows: 20% on the fifteenth day of the sixth month of the taxable year; 20% on the
fifteenth day of the ninth month of the taxable year; and 10% on the fifteenth day of the twelfth month of the taxable year.
(3) Additional taxes due on final return. -- Any additional tax due as computed in the final return required to be filed pursuant
to § 1904 of this title shall be paid with such final return.
(4) Tentative tax declarations and payments are not required for returns for taxable periods of less than 92 calendar days.
30 Del. C. 1953, § 1905; 51 Del. Laws, c. 298; 51 Del. Laws, c. 315, § 5; 60 Del. Laws, c. 15, § 1; 60 Del. Laws, c. 193, § 1; 71 Del. Laws, c. 217, § 7.;
§ 1906. Short title.
This chapter shall be entitled "Delaware Corporate Income Tax Law of 1958."
30 Del. C. 1953, § 1918; 51 Del. Laws, c. 298; 51 Del. Laws, c. 315, § 14; 68 Del. Laws, c. 187, §§ 12, 14.;
§ 1907. Time of taking effect of tax.
The tax shall be first effective with respect to income earned subsequent to December 31, 1957.
30 Del. C. 1953, § 1920; 51 Del. Laws, c. 298; 51 Del. Laws, c. 315, § 16; 68 Del. Laws, c. 187, §§ 12, 14.;
§ 1908. Historic rehabilitation.
Any entity taxable under this section is eligible for tax credits in accordance with the Historic Preservation Tax Credit
Act (Chapter 18 of this title), which credits shall be against taxes imposed under this chapter; provided, however, that all
claimed credits are accompanied by a Certificate of Completion issued by the State Historic Preservation Office certifying
that such credits have been earned in compliance with that act.
73 Del. Laws, c. 6, § 7.;
§ 1909. Withholding of income tax on sale or exchange of real estate by nonresident corporations [Effective Jan. 1, 2011]
(a) Definitions. --
(1) "Director" means the Director of the Division of Revenue or the Secretary of Finance of the State.
(2) "Nonresident corporation" means, for purposes of this section, a corporation that:
a. Is not organized under the laws of this State, and
b. Is not qualified or registered with the Secretary of State to do business in this State.
(3) "Recorder" means the official with the duty to record deeds and similar instruments.
(b) Estimated tax return; alternative forms. -- Every nonresident corporation that sells or exchanges Delaware real estate
shall file with the Recorder:
(1) A "Delaware Corporate Tentative Tax Return" due for the quarter in which the sale or exchange is settled, applying the
tax rate provided under § 1902 of this title to an estimate of the gain recognized on the sale or exchange, or
(2) An alternative form prepared by the Director to calculate income tax at the tax rate provided under § 1902 of this title,
applied to the difference between the total amount realized by the transferor and the net balance due at the time of settlement
of all recorded liens encumbering the real estate, or
(3) An alternative form prepared by the Director to declare under penalties of perjury that the sale or exchange of real estate
is exempt from recognition of capital gain with respect to the tax year of the sale or exchange, with a statement of the facts
and a citation to the provision or provisions of the Internal Revenue Code (Title 26, U.S.C.) relied upon.
(c) Due date of estimated tax return, payment. -- The return or form provided for in subsection (b) of this section, and the
estimated tax reported due, shall be remitted with the deed to the Recorder before the deed shall be recorded.
(d) Payment credited to transferor. -- The estimated tax remitted under subsection (c) of this section shall be deemed to
have been paid to the Director on behalf of the nonresident transferor and the nonresident transferor shall be credited for
purposes of § 1905 of this title as a payment made on the date remitted to the Recorder.
(e) Persons or entities not liable for payments. -- Neither the transferee, title insurance producer, title insurer, settlement
agent, closing attorney, lending institution, nor the real estate agent or broker in a transaction subject to this section
shall be liable for any amounts required to be collected and paid over to the Recorder or Director under this section.
(f) Tax not imposed; lawful collection of taxes not prohibited. -- This section does not:
(1) Impose any tax on a transferor or affect any liability of the transferor for any tax; or
(2) Prohibit the Director from collecting any taxes due from a transferor in any other manner authorized by law.
77 Del. Laws, c. 291, § 3.;
§§ 1910, 1911. Interests and additions to the tax in case of deficiencies; addition to the tax in case of nonpayment; refunds.
Repealed by 68 Del. Laws, c. 187, § 12, effective Jan. 1, 1992.
§ 1912. Penalties -- Late filing; failure to file returns; false and fraudulent return; failure to maintain records.
(a) Any person who wilfully fails, neglects or refuses to make a return or to pay the tax as prescribed in this chapter or
who shall refuse to permit the Secretary of Finance to examine the books, papers and records of any corporation liable to
pay tax under this chapter shall be fined not more than $3,000, or imprisoned not more than 6 months, or both. Such penalty
shall be in addition to any other penalties imposed by this chapter.
(b) Any person who wilfully makes a false and fraudulent return of net income, made taxable by this chapter, shall be fined
not more than $3,000, or imprisoned not more than 6 months, or both. Such penalty shall be in addition to any other penalties
imposed by this chapter.
(c) Any corporation which fails to maintain and keep, for a period of 3 years after any return is filed under this chapter,
such record or records of its business within this State for the period covered by such return, as may be required by the
Secretary of Finance, shall be fined $3,000. Such penalty shall be in addition to any other penalties imposed by this chapter.
(d) [Deleted.]
(e) The Superior Court shall have exclusive jurisdiction over all offenses under this chapter.
(f) [Deleted.]
30 Del. C. 1953, § 1913; 51 Del. Laws, c. 298; 51 Del. Laws, c. 315, § 11; 57 Del. Laws, c. 66; 57 Del. Laws, c. 741, § 8B; 59 Del. Laws, c. 113, § 5; 61 Del. Laws, c. 425, §§ 1-4; 63 Del. Laws, c. 293, §§ 3, 4; 67 Del. Laws, c. 40, § 15; 68 Del. Laws, c. 187, § 12.;
§§ 1913-1916. Court action to compel furnishing of information; lien of tax; collection of tax; administration by Secretary
of Finance.
Repealed by 68 Del. Laws, c. 187, § 12, effective Jan. 1, 1992.
§§ 1917, 1918. Short title; time of taking effect of tax.
(1) "Administration services" means, in each case with respect to intangible investments (as such term is defined in § 1902(b)(8)
of this title):
a. Clerical;
b. Accounting;
c. Bookkeeping;
d. Data processing;
e. Internal auditing;
f. Tax services;
g. Regulatory compliance, operations and related services;
h. Risk analytics; and
i. Trade processing, clearing and execution services.
(2) "Asset management corporation" means a corporation:
a. Ninety percent or more of the gross receipts of which are derived from the performance of asset management services;
b. That is not exempt from taxation under this chapter pursuant to § 1902(b)(8) of this title; and
c. That makes an election for each taxable year to be treated as an asset management corporation by filing the appropriate
form of return prescribed by the Director to make such election.
For purposes of this paragraph, "gross receipts" shall mean gross receipts reported by the corporation for its taxable year
for purposes of the federal income tax.
(3) "Asset management services" means, in each case with respect to intangible investments (as such term is defined in § 1902(b)(8)
of this title):
a. Rendering investment advice, including investment analysis;
b. Making determinations as to when sales and purchases are to be made;
c. Selling or purchasing of intangible investments;
d. Rendering administration services;
e. Rendering distribution services; or
f. Managing contracts for sub-advisory services.
(4) "Board" means the Tax Appeal Board.
(5) "Commercial domicile" means the principal place from which the trade or business of the taxpayer is directed or managed.
(6) "Corporation" includes a joint stock company or any association which is taxable as a corporation under the federal income
tax law.
(7) "Distribution services" means, in each case with respect to intangible investments (as such term is defined in § 1902(b)(8)
of this title):
a. Advertising;
b. Servicing investor accounts (including redemptions);
c. Marketing shares or selling shares of corporations or business trusts registered as investment companies under the Investment
Company Act of 1940 (15 U.S.C. § 80a-1 et seq.); and
d. Marketing asset management services (including selling interests in a pool of intangible investments, such as a fund).
