CHAPTER 8 - INHERITANCE TAX

AN ACT TO AMEND CHAPTER 6 OF THE REVISED CODE OF THE STATE OF DELAWARE OF 1935 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. * *

Section 2. That Section 102 of said Chapter 6 of the Revised Code of Delaware, being Code Section 136 of said Code, be and the same is hereby amended by striking out all of paragraphs in Class B. of Section 102 and substituting in lieu thereof the following paragraphs:

Section 102--Class B. Where the property or any interest or estate therein passes to or for the use of a parent, grandparent, child by birth, wife or widow of a son or the husband or widower of a daughter, a child by legal adoption, or lineal descendant of the testator, intestate grantor, donor or settlor (hereinafter called the decedent), the tax on such property, interest or estate then shall be at the following rates:

On that part of its value exceeding Three Thousand Dollars and not exceeding Thirty Thousand Dollars, one per cent;

On that part of its value exceeding Thirty Thousand Dollars and not exceeding Fifty Thousand Dollars, two per cent;

On that part of its value exceeding Fifty Thousand Dollars and not exceeding One Hundred Thousand Dollars, three per cent;

On that part of its value exceeding One Hundred Thousand Dollars, four per cent;

Section 3. That Section 102 of said Chapter 6 of the Revised Code of Delaware, being Code Section 136 of said Code be and the same is hereby amended by striking out all of the paragraphs in Class C. of Section 102 and substituting in lieu thereof the following paragraphs:

Section 102--Class C. Where the property or any interest or estate therein passes to or for the use of (1) a brother, or sister, either of the whole or half blood, of the decedent or of any brother or sister of the decedent's parent or first cousins of the decedent, or (2) a lineal descendant of any such brother or sister of the whole or half blood of the decedent, the tax shall be at the following rates:

On that part of its value exceeding One Thousand Dollars and not exceeding Twenty-five Thousand Dollars, two per cent;

On that part of its value exceeding Twenty-five Thousand Dollars and not exceeding Fifty Thousand Dollars, three per cent;

On that part of its value exceeding Fifty Thousand Dollars and not exceeding One Hundred Thousand Dollars, four per cent,

On that part of its value exceeding One Hundred Thousand Dollars, five per cent;

Section 4. That Section 102 of said Chapter 6 of the Revised Code of Delaware, being Code Section 136 of said Code be and the same is hereby amended by striking out all of the paragraphs in Class D. of Section 102 and substituting in lieu thereof the following paragraph:

Section 102--Class D. In case of property or any interest or estate therein passing to or for the use of any person, not described in Class A, Class B or Class C of this Section, the tax shall be at the following rates:

On that part of its value exceeding Twenty-five Thousand Dollars and not exceeding Fifty Thousand Dollars, six per cent;

On that part of its value exceeding Fifty Thousand Dollars and not exceeding One Hundred Thousand Dollars, seven per cent;

On that part of its value exceeding One Hundred Thousand Dollars, eight per cent.

Section 5. That Section 102 of said Chapter 6 of the Revised Code of Delaware, being Code Section 136 of said Code be and the same is hereby amended by inserting at the end of Section 102 the following:

Section 102. In determining the value of the net estate for distribution the deductions allowable from the fair market value of the estate on date of decedent's death shall be as follows:

(1) Funeral and burial expenses.

(2) Debts of decedent owing at the date of death.

(3) Mortgages unpaid on date of death.

(4) Commission of Executors and Administrators allowed by Register of Wills.

(5) Costs of administration including Attorney's fees but not including losses on sales of assets.

Section 6. That Section 104 of said Chapter 6 of the Revised Code of Delaware, being Code Section 138 of said Code be and the same is hereby amended by striking out the third paragraph of Section 104 and substituting in lieu thereof the following:

Section 104. Estates or interest in expectancy which are contingent or defeasible shall be taxed at the highest rate which on the happening of any of the contingencies or conditions named in the will would be possible under the provisions of this Act.

If the property so taxed shall ultimately vest in persons taxable at a lower rate or in a person or a corporation exempt from taxation by this Act, upon application to the State Tax Department by such beneficiary for refund of any excess tax that Department, after ascertaining the correctness of the claim, shall recommend payment by the State Treasurer and it shall be lawful for him to pay the amount. Interest on such refunds shall be at the rate of four per cent per annum.

Section 7. That Section 104 of said Chapter 6 of the Revised Code of Delaware, being Code Section 138 of said Code be and the same is hereby amended by striking out the fourth paragraph of Section 104 and substituting in lieu thereof the following:

Section 104. 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 basis of the relationship of the ultimate beneficiary to the first decedent.

Section 8. That Section 105 of said Chapter 6 of the Revised Code of Delaware, being Code Section 139 of said Code be and the same is hereby amended by striking out the last sentence in the first paragraph of Section 105 and substituting in lieu thereof the following:

Section 105. From fourteen months after date of death, and until paid, said taxes shall bear interest at the rate of four per cent per annum. Where an estate becomes involved in litigation referred to in paragraph 6, Sec. 104, no interest shall be charged until one month after adjudication.

Section 9. That Section 105 of said Chapter 6 of the Revised Code of Delaware, being Code Section 139 of said Code, be and the same is hereby amended by inserting between the fifth and sixth paragraphs the following:

Section 105. Any executor or administrator who shall fail to file the aforementioned Inventory, List and Statement with the Register of Wills and with the State Tax Commissioner within three months after the granting of letters testamentary or of administration shall be subject to a penalty of $1.00 per day for each day delinquent. This penalty shall apply to all estates delinquent as of the effective date of this amendment but shall not apply until one month after notice by the State Tax Department of such delinquency.

Section 10. That Section 106 of said Chapter 6 of the Revised Code of Delaware, being Code Section 140 of said Code, be and the same is hereby amended by inserting at the end of the paragraph the following:

Section 106. No commission shall be allowed by the Register of Wills to any executor or administrator who has not complied with the requirements of Article 10 of Chapter 6 of the Revised Code of Delaware, nor on estates delinquent prior to passage of this Act unless such requirements are complied with on or before January 1, 1938. This penalty shall not apply until one month after notice by the State Tax Department of such delinquency.

Section 11. All Acts or parts of Acts inconsistent with the provisions of this Act are hereby repealed to the extent of such inconsistency only.

Approved May 19, 1937.