CHAPTER 5 - DOMICILIARY DEATH TAXES
AN ACT TO PROVIDE FOR THE SETTLEMENT OF DISPUTES AMONG STATES WITH RESPECT TO DOMICILIARY DEATH TAXES.
Be it enacted by the Senate and House of Representatives of the State of Delaware in General Assembly met:
Section 1. Definitions:—As used in this act:
(a) The term "executor" means any executor of the will or administrator of the estate of a decedent, except an ancillary administrator;
(b) The term "Taxing official" means the State Tax Commissioner in this state and the officer or body in any other reciprocal state designated in the statute of such state substantially similar to this act;
(c) The term "death tax" means any tax levied by a state on account of the transfer of or shifting of economic benefits in property at death, or in contemplation thereof, or intended to take effect in possession or enjoyment at or after death, whether denominated an "inheritance tax", "transfer tax", "succession tax", "estate tax", "death duty", "death dues", or otherwise;
(d) The term "interested person" means any person who may be entitled to receive or who has received any property or interest which may be required to be considered in computing the death tax of any state involved;
(e) The term "state" means any state, territory, or possession of the United States, and the District of Columbia.
Section 2. Election:—Where this state and one or more other states each claims that it was the domicile of a decedent at the time of his death, and no judicial determination of domicile for death tax purposes has been made in any of such states, any executor, or the taxing official of any such state, may elect to invoke the provisions of this act. Such election shall be evidenced by the sending of a notice by registered mail, receipt requested, to the taxing officials of each such state and to each executor, ancillary administrator and interested person. Any executor may reject such election by sending a notice by registered mail, receipt requested, to the taxing officials involved and to all other executors within forty days after the receipt of such notice of election. If such election be rejected, no further proceedings shall be had under this act. If such election be not rejected, the dispute as to the death taxes shall be determined solely as hereinafter provided, and any proceedings that may have been theretofore taken in this state to determine or assess such death taxes in the courts or otherwise shall be annulled and of no effect.
Section 3. Compromise:—In any case in which an election is made as provided in section two hereof and not rejected, the State Tax Commissioner may enter into a written agreement with the other taxing officials involved and with the executors, to accept a certain sum in full payment of any death tax, together with interest and penalties, that may be due this state. Such agreement shall not be effective unless approved by the State Tax Board. If an agreement cannot be reached and the arbitration proceeding specified in section four is commenced, and thereafter an agreement is arrived at, a written agreement may be entered into at any time before such proceeding is concluded, notwithstanding the commencement of such proceeding. Upon the filing of such agreement or duplicate thereof with the authority which would have jurisdiction or assess the death tax of this state if the decedent died domiciled in this state, an assessment shall be made as therein provided and such assessment shall finally and conclusively fix and determine the amount of death tax due this state.
Section 4. Board of Arbitration:—If in any such case it shall appear that an agreement cannot be reached as provided in the foregoing section, or if one year shall have elapsed from the date of the election, the domicile of the decedent at the time of his death solely for death tax purposes shall be determined as follows:
(a) Where only this State and one other state are involved, the State Tax Commissioner with the approval of the State Tax Board and the taxing official of such other state shall each appoint a member of a board of arbitration, and the members so appointed shall select the third member of the board. If this state and more than one other state are involved, the taxing officials thereof shall agree upon the authorities charged with the duty of administering death tax laws in three states not involved, each of which shall appoint a member of the board. The members of the board shall elect a chairman.
(b) Such board shall hold hearings at such places as are deemed necessary, upon reasonable notice to the executors, ancillary administrators, all interested persons, and the taxing officials of the states involved, all of whom shall be entitled to be heard.
(c) Such board shall have power to administer oaths, take testimony, subpoena and require the attendance of witnesses and the production of books, papers and documents and issue commissions to take testimony. Subpoenas may be issued by any member of the board. Failure to obey a subpoena may be punished by a judge or justice of any court of record in the same manner as if the subpoena had been issued by such judge or justice or by the court in which such judge or justice functions.
(d) Such board shall apply, whenever practicable, the rules of evidence which prevail in federal courts under the federal rules of civil procedure at the time of the hearing.
(e) Such board shall, by majority vote, determine the domicile of the decedent at the time of his death. Such determination shall be final and conclusive, and shall bind this state and all of its judicial and administrative officials on all questions concerning the domicile of the decedent for death tax purposes.
(f) The reasonable compensation and expenses of the members of the board and employees thereof shall be agreed upon among such members, the taxing officials of the states involved, and the executors. In the event an agreement cannot be reached, such compensation and expenses shall be determined by such taxing officials, and if they cannot agree, by the appropriate probate court of the state determined to be the domicile. Such amount shall be borne by the estate and shall be deemed an administration expense.
(g) The determination of such board and the record of its proceeding shall be filed with the authority having jurisdiction to assess the death tax in the state determined to be the domicile of the decedent and with the authorities which would have had jurisdiction to assess the death tax in each of the other states involved if the decedent had been found to be domiciled therein.
Section 5. In any case where it is determined by the board of arbitration that decedent died domiciled in this state, penalties and interest for non-payment of the tax, between the date of the election and the final determination of the board shall not exceed four per centum per annum.
Section 6. The provisions of this act shall apply only to cases in which each of the states involved has a law substantially similar to this act.
Section 7. If the provisions of this act conflict with any other law of this state, this act shall control.
Section 8. This act shall take effect immediately, and shall apply to the settlement of disputes among states with respect to death taxes without regard to whether the decedent died before or after the enactment of this act.
Approved May 6, 1941.