(8) "Domestic corporation" means any corporation organized under the laws of this State.
(9) "Domicile" means:
a. In the case of an individual, the State of the individual's domicile under the law of Delaware;
b. In the case of an estate, this State, if the estate is a resident estate under § 1601 of this title, and outside of this
State, if the estate is a nonresident estate under § 1601 of this title;
c. In the case of a trust (as defined in § 1601(9) of this title), this State, if the trust is a resident trust under § 1601
of this title, and outside of this State, if the trust is a nonresident trust under § 1601 of this title;
d. In the case of a corporation or a pass-through entity (as defined under § 1601(6)a. of this title), its commercial domicile;
provided, however, domicile shall be presumed to be the mailing address of the beneficiary of a pension plan, or the owner
of an account or interest in a pool of intangible investments based on the records of the sponsor of such pension plan, account
or pool of intangible investments or the shareholder's mailing address on the records of an investment company under the Investment
Company Act of 1940 (15 U.S.C. § 80a-1 et seq.).
(10) "Federal income tax" means the tax imposed on corporations by the federal Internal Revenue Code of 1986 and amendments
thereto.
(11) "Foreign corporation" means any corporation other than a domestic corporation.
(12) "Income year" means the taxable year for which the taxpayer computes its net income for purposes of the federal income
tax.
(13) "Risk analytics" means performing risk analysis of intangible investments (as such term is defined in § 1902(b)(8) of
this title), providing reports of such analyses and providing interactive, software-based risk analytical tools to users of
such tools.
(14) "Secretary" and "Secretary of Finance" mean the Secretary of Finance or the Secretary's duly authorized designee; provided,
that any such delegation of authority is consistent with the provisions of Chapter 83 of Title 29.
(15) "Sponsor" means the person that has contracted directly with the beneficiaries of a pension plan or retirement account
or the owner of any account or interest in a pool of intangible investments to administer and manage the pension plan or retirement
account, other account or pool of intangible investments.
(16) "State" means any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory
or possession of the United States and any foreign country or political subdivision thereof.
(17) "Taxpayer" means any corporation subject to the tax imposed by this chapter.
(18) "Treasury Department" means the Treasury Department of the United States.
30 Del. C. 1953, § 1901; 51 Del. Laws, c. 298; 51 Del. Laws, c. 315, 1; 57 Del. Laws, c. 741, § 8A; 67 Del. Laws, c. 408, § 3; 70 Del. Laws, c. 186, § 1; 76 Del. Laws, c. 234, § 4.;
§ 1902. Imposition of tax on corporations; exemptions.
(a) Every domestic or foreign corporation that is not exempt under subsection (b) of this section shall annually pay a tax
of 8.7 percent on its taxable income, computed in accordance with § 1903 of this title, which shall be deemed to be its net
income derived from business activities carried on and property located within the State during the income year. Any receiver,
referee, trustee, assignee or other fiduciary or any officer or agent appointed by any court who conducts the business of
any corporation shall be subject to the tax imposed by this chapter in the same manner and to the same extent as if the business
were conducted by the corporation.
(b) The following corporations shall be exempt from taxation under this chapter:
(1) Fraternal beneficiary societies, orders or associations:
a. Operating under the lodge system or for the exclusive benefit of the members of a fraternity itself operating under the
lodge system; and
b. Providing for the payment of life, sick, accident or other benefits to the members of such society, order or association
or their dependents;
(2) Cemetery corporations and corporations organized or trusts created for religious, charitable, scientific or educational
purposes or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit
of any private stockholder or individual;
(3) Business leagues, chambers of commerce, fire companies, merchants' associations or boards of trade not organized for profit,
and no part of the net earnings of which inures to the benefit of any private stockholder or individual;
(4) Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare;
(5) Clubs organized and operated exclusively for pleasure, recreation and other nonprofitable purposes, no part of the net
earnings of which inures to the benefit of any private stockholder or member;
(6) A corporation maintaining a statutory corporate office in the State but not doing business within the State;
(7) Insurance companies paying taxes upon gross premiums to the Insurance Commissioner;
(8) Corporations whose activities within this State are confined to the maintenance and management of their intangible investments
or of the intangible investments of corporations or statutory trusts or business trusts registered as investment companies
under the Investment Company Act of 1940, as amended (15 U.S.C. 80a-1 et seq.) and the collection and distribution of the
income from such investments or from tangible property physically located outside this State. For purposes of this paragraph,
"intangible investments" shall include, without limitation, investments in stocks, bonds, notes and other debt obligations
(including debt obligations of affiliated corporations), patents, patent applications, trademarks, trade names and similar
types of intangible assets;
(9) A corporation that is an S corporation for federal income tax purposes for any taxable year beginning on or after January
1, 1961;
(10) A corporation which qualifies as a domestic international sales corporation (DISC) under the provisions of subchapter
N of Chapter 1 of the federal Internal Revenue Code [26 U.S.C. § 861 et seq.] and which has in effect for the entire taxable
year a valid election under federal law to be treated as a DISC. If a corporation makes such an election under federal law,
each person who at any time is a shareholder of such corporation shall be subject to taxation under Chapter 11 or Chapter
19 of this title on the earnings and profits or taxable income of this DISC in the same manner as provided by federal law
for all periods for which the election is effective;
(11) An entity that is a real estate mortgage investment conduit as defined in § 860D of the Internal Revenue Code of 1986
[26 U.S.C. § 860D], as amended;
(12) An entity that is registered as an investment company under the Investment Company Act of 1940, as amended (15 U.S.C.
§ 80a-1 et seq.); and
(13) An entity that is a real estate investment trust as defined in § 856 of the Internal Revenue Code of 1986 (26 U.S.C.
§ 856) as amended;
(14) An entity that is a homeowners association as defined in § 528 of the Internal Revenue Code (26 U.S.C. § 528) or successor
provision.
30 Del. C. 1953, § 1902; 51 Del. Laws, c. 298; 51 Del. Laws, c. 315, §§ 2, 3; 57 Del. Laws, c. 136, § 1; 57 Del. Laws, c. 737, § 2; 58 Del. Laws, c. 293, § 1; 58 Del. Laws, c. 396, § 1; 59 Del. Laws, c. 150, § 1; 61 Del. Laws, c. 76, § 1; 64 Del. Laws, c. 461, § 10; 65 Del. Laws, c. 155, § 2; 65 Del. Laws, c. 160, § 4; 66 Del. Laws, c. 267, § 2; 67 Del. Laws, c. 295, § 1; 67 Del. Laws, c. 408, §§ 4, 5; 68 Del. Laws, c. 423, § 1; 69 Del. Laws, c. 188, §§ 6, 7; 71 Del. Laws, c. 314, § 4; 73 Del. Laws, c. 329, § 72; 75 Del. Laws, c. 412, § 1.;
§ 1903. Computation of taxable income.
(a) The "entire net income" of a corporation for any income year means the amount of its federal taxable income for such year
as computed for purposes of the federal income tax increased by:
(1) Any interest income (including discount) on obligations issued by states of the United States or political subdivisions
thereof other than this State and its subdivisions, and
(2) The amount of any deduction allowed for purposes of the federal income tax pursuant to § 164 of the Internal Revenue Code
(26 U.S.C. § 164) for taxes paid on, or according to or measured by, in whole or in part, such corporation's net income or
profits, to any state (including this State), territory, county or political subdivision thereof, or any tax paid in lieu
of such income tax, and its federal taxable income shall be further adjusted by eliminating:
a. Dividends received on shares of stock or voting trust certificates of foreign corporations or interest income or royalty
income, on which a foreign tax is paid, deemed paid or accrued under the applicable provisions of the United States Internal
Revenue Code [26 U.S.C. § 1 et seq.];
b. Interest income (including discount) from securities issued by the United States or agencies or instrumentalities thereof
and interest income (including discount) arising from obligations representing advances, loans or contractual transactions
between corporations which are eligible to file a consolidated return for federal income tax purposes and which are subject
to taxation under this chapter, if the paying corporation eliminates such interest (including discount) in determining its
entire net income; provided, however, that the expenses allocable to interest income from securities issued by the United
States or agencies or instrumentalities thereof shall not be allowed as a deduction;
c. Gains and losses from the sale or other disposition of securities issued by the United States or agencies or instrumentalities
thereof or by this State or political subdivisions thereof. Expenses incurred in connection with such gains and losses shall
not be considered in computing the entire net income of the corporation;
d. Any deduction allowed for depletion of oil and gas wells under § 611 of the federal Internal Revenue Code [26 U.S.C. §
611] to the extent such deduction is determined by reference to § 613 of the federal Internal Revenue Code [26 U.S.C. § 613]
(relating to percentage depletion);
e. An amount equal to the portion of the wages paid or incurred for the taxable year which is disallowed as a deduction for
federal purposes under § 280C, Internal Revenue Code [26 U.S.C. § 280C], relating to the portion of wages for which the new
jobs tax credit is claimed;
f. The cost, not to exceed $5,000, of a renovation project to remove physical design features in a building that restrict
the full use of the building by physically handicapped persons. The modification shall be allowed for the taxable year in
which the renovation project is completed and is in addition to any depreciation or amortization of the cost of the renovation
project. "Building" means a building or structure or that part of a building or structure and its related sidewalks, curbing,
driveways and entrances that are located in Delaware and open to the general public;
g. The "eligible net income" of an Edge Act corporation organized pursuant to § 25(a) of the Federal Reserve Act, 12 U.S.C.
