CHAPTER 10 - INHERITANCE TAX
AN ACT TO AMEND CHAPTER 6 OF THE REVISED CODE OF DELAWARE 1915, AS AMENDED BY CHAPTER 8 OF VOLUME 37, LAWS OF DELAWARE, RELATING TO INHERITANCE TAX.
Be it enacted by the Senate and House of Representatives of the State of Delaware in General Assembly met:
Section 1. That Chapter 6 of the Revised Code of Delaware 1915, as amended by Chapter 8 of Volume 37, Laws of Delaware, be and the same is hereby further amended, by striking out and repealing all of 148. Sec. 111., 149. Sec. 112., 150. Sec. 113., 151. Sec. 114., and 152. Sec. 115., and by inserting in lieu thereof the following new sections:
148. Sec. 111. Administration and Enforcement; Collection of Taxes; State Tax Department:
(a) The administration and enforcement of the provisions of this Act and the collection of the taxes imposed by this Act are hereby vested in the State Tax Department and the State Tax Commissioner as created and defined in Chapter 8 of Volume 36, Laws of Delaware.
(b) The State Tax Department shall:
(4) Prepare all necessary forms and blanks required in the administration and enforcement of the provisions of this Act and the collection of the taxes imposed by this Act.
(5) Pay daily to the State Treasurer, for the use of the State, all sums collected by the said Tax Department, except such sums as are retained in accordance with the provisions of this Act.
(6) The said State Tax Department shall be and hereby is authorized to retain out of the sums collected under this Act such amounts as it shall deem necessary to defray the expenses of administering and enforcing the duties prescribed by this Act, until such time as appropriation therefor is provided by the General Assembly.
149. Sec. 112. Valuation of Estate; Determination of Tax; Appeal:--The estate or interest of every person, body politic or corporate, in all real and personal property, taxable under the provisions of this Act, whether in remainder, reversion or otherwise, or in trust or otherwise, or conditioned upon the happening of a contingency or depending upon the exercise of a discretion, or subject to a power of appointment or otherwise, and all annuities taxable as aforesaid under the provisions of this Act, shall be valued by the State Tax Department, created by and existing under the provisions of Chapter 8 of Volume 36, Laws of Delaware, for the purpose of determining the amount of tax to be collected from such person, body politic or corporate under the provisions of this Act. When the property shall pass in trust or otherwise, to one or more persons, bodies politic or corporate, for a term of years or a greater estate or interest and with remainder or reversion to one or more other persons,, bodies politic, or corporate, the estate or interest of each beneficiary shall be valued separately according to recognized tables of mortality.
In estimating the value of any estate or interest in property to the beneficial enjoyment or possession whereof there are persons or corporations presently entitled thereto, no allowance shall be made in respect to any contingent encumbrance thereon nor in respect to any contingency upon the happening of which the estate or property, or some part thereof, or interest therein might be abridged, defeated or diminished.
Estates or interests in expectancy which are contingent or de-feasible shall be taxed at the rate which would obtain if such estate or interest fell into possession at the time of the determination of the tax.
Where any beneficiary has died or may hereafter die before receiving his or her share of the estate to which he or she is entitled and taxes on said share have not been assessed and paid, then such share shall be taxed only once and the tax shall be assessed on the property received from such share by each beneficiary thereof as if there had been no intermediate beneficiary.
It shall be the duty of the Register of Wills of the several Counties of the State upon the request of the State Tax Commissioner, promptly to render whatever assistance the State Tax Department may request in connection with the valuation of any estate or interest taxable under the provisions of this Act, and in every, case in which it is impossible to compute the present value of any interest in property subject to the tax imposed by this Act, the State Tax Department with the consent and approval of the State Tax Board, may effect such settlement of the tax as shall be deemed to be for the best interest of the State of Delaware and the payment of the sum so agreed upon shall be a full satisfaction of such tax.
The State Tax Department shall, within thirteen months after the death of the donor, grantor, devisor, or intestate, compute and determine all taxes assessable under this Act, provided, however, that in case an estate shall, before the expiration of said period become involved in litigation the determination of which may affect the computation of the tax imposed by this Act, the State Tax Department may suspend the computation and determination of taxes assessable under this Act on the disputed items, until the conclusion of the litigation. Immediately upon the determination of all taxes assessable under this Act, the State Tax Department shall give notice to the parties in interest, or to their attorneys of record, by posting the same in its office and by registered mail. Within thirty days after the tax has been determined, any person aggrieved by the determination may apply to the State Tax Board, said State Tax Board may make such corrections of the taxes as it may determine proper. The said State Tax Board and the State Tax Commissioner shall have power to hold hearings, summon witnesses and take testimony relative thereto.