§ 611 et seq. The eligible net income of an Edge Act corporation shall be the net income from any international banking facility
of such corporation each computed as described in § 1101(a)(1)d. and e. of Title 5;
h. Any deduction, to the extent such deduction exceeds $30,000, for a net operating loss carryback as provided for in Internal
Revenue Code § 172 [26 U.S.C. § 172] or successor provisions; provided, however, that the taxpayer may increase deductions
in any year, consistent with the operation of § 172, to carry forward losses which were carried back in calculating federal
taxable income but which were prevented from being carried back under this paragraph.
(b) "Taxable income" subject to taxation under this chapter means the portion of the entire net income of a corporation which
is allocated and apportioned to this State in accordance with the following provisions:
(1) Rents and royalties (less applicable or related expenses) from tangible property shall be allocated to the state in which
the property is physically located;
(2) Patent and copyright royalties (less applicable or related expenses) shall be allocated proportionately to the states
in which the product or process protected by the patent is manufactured or used or in which the publication protected by the
copyright is produced or printed;
(3) Gains and losses from the sale or other disposition of real property shall be allocated to the state in which the property,
and expenses incurred in connection with dispositions resulting in such gains and losses, is physically located;
(4) Gains and losses from the sale or other disposition of tangible property for which an allowance for depreciation is permitted
for federal income tax purposes, and expenses incurred in connection with dispositions resulting in such gains and losses,
shall be allocated to the state where the property is physically located or is normally used in the taxpayer's business;
(5) Interest (including discount) to the extent included in determining entire net income under subsection (a) of this section,
less related or applicable expenses, shall be allocated to the state where the transaction took place which resulted in the
creation of the obligation with respect to which the interest was earned;
(6) If the entire business of the corporation is transacted or conducted within this State, the remainder of its entire net
income shall be allocated to this State. If the business of the corporation is transacted or conducted in part without this
State, such remainder, whether income or loss, shall be apportioned to this State on the basis of the ratio obtained by taking
the arithmetical average of these 3 ratios:
a. The average of the value, at the beginning and end of the income year, of all the real and tangible personal property,
owned or rented, in this State by the taxpayer, expressed as a percentage of the average of the value at the beginning and
end of the income year of all such property of the taxpayer both within and without this State; provided, that any property,
the income from which is separately allocated under paragraph (b)(1) of this section or which is not used in the taxpayer's
business, shall be disregarded. For the purposes of this paragraph, property owned by the taxpayer shall be valued at its
original cost to the taxpayer, and property rented by the taxpayer shall be valued at 8 times the annual rental;
b. Wages, salaries and other compensation paid by the taxpayer to employees within this State, except general executive officers,
during the income year expressed as a percentage of all such wages, salaries and other compensation paid within and without
this State during the income year to all employees of the taxpayer, except general executive officers;
c. Gross receipts from sales of tangible personal property physically delivered within this State to the purchaser or the
purchaser's agent (but not including delivery to the United States mail or to a common or contract carrier for shipment to
a place outside this State) and gross income from other sources within this State for the income year expressed as a percentage
of all such gross receipts from sales of tangible personal property and gross income from other sources both within and without
the State for the income year; provided, that any receipts or items of income that are excluded in determining the taxpayer's
entire net income or are directly allocated under paragraphs (b)(1) to (5) of this section shall be disregarded.
This paragraph (b)(6) shall not apply in the case of an asset management corporation.
(7) The remainder of the entire net income of an asset management corporation shall be apportioned to this State on the basis
of the ratio of gross receipts from asset management services from sources within this State for the income year expressed
as a percentage of all such gross receipts from asset management services both within and without the State for the income
year; provided, that any receipts or items of income that are excluded in determining the taxpayer's entire net income or
are directly allocated under paragraphs (b)(1) to (5) of this section shall be disregarded. The source of gross receipts from
asset management services shall be determined as follows:
a. In the case of asset management services provided directly or indirectly to an individual, gross receipts with respect
to such services shall be sourced to the State of the individual's domicile.
b. In the case of asset management services provided directly or indirectly to an institutional investor holding investments
for the benefit of others, such as a pension plan, retirement account or pool of intangible investments, including a fund
(other than an investment company under the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.)), or to an institutional
investor organized as a pass-through entity (as defined in § 1601(6)a. of this title), gross receipts with respect to such
services shall be sourced according to the following rules in the following order:
1. If information regarding domicile of beneficiaries, owners or members is available to the asset management corporation
providing asset management services to a pension plan, retirement account or pool of intangible investments, including a fund
(other than an investment company under the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.)), or to an institutional
investor organized as a pass-through entity (as defined in § 1601(6)a. of this title) through the exercise of reasonable diligence
in ascertaining such information, gross receipts with respect to such services shall be sourced to the domicile of such beneficiaries,
owners or members;
2. If information regarding domicile of beneficiaries, owners or members is not available to the asset management corporation
providing asset management services to a pension plan, retirement account or pool of intangible investments, including a fund
(other than an investment company under the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.)), or to an institutional
investor organized as a pass-through entity (as defined in § 1601(6)a. of this title) through the exercise of reasonable diligence
in ascertaining such information, a reasonable alternative method based on information readily available to the asset management
corporation may be used to determine the source of gross receipts with respect to such services, and such reasonable alternative
method shall be disclosed and explained in the return in which the method is used. The burden of demonstrating the reasonableness
of the method rests on the taxpayer. Based on facts and circumstances in specific cases, reasonable alternative methods used
to determine the source of gross receipts from asset management services may take into account the latest population census
data available from the United States Census Bureau, the domicile of the sponsor of a pension plan or retirement account or
an account or pool of intangible investments (other than an investment company under the Investment Company Act of 1940 (15
U.S.C. § 80a-1 et seq.)) or the domicile of an institutional investor organized as a pass-through entity (as defined in §
1601(6)a. of this title); or,
3. If
A. The domicile of beneficiaries, owners or members is not ascertained under paragraph (b)(7)b.1. of this section; or,
B. No reasonable alternative sourcing method exists under paragraph (b)(7)b.2. of this section, gross receipts with respect
to such services shall be sourced to the domicile of the institutional investor or the domicile of the sponsor of a pension
plan or retirement account or an account or pool of intangible investments, including a fund (other than an investment company
under the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.)), to which asset management services are provided.
c. In the case of asset management services provided directly or indirectly to an investment company under the Investment
Company Act of 1940 (15 U.S.C. § 80a-1 et seq.), gross receipts with respect to such services shall be sourced to the domicile
of the shareholders of such investment company in accordance with the following procedure: the portion of the gross receipts
with respect to such services that are sourced to this State shall be determined by multiplying the total of such gross receipts
by a fraction, the numerator of which is the average of the sum of the beginning of year and the end of year balance of shares
owned by the investment company shareholders domiciled in this State for the investment company's taxable year for federal
income tax purposes and the denominator of which is the average of the sum of the beginning of year and the end of year balance
of shares owned by all investment company shareholders. A separate computation shall be made with respect to gross receipts
for asset management services provided directly or indirectly to each investment company.
d. In the case of asset management services provided directly or indirectly to a person other than those persons described
in paragraph (b)(7)a. through c. of this section, to the domicile of such person.
(c) If, in the discretion of the Secretary of Finance, the application of the allocation or apportionment provisions of this
section result in an unfair or inequitable proportion of the taxpayer's entire net income being assigned to this State, then
the Secretary of Finance or the Secretary's delegate may permit or require the exclusion or alteration of the weight to be
given to 1 or more of the factors in the formula specified above or the use of separate accounting or other method to produce
a fair and equitable result.
(d) In determining the taxable income of a fiscal year taxpayer for that portion of its fiscal year ending within 1977 which
falls within the calendar year 1977, the taxpayer may, at its election, treat such period as though it were the entire fiscal
year, or it may compute its taxable income for the entire fiscal year and pay the tax herein imposed on that portion of the
taxable income so determined which the number of days from January 1, 1977, to the close of the fiscal year in 1977 bears
to 365.
30 Del. C. 1953, § 1903; 51 Del. Laws, c. 298; 51 Del. Laws, c. 315, § 4; 57 Del. Laws, c. 136, §§ 2, 3; 57 Del. Laws, c. 188, §§ 19, 41; 57 Del. Laws, c. 533; 57 Del. Laws, c. 741, § 8B; 58 Del. Laws, c. 320; 59 Del. Laws, c. 113, §§ 1, 2; 60 Del. Laws, c. 18, § 3; 61 Del. Laws, c. 76, § 2; 61 Del. Laws, c. 297, § 1; 62 Del. Laws, c. 56, § 3; 63 Del. Laws, c. 295, § 2; 64 Del. Laws, c. 43, § 8; 67 Del. Laws, c. 263, §§ 1, 2; 68 Del. Laws, c. 82, §§ 9, 10; 70 Del. Laws, c. 186, § 1; 71 Del. Laws, c. 19, § 80; 71 Del. Laws, c. 217, §§ 3-6; 76 Del. Laws, c. 234, §§ 5, 6.;
§ 1904. Returns.
(a) A tentative return, covering estimated income tax liability for the current income year, to be in such form and containing
such information as the Secretary of Finance shall prescribe, shall be filed with the Secretary of Finance as follows: In
the case of a calendar year taxpayer, on or before April 1 of the current income year; and, in the case of a fiscal year taxpayer,
on or before the first day of the fourth month of the current income year.
(b) A final return in such form and containing such information as the Secretary of Finance shall prescribe shall be filed
with the Secretary of Finance as follows: In the case of a calendar year taxpayer, on or before April 1 of the following year;
and, in the case of a fiscal year taxpayer, on or before the first day of the fourth month following the close of the fiscal
year.
(c) The first returns under this chapter shall be due as follows: In the case of a calendar year taxpayer, on or before April
1, 1958, and this tentative return shall include an estimate of the taxpayer's taxable income for the calendar year 1958;
in the case of a fiscal year taxpayer, on or before the first day of the fourth month of the taxpayer's fiscal year beginning
in 1958, and this tentative return shall include an estimate of the taxpayer's liability for such current income year; provided,
that a fiscal year taxpayer shall also file a return with respect to income earned in the period between January 1, 1958,
and the close of the taxpayer's fiscal year in 1958.
(d) Every return shall have annexed thereto a certification by the president, vice-president, treasurer, assistant treasurer,
chief accounting officer or any other officer of the taxpayer duly authorized so to act to the effect that the statements
contained therein are true to the best of the officer's knowledge and belief.
(e) Every domestic or foreign corporation not exempt under § 1902 of this title shall file an annual tentative return and
an annual final return regardless of the amount of its estimated tax liability, its gross income or its taxable income.
(f) The Secretary may require every corporation exempt from taxation under § 1902(b) of this title to file an information
return for each taxable year setting forth the items of gross income and deductions and such other information as the Secretary,
by forms or regulation, may prescribe.
30 Del. C. 1953, § 1904; 51 Del. Laws, c. 298; 57 Del. Laws, c. 67, § 1; 57 Del. Laws, c. 172; 57 Del. Laws, c. 707, § 7; 57 Del. Laws, c. 741, § 8B; 64 Del. Laws, c. 461, § 9; 68 Del. Laws, c. 187, § 13; 70 Del. Laws, c. 186, § 1.;
§ 1905. Payment of tax.
The tax imposed by this chapter shall be payable as follows:
(1) Calendar year corporations. -- Fifty percent of the estimated tax liability for the current taxable year shall be paid
with the tentative return filed on April 1 of the current taxable year, and the balance of the estimated tax shall be paid
in installments as follows: 20% on June 15 of the taxable year; 20% on September 15 of the taxable year; and 10% on December
15 of the taxable year.
(2) Fiscal year corporations. -- Fifty percent of the estimated tax liability for the current taxable year shall be paid with
the tentative return filed on the first day of the fourth month of the current taxable year, and the balance of the estimated
tax shall be paid in installments as follows: 20% on the fifteenth day of the sixth month of the taxable year; 20% on the
fifteenth day of the ninth month of the taxable year; and 10% on the fifteenth day of the twelfth month of the taxable year.
(3) Additional taxes due on final return. -- Any additional tax due as computed in the final return required to be filed pursuant
to § 1904 of this title shall be paid with such final return.
(4) Tentative tax declarations and payments are not required for returns for taxable periods of less than 92 calendar days.
30 Del. C. 1953, § 1905; 51 Del. Laws, c. 298; 51 Del. Laws, c. 315, § 5; 60 Del. Laws, c. 15, § 1; 60 Del. Laws, c. 193, § 1; 71 Del. Laws, c. 217, § 7.;
§ 1906. Short title.
This chapter shall be entitled "Delaware Corporate Income Tax Law of 1958."
30 Del. C. 1953, § 1918; 51 Del. Laws, c. 298; 51 Del. Laws, c. 315, § 14; 68 Del. Laws, c. 187, §§ 12, 14.;
§ 1907. Time of taking effect of tax.
The tax shall be first effective with respect to income earned subsequent to December 31, 1957.
30 Del. C. 1953, § 1920; 51 Del. Laws, c. 298; 51 Del. Laws, c. 315, § 16; 68 Del. Laws, c. 187, §§ 12, 14.;
§ 1908. Historic rehabilitation.
Any entity taxable under this section is eligible for tax credits in accordance with the Historic Preservation Tax Credit
Act (Chapter 18 of this title), which credits shall be against taxes imposed under this chapter; provided, however, that all
claimed credits are accompanied by a Certificate of Completion issued by the State Historic Preservation Office certifying
that such credits have been earned in compliance with that act.
73 Del. Laws, c. 6, § 7.;
§ 1909. Withholding of income tax on sale or exchange of real estate by nonresident corporations [Effective Jan. 1, 2011]
(a) Definitions. --
(1) "Director" means the Director of the Division of Revenue or the Secretary of Finance of the State.
(2) "Nonresident corporation" means, for purposes of this section, a corporation that:
a. Is not organized under the laws of this State, and
b. Is not qualified or registered with the Secretary of State to do business in this State.
(3) "Recorder" means the official with the duty to record deeds and similar instruments.
(b) Estimated tax return; alternative forms. -- Every nonresident corporation that sells or exchanges Delaware real estate
shall file with the Recorder:
(1) A "Delaware Corporate Tentative Tax Return" due for the quarter in which the sale or exchange is settled, applying the
tax rate provided under § 1902 of this title to an estimate of the gain recognized on the sale or exchange, or
(2) An alternative form prepared by the Director to calculate income tax at the tax rate provided under § 1902 of this title,
applied to the difference between the total amount realized by the transferor and the net balance due at the time of settlement
of all recorded liens encumbering the real estate, or
(3) An alternative form prepared by the Director to declare under penalties of perjury that the sale or exchange of real estate
is exempt from recognition of capital gain with respect to the tax year of the sale or exchange, with a statement of the facts
and a citation to the provision or provisions of the Internal Revenue Code (Title 26, U.S.C.) relied upon.