In all cases arising under this act the Executor, Administator or Taxable, shall have the right to appeal to the State Tax Board from the decisions or rulings of the State Tax Commissioner. The State Tax Board may affirm, modify, or reverse such decisions or rulings of the State Tax Commissioner. Hearings may be informal but a record shall be made of the decisions reached. If the informal hearings shall prove unsatisfactory to the complainant, or to the State Tax Commissioner, said complainant or the State Tax Commissioner may, within 30 days ask for a formal hearing for the completion of the record and may, within 30 days after notice of a decision upon such formal hearing, appeal to the Superior Court from the determination of the State Tax Board as to the amount of taxes to be paid under the provisions of this Act. The Superior Court for the several Counties of the State is hereby vested with jurisdiction to hear and determine all such appeals from the determination of the State Tax Board and may by proper rulings prescribe the procedure to be followed in such appeals. Every such appeal shall be determined by the court without the aid of a jury. In any such appeal the court shall determine what part of the costs shall be paid by the State and what part shall be paid by the executor, administrator or taxable as to it may appear just and equitable. It shall be the duty of the State Tax Commissioner to notify the Attorney General whenever such appeal shall be taken by the executor, administrator or taxable and it shall be the duty of the Attorney General, or one of his deputies, to represent the State in the hearings on the appeal.
In determining the value of any estate or interest taxable under the provisions of this Act, the State Tax Department shall make no deduction therefrom nor reduction thereof by reason or on account of the payment (or liability for payment) of any Delaware inheritance, legacy or succession tax, or of any Delaware estate tax, or of any estate, inheritance, legacy or succession tax of the United States or of any State or jurisdiction outside of the State of Delaware.
The Register of Wills referred to in this Act shall be the Register of Wills of the County where letters testamentary or of administration have been granted on the estate of the donor, grantor, devisor or intestate from whom the property aforesaid, shall have passed as set forth in Section 109 of this Act; but if no such letters have been granted, then the said Register shall be the Register of Wills of the County in which such property is or is situated.
150. Sec. 113. Collection and Payment of Taxes; Inventory of Goods and Chattels; List of Debts and Credits; Description of Real Estate; Receipt for Taxes; Refund of Taxes Erroneously Paid: --All taxes imposed by this Act shall be due and payable within thirty days after the amount of tax has been finally determined in accordance with the provisions of this Act and every such tax shall be and remain a lien upon the property subject to the tax until paid. From the due date, and until paid, said taxes shall bear interest at the rate of four per cent per annum.
Any administrator, executor or trustee having in charge or trust any legacies or property for distribution subject to the said tax shall deduct the tax therefrom, or if the legacy or property be not money he shall collect a tax thereon upon the appraised value thereof from the legatee or person entitled to such property, and he shall not deliver or be compelled to deliver any specific legacy or property subject to tax to any person until he shall have collected the tax thereon; and whenever any such legacy shall be charged upon or payable out of real estate, the heir, or devisee, before paying the same, shall deduct said tax therefrom and pay the same to the executor, administrator or trustee, and the same shall remain a charge on such real estate until paid, and the payment thereof shall be enforced by the executor, administrator or trustee in the same manner that the said payment of said legacies might be enforced; if, however, such legacy be given in money to any person for a limited period, the executor, administrator or trustee shall retain the tax upon the whole amount, but if it be not in money he shall make application to the State Tax Department to make an apportionment if the case required is of the sum to be paid into his hands by such legatees and for such further order relative thereto as the case may require. Where a tax is imposed on an estate for life or for a term of years, or to terminate on the expiration of a certain period, and on any remainder or reversionary interest or interests, the tax on such estate or interest as between the executor, trustee, tenant for life or for years, remainderman or reversioner and other beneficiaries, shall be charged to the corpus of the property in which such estate or estates exist, unless otherwise provided for by the testator or transferor, and shall be payable at once in the same manner and within the same time as if the estate or interest had vested in possession.
All executors, administrators and trustees shall be personally liable for the payment of taxes and where proceedings for collection of taxes assessed be had, said executors, administrators and trustees shall be personally liable for the expenses, costs and fees of collection. They shall have full power to sell so much of the property of the decedent as will enable them to pay said tax in the same manner as they may be enabled to do by law, for the payment of debts of their testators and intestates.