(c) Due date of estimated tax return, payment. -- The return or form provided for in subsection (b) of this section, and the
estimated tax reported due, shall be remitted with the deed to the Recorder before the deed shall be recorded.
(d) Payment credited to transferor. -- The estimated tax remitted under subsection (c) of this section shall be deemed to
have been paid to the Director on behalf of the nonresident transferor and the nonresident transferor shall be credited for
purposes of § 1905 of this title as a payment made on the date remitted to the Recorder.
(e) Persons or entities not liable for payments. -- Neither the transferee, title insurance producer, title insurer, settlement
agent, closing attorney, lending institution, nor the real estate agent or broker in a transaction subject to this section
shall be liable for any amounts required to be collected and paid over to the Recorder or Director under this section.
(f) Tax not imposed; lawful collection of taxes not prohibited. -- This section does not:
(1) Impose any tax on a transferor or affect any liability of the transferor for any tax; or
(2) Prohibit the Director from collecting any taxes due from a transferor in any other manner authorized by law.
77 Del. Laws, c. 291, § 3.;
§§ 1910, 1911. Interests and additions to the tax in case of deficiencies; addition to the tax in case of nonpayment; refunds.
Repealed by 68 Del. Laws, c. 187, § 12, effective Jan. 1, 1992.
§ 1912. Penalties -- Late filing; failure to file returns; false and fraudulent return; failure to maintain records.
(a) Any person who wilfully fails, neglects or refuses to make a return or to pay the tax as prescribed in this chapter or
who shall refuse to permit the Secretary of Finance to examine the books, papers and records of any corporation liable to
pay tax under this chapter shall be fined not more than $3,000, or imprisoned not more than 6 months, or both. Such penalty
shall be in addition to any other penalties imposed by this chapter.
(b) Any person who wilfully makes a false and fraudulent return of net income, made taxable by this chapter, shall be fined
not more than $3,000, or imprisoned not more than 6 months, or both. Such penalty shall be in addition to any other penalties
imposed by this chapter.
(c) Any corporation which fails to maintain and keep, for a period of 3 years after any return is filed under this chapter,
such record or records of its business within this State for the period covered by such return, as may be required by the
Secretary of Finance, shall be fined $3,000. Such penalty shall be in addition to any other penalties imposed by this chapter.
(d) [Deleted.]
(e) The Superior Court shall have exclusive jurisdiction over all offenses under this chapter.
(f) [Deleted.]
30 Del. C. 1953, § 1913; 51 Del. Laws, c. 298; 51 Del. Laws, c. 315, § 11; 57 Del. Laws, c. 66; 57 Del. Laws, c. 741, § 8B; 59 Del. Laws, c. 113, § 5; 61 Del. Laws, c. 425, §§ 1-4; 63 Del. Laws, c. 293, §§ 3, 4; 67 Del. Laws, c. 40, § 15; 68 Del. Laws, c. 187, § 12.;
§§ 1913-1916. Court action to compel furnishing of information; lien of tax; collection of tax; administration by Secretary
of Finance.
Repealed by 68 Del. Laws, c. 187, § 12, effective Jan. 1, 1992.
§§ 1917, 1918. Short title; time of taking effect of tax.
(1) "Administration services" means, in each case with respect to intangible investments (as such term is defined in § 1902(b)(8)
of this title):
a. Clerical;
b. Accounting;
c. Bookkeeping;
d. Data processing;
e. Internal auditing;
f. Tax services;
g. Regulatory compliance, operations and related services;
h. Risk analytics; and
i. Trade processing, clearing and execution services.
(2) "Asset management corporation" means a corporation:
a. Ninety percent or more of the gross receipts of which are derived from the performance of asset management services;
b. That is not exempt from taxation under this chapter pursuant to § 1902(b)(8) of this title; and
c. That makes an election for each taxable year to be treated as an asset management corporation by filing the appropriate
form of return prescribed by the Director to make such election.
For purposes of this paragraph, "gross receipts" shall mean gross receipts reported by the corporation for its taxable year
for purposes of the federal income tax.
(3) "Asset management services" means, in each case with respect to intangible investments (as such term is defined in § 1902(b)(8)
of this title):
a. Rendering investment advice, including investment analysis;
b. Making determinations as to when sales and purchases are to be made;
c. Selling or purchasing of intangible investments;
d. Rendering administration services;
e. Rendering distribution services; or
f. Managing contracts for sub-advisory services.
(4) "Board" means the Tax Appeal Board.
(5) "Commercial domicile" means the principal place from which the trade or business of the taxpayer is directed or managed.
(6) "Corporation" includes a joint stock company or any association which is taxable as a corporation under the federal income
tax law.
(7) "Distribution services" means, in each case with respect to intangible investments (as such term is defined in § 1902(b)(8)
of this title):
a. Advertising;
b. Servicing investor accounts (including redemptions);
c. Marketing shares or selling shares of corporations or business trusts registered as investment companies under the Investment
Company Act of 1940 (15 U.S.C. § 80a-1 et seq.); and
d. Marketing asset management services (including selling interests in a pool of intangible investments, such as a fund).
(8) "Domestic corporation" means any corporation organized under the laws of this State.
(9) "Domicile" means:
a. In the case of an individual, the State of the individual's domicile under the law of Delaware;
b. In the case of an estate, this State, if the estate is a resident estate under § 1601 of this title, and outside of this
State, if the estate is a nonresident estate under § 1601 of this title;
c. In the case of a trust (as defined in § 1601(9) of this title), this State, if the trust is a resident trust under § 1601
of this title, and outside of this State, if the trust is a nonresident trust under § 1601 of this title;
d. In the case of a corporation or a pass-through entity (as defined under § 1601(6)a. of this title), its commercial domicile;
provided, however, domicile shall be presumed to be the mailing address of the beneficiary of a pension plan, or the owner
of an account or interest in a pool of intangible investments based on the records of the sponsor of such pension plan, account
or pool of intangible investments or the shareholder's mailing address on the records of an investment company under the Investment
Company Act of 1940 (15 U.S.C. § 80a-1 et seq.).
(10) "Federal income tax" means the tax imposed on corporations by the federal Internal Revenue Code of 1986 and amendments
thereto.
(11) "Foreign corporation" means any corporation other than a domestic corporation.
(12) "Income year" means the taxable year for which the taxpayer computes its net income for purposes of the federal income
tax.
(13) "Risk analytics" means performing risk analysis of intangible investments (as such term is defined in § 1902(b)(8) of
this title), providing reports of such analyses and providing interactive, software-based risk analytical tools to users of
such tools.
(14) "Secretary" and "Secretary of Finance" mean the Secretary of Finance or the Secretary's duly authorized designee; provided,
that any such delegation of authority is consistent with the provisions of Chapter 83 of Title 29.
(15) "Sponsor" means the person that has contracted directly with the beneficiaries of a pension plan or retirement account
or the owner of any account or interest in a pool of intangible investments to administer and manage the pension plan or retirement
account, other account or pool of intangible investments.
(16) "State" means any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory
or possession of the United States and any foreign country or political subdivision thereof.
(17) "Taxpayer" means any corporation subject to the tax imposed by this chapter.
(18) "Treasury Department" means the Treasury Department of the United States.
30 Del. C. 1953, § 1901; 51 Del. Laws, c. 298; 51 Del. Laws, c. 315, 1; 57 Del. Laws, c. 741, § 8A; 67 Del. Laws, c. 408, § 3; 70 Del. Laws, c. 186, § 1; 76 Del. Laws, c. 234, § 4.;
§ 1902. Imposition of tax on corporations; exemptions.
(a) Every domestic or foreign corporation that is not exempt under subsection (b) of this section shall annually pay a tax
of 8.7 percent on its taxable income, computed in accordance with § 1903 of this title, which shall be deemed to be its net
income derived from business activities carried on and property located within the State during the income year. Any receiver,
referee, trustee, assignee or other fiduciary or any officer or agent appointed by any court who conducts the business of
any corporation shall be subject to the tax imposed by this chapter in the same manner and to the same extent as if the business
were conducted by the corporation.
(b) The following corporations shall be exempt from taxation under this chapter:
(1) Fraternal beneficiary societies, orders or associations:
a. Operating under the lodge system or for the exclusive benefit of the members of a fraternity itself operating under the
lodge system; and
b. Providing for the payment of life, sick, accident or other benefits to the members of such society, order or association
or their dependents;
(2) Cemetery corporations and corporations organized or trusts created for religious, charitable, scientific or educational
purposes or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit
of any private stockholder or individual;
(3) Business leagues, chambers of commerce, fire companies, merchants' associations or boards of trade not organized for profit,
and no part of the net earnings of which inures to the benefit of any private stockholder or individual;
(4) Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare;
(5) Clubs organized and operated exclusively for pleasure, recreation and other nonprofitable purposes, no part of the net
earnings of which inures to the benefit of any private stockholder or member;
(6) A corporation maintaining a statutory corporate office in the State but not doing business within the State;
(7) Insurance companies paying taxes upon gross premiums to the Insurance Commissioner;
(8) Corporations whose activities within this State are confined to the maintenance and management of their intangible investments
or of the intangible investments of corporations or statutory trusts or business trusts registered as investment companies
under the Investment Company Act of 1940, as amended (15 U.S.C. 80a-1 et seq.) and the collection and distribution of the
income from such investments or from tangible property physically located outside this State. For purposes of this paragraph,
"intangible investments" shall include, without limitation, investments in stocks, bonds, notes and other debt obligations
(including debt obligations of affiliated corporations), patents, patent applications, trademarks, trade names and similar
types of intangible assets;
(9) A corporation that is an S corporation for federal income tax purposes for any taxable year beginning on or after January
1, 1961;
(10) A corporation which qualifies as a domestic international sales corporation (DISC) under the provisions of subchapter
N of Chapter 1 of the federal Internal Revenue Code [26 U.S.C. § 861 et seq.] and which has in effect for the entire taxable
year a valid election under federal law to be treated as a DISC. If a corporation makes such an election under federal law,
each person who at any time is a shareholder of such corporation shall be subject to taxation under Chapter 11 or Chapter
19 of this title on the earnings and profits or taxable income of this DISC in the same manner as provided by federal law
for all periods for which the election is effective;
(11) An entity that is a real estate mortgage investment conduit as defined in § 860D of the Internal Revenue Code of 1986
[26 U.S.C. § 860D], as amended;
(12) An entity that is registered as an investment company under the Investment Company Act of 1940, as amended (15 U.S.C.
§ 80a-1 et seq.); and
(13) An entity that is a real estate investment trust as defined in § 856 of the Internal Revenue Code of 1986 (26 U.S.C.
§ 856) as amended;
(14) An entity that is a homeowners association as defined in § 528 of the Internal Revenue Code (26 U.S.C. § 528) or successor
provision.
30 Del. C. 1953, § 1902; 51 Del. Laws, c. 298; 51 Del. Laws, c. 315, §§ 2, 3; 57 Del. Laws, c. 136, § 1; 57 Del. Laws, c. 737, § 2; 58 Del. Laws, c. 293, § 1; 58 Del. Laws, c. 396, § 1; 59 Del. Laws, c. 150, § 1; 61 Del. Laws, c. 76, § 1; 64 Del. Laws, c. 461, § 10; 65 Del. Laws, c. 155, § 2; 65 Del. Laws, c. 160, § 4; 66 Del. Laws, c. 267, § 2; 67 Del. Laws, c. 295, § 1; 67 Del. Laws, c. 408, §§ 4, 5; 68 Del. Laws, c. 423, § 1; 69 Del. Laws, c. 188, §§ 6, 7; 71 Del. Laws, c. 314, § 4; 73 Del. Laws, c. 329, § 72; 75 Del. Laws, c. 412, § 1.;
§ 1903. Computation of taxable income.
(a) The "entire net income" of a corporation for any income year means the amount of its federal taxable income for such year
as computed for purposes of the federal income tax increased by:
(1) Any interest income (including discount) on obligations issued by states of the United States or political subdivisions
thereof other than this State and its subdivisions, and
(2) The amount of any deduction allowed for purposes of the federal income tax pursuant to § 164 of the Internal Revenue Code
(26 U.S.C. § 164) for taxes paid on, or according to or measured by, in whole or in part, such corporation's net income or
profits, to any state (including this State), territory, county or political subdivision thereof, or any tax paid in lieu
of such income tax, and its federal taxable income shall be further adjusted by eliminating:
a. Dividends received on shares of stock or voting trust certificates of foreign corporations or interest income or royalty
income, on which a foreign tax is paid, deemed paid or accrued under the applicable provisions of the United States Internal
Revenue Code [26 U.S.C. § 1 et seq.];
b. Interest income (including discount) from securities issued by the United States or agencies or instrumentalities thereof
and interest income (including discount) arising from obligations representing advances, loans or contractual transactions
between corporations which are eligible to file a consolidated return for federal income tax purposes and which are subject
to taxation under this chapter, if the paying corporation eliminates such interest (including discount) in determining its
entire net income; provided, however, that the expenses allocable to interest income from securities issued by the United
States or agencies or instrumentalities thereof shall not be allowed as a deduction;
c. Gains and losses from the sale or other disposition of securities issued by the United States or agencies or instrumentalities
thereof or by this State or political subdivisions thereof. Expenses incurred in connection with such gains and losses shall
not be considered in computing the entire net income of the corporation;
d. Any deduction allowed for depletion of oil and gas wells under § 611 of the federal Internal Revenue Code [26 U.S.C. §
611] to the extent such deduction is determined by reference to § 613 of the federal Internal Revenue Code [26 U.S.C. § 613]
(relating to percentage depletion);
e. An amount equal to the portion of the wages paid or incurred for the taxable year which is disallowed as a deduction for
federal purposes under § 280C, Internal Revenue Code [26 U.S.C. § 280C], relating to the portion of wages for which the new
jobs tax credit is claimed;
f. The cost, not to exceed $5,000, of a renovation project to remove physical design features in a building that restrict
the full use of the building by physically handicapped persons. The modification shall be allowed for the taxable year in
which the renovation project is completed and is in addition to any depreciation or amortization of the cost of the renovation
project. "Building" means a building or structure or that part of a building or structure and its related sidewalks, curbing,
driveways and entrances that are located in Delaware and open to the general public;
g. The "eligible net income" of an Edge Act corporation organized pursuant to § 25(a) of the Federal Reserve Act, 12 U.S.C.
§ 611 et seq. The eligible net income of an Edge Act corporation shall be the net income from any international banking facility
of such corporation each computed as described in § 1101(a)(1)d. and e. of Title 5;
h. Any deduction, to the extent such deduction exceeds $30,000, for a net operating loss carryback as provided for in Internal
Revenue Code § 172 [26 U.S.C. § 172] or successor provisions; provided, however, that the taxpayer may increase deductions
in any year, consistent with the operation of § 172, to carry forward losses which were carried back in calculating federal
taxable income but which were prevented from being carried back under this paragraph.