All taxes collected by any executor or administrator as aforesaid shall be forthwith paid over to the State Tax Department.
It shall be the duty of every executor or administrator within three months after the granting of letters testamentary, or of administration, to file in the office of the Register of Wills of the County in which said letters have been granted, and also with the State Tax Commissioner, an inventory of all goods and chattels, a list of all debts and credits, and a Statement in writing setting forth a general description of every parcel of real estate in this State of which the decedent died seized, and the name of each party entitled to any estate or interest in any parcel of said real estate, and relationship, if any, of said party, to the decedent. Such Inventory and List and Statement shall be supported by the oath or affirmation of said executor or administrator that the facts therein, contained are true according to his best information and belief. Every such Inventory, List and Statement shall be recorded by the Register of Wills in a separate book to be kept by him for that purpose which shall be known as the "Inheritance and Succession Docket," and which shall be duly indexed. Whenever any parcel of real estate or any estate or interest therein described in the statement of the executor or administrator aforesaid, shall be subject to tax under the provisions of this Act, the Register of Wills shall make an entry in the docket aforesaid that said real estate is subject to tax and in the event of an appeal to the Superior Court as aforesaid, shall further note in said docket the fact of said appeal. When any tax as aforesaid shall be paid and discharged, the said Register shall make a note thereof in the said docket, upon notice from the State Tax Department of said payment.
It shall be the duty of the State Tax Department from time to time to examine every such docket as aforesaid, and to notify the Attorney General of any failure on the part of any Register of Wills or of any executor or administrator to perform the duties imposed upon them by this Act. The Attorney General shall in case of such failure take proper proceedings against the party or parties delinquent.
The Register of Wills on the first day of each month shall, without fee, send to the State Tax Department on forms furnished by the said State Tax Department, a list of wills probated and administrators appointed together with the name of the deceased and on request from the State Tax Department shall furnish such other information as may be of record in said Register's office concerning such estate.
If for any cause there should be no executor or administrator to receive the tax imposed under the provisions of this Act the party liable for said tax shall have the right to pay the same direct to the State Tax Department and such payment shall operate as a discharge of said tax.
If, upon the decease of a person leaving an estate passing in whole or in part to legatees or heirs liable to the taxes imposed by this Act, a will disposing of such estate is not offered for probate within three months, and application for administrations is not made within three months from the date of such decease, the State Tax Department may apply to the Register of Wills for the appointment of an administrator of such estate.
The State Tax Department receiving any tax under the provisions of this Act shall give the person paying the same duplicate receipts therefor, one of which shall be forwarded by the person so paying as aforesaid to the State Treasurer, to be by him preserved, and either of said duplicate receipts shall be evidence in suits upon the bond of said State Tax Commissioner to recover the tax so by him received.
When any amount of tax imposed under this Act shall have been paid erroneously it shall be lawful for the State Treasurer, on satisfactory proof rendered to him of said erroneous payment, and upon the recommendation of the State Tax Department, to refund and pay to the executor, administrator or trustee, person or persons who have paid any such tax in error, the amount of such tax so paid, provided that all applications for the repayment of said tax shall be made within one year from the date of said payment.
It shall be the duty of the Attorney General to give counsel, advice and legal assistance to the Tax Department and to assist in the prosecution of violations of this Act when such counsel, advice or assistance is requested by the Tax Department. The additional Deputy Attorney General, authorized to be appointed and appointed by the Attorney General, in accordance with Section 22 of Chapter 8 of Volume 36, Laws of Delaware, in addition to his duties in connection therewith, shall also render advice and assistance to the Tax Department in carrying out and enforcing the provisions of this Act when called upon by the said Department, and shall receive, as additional compensation for his services to the said Department in connection with this Act, a salary of Two Thousand Dollars ($2000.00) per annum payable monthly from the expense fund or appropriation mentioned in paragraph (5) of 148. Sec. 111. of Section 1 of this Act, which salary shall be in addition to his compensation for services to said Department as provided by Section 22 of Chapter 8 of Volume 36, Laws of Delaware.