(b) "Taxable income" subject to taxation under this chapter means the portion of the entire net income of a corporation which
is allocated and apportioned to this State in accordance with the following provisions:
(1) Rents and royalties (less applicable or related expenses) from tangible property shall be allocated to the state in which
the property is physically located;
(2) Patent and copyright royalties (less applicable or related expenses) shall be allocated proportionately to the states
in which the product or process protected by the patent is manufactured or used or in which the publication protected by the
copyright is produced or printed;
(3) Gains and losses from the sale or other disposition of real property shall be allocated to the state in which the property,
and expenses incurred in connection with dispositions resulting in such gains and losses, is physically located;
(4) Gains and losses from the sale or other disposition of tangible property for which an allowance for depreciation is permitted
for federal income tax purposes, and expenses incurred in connection with dispositions resulting in such gains and losses,
shall be allocated to the state where the property is physically located or is normally used in the taxpayer's business;
(5) Interest (including discount) to the extent included in determining entire net income under subsection (a) of this section,
less related or applicable expenses, shall be allocated to the state where the transaction took place which resulted in the
creation of the obligation with respect to which the interest was earned;
(6) If the entire business of the corporation is transacted or conducted within this State, the remainder of its entire net
income shall be allocated to this State. If the business of the corporation is transacted or conducted in part without this
State, such remainder, whether income or loss, shall be apportioned to this State on the basis of the ratio obtained by taking
the arithmetical average of these 3 ratios:
a. The average of the value, at the beginning and end of the income year, of all the real and tangible personal property,
owned or rented, in this State by the taxpayer, expressed as a percentage of the average of the value at the beginning and
end of the income year of all such property of the taxpayer both within and without this State; provided, that any property,
the income from which is separately allocated under paragraph (b)(1) of this section or which is not used in the taxpayer's
business, shall be disregarded. For the purposes of this paragraph, property owned by the taxpayer shall be valued at its
original cost to the taxpayer, and property rented by the taxpayer shall be valued at 8 times the annual rental;
b. Wages, salaries and other compensation paid by the taxpayer to employees within this State, except general executive officers,
during the income year expressed as a percentage of all such wages, salaries and other compensation paid within and without
this State during the income year to all employees of the taxpayer, except general executive officers;
c. Gross receipts from sales of tangible personal property physically delivered within this State to the purchaser or the
purchaser's agent (but not including delivery to the United States mail or to a common or contract carrier for shipment to
a place outside this State) and gross income from other sources within this State for the income year expressed as a percentage
of all such gross receipts from sales of tangible personal property and gross income from other sources both within and without
the State for the income year; provided, that any receipts or items of income that are excluded in determining the taxpayer's
entire net income or are directly allocated under paragraphs (b)(1) to (5) of this section shall be disregarded.
This paragraph (b)(6) shall not apply in the case of an asset management corporation.
(7) The remainder of the entire net income of an asset management corporation shall be apportioned to this State on the basis
of the ratio of gross receipts from asset management services from sources within this State for the income year expressed
as a percentage of all such gross receipts from asset management services both within and without the State for the income
year; provided, that any receipts or items of income that are excluded in determining the taxpayer's entire net income or
are directly allocated under paragraphs (b)(1) to (5) of this section shall be disregarded. The source of gross receipts from
asset management services shall be determined as follows:
a. In the case of asset management services provided directly or indirectly to an individual, gross receipts with respect
to such services shall be sourced to the State of the individual's domicile.
b. In the case of asset management services provided directly or indirectly to an institutional investor holding investments
for the benefit of others, such as a pension plan, retirement account or pool of intangible investments, including a fund
(other than an investment company under the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.)), or to an institutional
investor organized as a pass-through entity (as defined in § 1601(6)a. of this title), gross receipts with respect to such
services shall be sourced according to the following rules in the following order:
1. If information regarding domicile of beneficiaries, owners or members is available to the asset management corporation
providing asset management services to a pension plan, retirement account or pool of intangible investments, including a fund
(other than an investment company under the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.)), or to an institutional
investor organized as a pass-through entity (as defined in § 1601(6)a. of this title) through the exercise of reasonable diligence
in ascertaining such information, gross receipts with respect to such services shall be sourced to the domicile of such beneficiaries,
owners or members;
2. If information regarding domicile of beneficiaries, owners or members is not available to the asset management corporation
providing asset management services to a pension plan, retirement account or pool of intangible investments, including a fund
(other than an investment company under the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.)), or to an institutional
investor organized as a pass-through entity (as defined in § 1601(6)a. of this title) through the exercise of reasonable diligence
in ascertaining such information, a reasonable alternative method based on information readily available to the asset management
corporation may be used to determine the source of gross receipts with respect to such services, and such reasonable alternative
method shall be disclosed and explained in the return in which the method is used. The burden of demonstrating the reasonableness
of the method rests on the taxpayer. Based on facts and circumstances in specific cases, reasonable alternative methods used
to determine the source of gross receipts from asset management services may take into account the latest population census
data available from the United States Census Bureau, the domicile of the sponsor of a pension plan or retirement account or
an account or pool of intangible investments (other than an investment company under the Investment Company Act of 1940 (15
U.S.C. § 80a-1 et seq.)) or the domicile of an institutional investor organized as a pass-through entity (as defined in §
1601(6)a. of this title); or,
3. If
A. The domicile of beneficiaries, owners or members is not ascertained under paragraph (b)(7)b.1. of this section; or,
B. No reasonable alternative sourcing method exists under paragraph (b)(7)b.2. of this section, gross receipts with respect
to such services shall be sourced to the domicile of the institutional investor or the domicile of the sponsor of a pension
plan or retirement account or an account or pool of intangible investments, including a fund (other than an investment company
under the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.)), to which asset management services are provided.
c. In the case of asset management services provided directly or indirectly to an investment company under the Investment
Company Act of 1940 (15 U.S.C. § 80a-1 et seq.), gross receipts with respect to such services shall be sourced to the domicile
of the shareholders of such investment company in accordance with the following procedure: the portion of the gross receipts
with respect to such services that are sourced to this State shall be determined by multiplying the total of such gross receipts
by a fraction, the numerator of which is the average of the sum of the beginning of year and the end of year balance of shares
owned by the investment company shareholders domiciled in this State for the investment company's taxable year for federal
income tax purposes and the denominator of which is the average of the sum of the beginning of year and the end of year balance
of shares owned by all investment company shareholders. A separate computation shall be made with respect to gross receipts
for asset management services provided directly or indirectly to each investment company.
d. In the case of asset management services provided directly or indirectly to a person other than those persons described
in paragraph (b)(7)a. through c. of this section, to the domicile of such person.
(c) If, in the discretion of the Secretary of Finance, the application of the allocation or apportionment provisions of this
section result in an unfair or inequitable proportion of the taxpayer's entire net income being assigned to this State, then
the Secretary of Finance or the Secretary's delegate may permit or require the exclusion or alteration of the weight to be
given to 1 or more of the factors in the formula specified above or the use of separate accounting or other method to produce
a fair and equitable result.
(d) In determining the taxable income of a fiscal year taxpayer for that portion of its fiscal year ending within 1977 which
falls within the calendar year 1977, the taxpayer may, at its election, treat such period as though it were the entire fiscal
year, or it may compute its taxable income for the entire fiscal year and pay the tax herein imposed on that portion of the
taxable income so determined which the number of days from January 1, 1977, to the close of the fiscal year in 1977 bears
to 365.
30 Del. C. 1953, § 1903; 51 Del. Laws, c. 298; 51 Del. Laws, c. 315, § 4; 57 Del. Laws, c. 136, §§ 2, 3; 57 Del. Laws, c. 188, §§ 19, 41; 57 Del. Laws, c. 533; 57 Del. Laws, c. 741, § 8B; 58 Del. Laws, c. 320; 59 Del. Laws, c. 113, §§ 1, 2; 60 Del. Laws, c. 18, § 3; 61 Del. Laws, c. 76, § 2; 61 Del. Laws, c. 297, § 1; 62 Del. Laws, c. 56, § 3; 63 Del. Laws, c. 295, § 2; 64 Del. Laws, c. 43, § 8; 67 Del. Laws, c. 263, §§ 1, 2; 68 Del. Laws, c. 82, §§ 9, 10; 70 Del. Laws, c. 186, § 1; 71 Del. Laws, c. 19, § 80; 71 Del. Laws, c. 217, §§ 3-6; 76 Del. Laws, c. 234, §§ 5, 6.;
§ 1904. Returns.
(a) A tentative return, covering estimated income tax liability for the current income year, to be in such form and containing
such information as the Secretary of Finance shall prescribe, shall be filed with the Secretary of Finance as follows: In
the case of a calendar year taxpayer, on or before April 1 of the current income year; and, in the case of a fiscal year taxpayer,
on or before the first day of the fourth month of the current income year.
(b) A final return in such form and containing such information as the Secretary of Finance shall prescribe shall be filed
with the Secretary of Finance as follows: In the case of a calendar year taxpayer, on or before April 1 of the following year;
and, in the case of a fiscal year taxpayer, on or before the first day of the fourth month following the close of the fiscal
year.
(c) The first returns under this chapter shall be due as follows: In the case of a calendar year taxpayer, on or before April
1, 1958, and this tentative return shall include an estimate of the taxpayer's taxable income for the calendar year 1958;
in the case of a fiscal year taxpayer, on or before the first day of the fourth month of the taxpayer's fiscal year beginning
in 1958, and this tentative return shall include an estimate of the taxpayer's liability for such current income year; provided,
that a fiscal year taxpayer shall also file a return with respect to income earned in the period between January 1, 1958,
and the close of the taxpayer's fiscal year in 1958.
(d) Every return shall have annexed thereto a certification by the president, vice-president, treasurer, assistant treasurer,
chief accounting officer or any other officer of the taxpayer duly authorized so to act to the effect that the statements
contained therein are true to the best of the officer's knowledge and belief.
(e) Every domestic or foreign corporation not exempt under § 1902 of this title shall file an annual tentative return and
an annual final return regardless of the amount of its estimated tax liability, its gross income or its taxable income.
(f) The Secretary may require every corporation exempt from taxation under § 1902(b) of this title to file an information
return for each taxable year setting forth the items of gross income and deductions and such other information as the Secretary,
by forms or regulation, may prescribe.
30 Del. C. 1953, § 1904; 51 Del. Laws, c. 298; 57 Del. Laws, c. 67, § 1; 57 Del. Laws, c. 172; 57 Del. Laws, c. 707, § 7; 57 Del. Laws, c. 741, § 8B; 64 Del. Laws, c. 461, § 9; 68 Del. Laws, c. 187, § 13; 70 Del. Laws, c. 186, § 1.;
§ 1905. Payment of tax.
The tax imposed by this chapter shall be payable as follows:
(1) Calendar year corporations. -- Fifty percent of the estimated tax liability for the current taxable year shall be paid
with the tentative return filed on April 1 of the current taxable year, and the balance of the estimated tax shall be paid
in installments as follows: 20% on June 15 of the taxable year; 20% on September 15 of the taxable year; and 10% on December
15 of the taxable year.
(2) Fiscal year corporations. -- Fifty percent of the estimated tax liability for the current taxable year shall be paid with
the tentative return filed on the first day of the fourth month of the current taxable year, and the balance of the estimated
tax shall be paid in installments as follows: 20% on the fifteenth day of the sixth month of the taxable year; 20% on the
fifteenth day of the ninth month of the taxable year; and 10% on the fifteenth day of the twelfth month of the taxable year.
(3) Additional taxes due on final return. -- Any additional tax due as computed in the final return required to be filed pursuant
to § 1904 of this title shall be paid with such final return.
(4) Tentative tax declarations and payments are not required for returns for taxable periods of less than 92 calendar days.
30 Del. C. 1953, § 1905; 51 Del. Laws, c. 298; 51 Del. Laws, c. 315, § 5; 60 Del. Laws, c. 15, § 1; 60 Del. Laws, c. 193, § 1; 71 Del. Laws, c. 217, § 7.;
§ 1906. Short title.
This chapter shall be entitled "Delaware Corporate Income Tax Law of 1958."
30 Del. C. 1953, § 1918; 51 Del. Laws, c. 298; 51 Del. Laws, c. 315, § 14; 68 Del. Laws, c. 187, §§ 12, 14.;
§ 1907. Time of taking effect of tax.
The tax shall be first effective with respect to income earned subsequent to December 31, 1957.
30 Del. C. 1953, § 1920; 51 Del. Laws, c. 298; 51 Del. Laws, c. 315, § 16; 68 Del. Laws, c. 187, §§ 12, 14.;
§ 1908. Historic rehabilitation.
Any entity taxable under this section is eligible for tax credits in accordance with the Historic Preservation Tax Credit
Act (Chapter 18 of this title), which credits shall be against taxes imposed under this chapter; provided, however, that all
claimed credits are accompanied by a Certificate of Completion issued by the State Historic Preservation Office certifying
that such credits have been earned in compliance with that act.
73 Del. Laws, c. 6, § 7.;
§ 1909. Withholding of income tax on sale or exchange of real estate by nonresident corporations [Effective Jan. 1, 2011]
(a) Definitions. --
(1) "Director" means the Director of the Division of Revenue or the Secretary of Finance of the State.
(2) "Nonresident corporation" means, for purposes of this section, a corporation that:
a. Is not organized under the laws of this State, and
b. Is not qualified or registered with the Secretary of State to do business in this State.
(3) "Recorder" means the official with the duty to record deeds and similar instruments.
(b) Estimated tax return; alternative forms. -- Every nonresident corporation that sells or exchanges Delaware real estate
shall file with the Recorder:
(1) A "Delaware Corporate Tentative Tax Return" due for the quarter in which the sale or exchange is settled, applying the
tax rate provided under § 1902 of this title to an estimate of the gain recognized on the sale or exchange, or
(2) An alternative form prepared by the Director to calculate income tax at the tax rate provided under § 1902 of this title,
applied to the difference between the total amount realized by the transferor and the net balance due at the time of settlement
of all recorded liens encumbering the real estate, or
(3) An alternative form prepared by the Director to declare under penalties of perjury that the sale or exchange of real estate
is exempt from recognition of capital gain with respect to the tax year of the sale or exchange, with a statement of the facts
and a citation to the provision or provisions of the Internal Revenue Code (Title 26, U.S.C.) relied upon.
(c) Due date of estimated tax return, payment. -- The return or form provided for in subsection (b) of this section, and the
estimated tax reported due, shall be remitted with the deed to the Recorder before the deed shall be recorded.
(d) Payment credited to transferor. -- The estimated tax remitted under subsection (c) of this section shall be deemed to
have been paid to the Director on behalf of the nonresident transferor and the nonresident transferor shall be credited for
purposes of § 1905 of this title as a payment made on the date remitted to the Recorder.
(e) Persons or entities not liable for payments. -- Neither the transferee, title insurance producer, title insurer, settlement
agent, closing attorney, lending institution, nor the real estate agent or broker in a transaction subject to this section
shall be liable for any amounts required to be collected and paid over to the Recorder or Director under this section.
(f) Tax not imposed; lawful collection of taxes not prohibited. -- This section does not:
(1) Impose any tax on a transferor or affect any liability of the transferor for any tax; or
(2) Prohibit the Director from collecting any taxes due from a transferor in any other manner authorized by law.
77 Del. Laws, c. 291, § 3.;
§§ 1910, 1911. Interests and additions to the tax in case of deficiencies; addition to the tax in case of nonpayment; refunds.
Repealed by 68 Del. Laws, c. 187, § 12, effective Jan. 1, 1992.
§ 1912. Penalties -- Late filing; failure to file returns; false and fraudulent return; failure to maintain records.
(a) Any person who wilfully fails, neglects or refuses to make a return or to pay the tax as prescribed in this chapter or
who shall refuse to permit the Secretary of Finance to examine the books, papers and records of any corporation liable to
pay tax under this chapter shall be fined not more than $3,000, or imprisoned not more than 6 months, or both. Such penalty
shall be in addition to any other penalties imposed by this chapter.
(b) Any person who wilfully makes a false and fraudulent return of net income, made taxable by this chapter, shall be fined
not more than $3,000, or imprisoned not more than 6 months, or both. Such penalty shall be in addition to any other penalties
imposed by this chapter.
(c) Any corporation which fails to maintain and keep, for a period of 3 years after any return is filed under this chapter,
such record or records of its business within this State for the period covered by such return, as may be required by the
Secretary of Finance, shall be fined $3,000. Such penalty shall be in addition to any other penalties imposed by this chapter.
(d) [Deleted.]
(e) The Superior Court shall have exclusive jurisdiction over all offenses under this chapter.
(f) [Deleted.]
30 Del. C. 1953, § 1913; 51 Del. Laws, c. 298; 51 Del. Laws, c. 315, § 11; 57 Del. Laws, c. 66; 57 Del. Laws, c. 741, § 8B; 59 Del. Laws, c. 113, § 5; 61 Del. Laws, c. 425, §§ 1-4; 63 Del. Laws, c. 293, §§ 3, 4; 67 Del. Laws, c. 40, § 15; 68 Del. Laws, c. 187, § 12.;
§§ 1913-1916. Court action to compel furnishing of information; lien of tax; collection of tax; administration by Secretary
of Finance.
Repealed by 68 Del. Laws, c. 187, § 12, effective Jan. 1, 1992.
§§ 1917, 1918. Short title; time of taking effect of tax.