151. Sec. 114. Liability on Executor's or Administrator's Bond:--The bond of an executor or administrator shall be liable for all money he may receive for taxes, or for the proceeds of the sale of any estate or interest received by him under this Ad, and if any executor or administrator shall fail to perform any of the duties imposed upon him under the provisions of this Act, the Register of Wills granting the letters of administration shall, upon request of the State Tax Department, revoke the same, and his bond shall be liable, and the same proceedings shall be had as if his administration had been revoked for other cause. The powers and duties of an administrator de bonis non or de bonis non with the will annexed, shall be the same under this Ad as an executor or administrator, and he shall be subject to the same liabilities. No final settlement of the account of any executor or administrator shall be accepted or allowed by any Register of Wills until such Register of Wills shall have ascertained that all taxes imposed under the provisions of this Ad with interest, if any is due, have been paid; and a certificate of the State Tax Department filed with the Register of Wills shall be proof of such payment.
152. Sec. 115. Return of Tax Collected; Payment to State Treasurer; Liability Upon Bond; Removal From Office, When:--It shall be the duty of the State Tax Department to make return daily to the State Treasurer of all sums of money received by said State Tax Department under the provisions of this Ad, except such sums as are retained in accordance with the provisions of this Act, and to pay over to said State Treasurer, for the use of the State, the amounts so by said Tax Department received, at the time of making such returns.
The official bond of every Register of Wills of this State, shall he deemed and held to embrace and include the faithful performance by such Register, of all and every the duties imposed upon such Register by this Act; and the official bond of the State Tax Commissioner shall be deemed and held to embrace and include the faithful performance by the said State Tax Commissioner of all and every the duties imposed by this Ad.
The failure or neglect of any officer of the State, whose duty it shall be to administer the provisions of this Ad, faithfully to execute the provisions hereof, is hereby declared to be, a misfeasante in office and, upon conviction thereof in any court of competent jurisdiction, such officer shall be deemed to have forfeited his office.
152 A. Sec. 115 A. Savings Clauses; Repeals; Retroactive Provisions; Unconstitutionality or Invalidity:-148 Sec. 111 to 152, Sec. 115, of Chapter 6 of the Revised Code of Delaware 1915, both inclusive, as amended by Chapter 7 of Volume 29, Laws of Delaware, as amended by Chapter 7 of Volume 35, Laws of Delaware, as amended by Chapter 8 of Volume 37, Laws of Delaware, shall be and continue in full force and effect as to all taxes, assessments, proceedings, suits and matters arising out of or in connection with estates and interests taxable thereunder, and shall so continue until such time as all of said taxes, assessments, proceedings, suits or matters shall have been finally determined, collected, and disposed of, at which time said 148. Section 111 to 152, Sec. 115, both inclusive, as amended, shall be repealed; provided, that the State Tax Department shall, immediately upon the approval of this Act, have jurisdiction of, and take into its control, for the purposes of further administration and final settlement, all taxes, taxable affairs, assessments, proceedings, suits, and matters now pending, and subject to existing laws of the State, which have heretofore been under the jurisdiction and control of the Registers of Wills of the several counties of the State; and said Registers of Wills are hereby directed to deliver to the State Tax Department, on demand, a full and complete itemized statement of the same. Any Register of Wills refusing or neglecting to make up and deliver such itemized statement within sixty days after demand therefor by the State Tax Department, shall be deemed guilty of a misdemeanor and upon conviction thereof by any Court of competent jurisdiction, shall be liable to a fine not exceeding One Thousand Dollars ($1,000.00), or to imprisonment, for a term not exceeding one year, or to both fine and imprisonment in the discretion of the Court. Nothing herein contained shall be deemed to relieve the said Registers of Wills from liability under the respective bonds, for any responsibility that may have been heretofore incurred.
All acts or parts of acts inconsistent with the provisions of this Act shall be and the same are hereby repealed.
The exemption provided in this Act shall be deemed to be retroactive so far as concerns the property and estates and interest therein, of decedents dying after the sixth day of May, A. D. 1929, except where the inheritance, transfer or succession taxes thereon were paid and discharged prior to the approval of this Act.
If any clause, sentence, paragraph or part of this Act shall, for any reason, be adjudged by any Court of competent jurisdiction, to be invalid, such judgment shall not affect, impair or invalidate the remainder of this Act, but shall be confined in its operation to the clause, sentence, paragraph or part thereof directly involved in the controversy in which such judgment shall have been rendered.
No caption of any SECTION or set of SECTIONS of this Act shall in any way affect the interpretations of this Act, or any part thereof.
Approved April 12, 1935.