AN ACT TO AMEND CHAPTER 6 OF THE REVISED CODE OF DELAWARE (1935) BY PROVIDING FOR A WAR EMERGENCY TAX ON GROSS INCOME, FOR THE CALENDAR YEARS 1943 AND 1944 AND TO PROVIDE FOR THE ASCERTAINMENT, ASSESSMENT AND COLLECTION THEREOF AND TO PROVIDE PENALTIES FOR THE VIOLATION OF THE TERMS OF THIS ACT.
Be it enacted by the Senate and House of Representatives of the State of Delaware in General Assembly met:
Section 1. That Chapter 6, Revised Code of Delaware (1935) be and the same is hereby amended by adding and inserting after 246 Section 212, the following new articles and sections :
246 (a) Section 212 (a). There shall be levied, assessed, collected and paid for each of the two taxable years beginning after December 31, 1942, being the calendar years 1943 and 1944, to the State Tax Department for the use of the State a war emergency tax of one per centum of the gross income received, accrued or credited subject to withdrawal by every taxable during each of the calendar years 1943 and 1944 as hereinafter prescribed. Every taxable shall be entitled to a credit against gross income of One Hundred Fifty-six Dollars ($156.00) for each quarterly period, but not in excess of Six Hundred Twenty-four Dollars ($624.00) for any one calendar year.
246 (b) Section 212 (b). The word taxable shall include:
(1) Every natural person who is a resident of the State of Delaware or who has been a resident of the State of Delaware at any time during a taxable year.
(2) Every natural person who is a non-resident of the State of Delaware and who receives gross income for personal services performed and/or as profits derived from professions, vocations, business, trade or commerce conducted in and/or as rentals derived from the ownership of real property in the State of Delaware. Every taxable as defined in this paragraph shall be allowed the benefit of deductions provided in 246 (e) Section 212 (e), to the extent that such deductions are incurred in connection with the receipt of profits derived from professions, vocations, business, trade or commerce conducted in and/or the receipt of rentals derived from the ownership of real property in the State of Delaware.
(3) Every fiduciary acting for or in the interests of a natural person who is a resident of the State of Delaware.
(4) Every fiduciary holding income for future distribution under the terms of a will or trust created by a resident of Delaware acting for or in the interests of unborn or unascertained persons or persons with contingent interests.
The term "fiduciary" shall include a receiver, guardian, trustee, executor and administrator.
246 (c) Section 212 (c). The term "gross income" shall include the aggregate of all amounts received, accrued, paid to or credited subject to withdrawal as compensation for personal services, dividends, interest, profits derived from profession, vocations, business, trade, commerce and rentals, and including profits in an unincorporated association of persons, syndicate, joint venture or co-partnership whether such profits have been divided or otherwise, less the aggregate of the deductions provided in 246 (e) Section 212 (e).
The word "dividends" means any distribution made by a corporation, joint stock company or association out of its earnings or profits paid to or subject to withdrawal by its shareholders during the taxable year, whether in cash or property. Every distribution shall be deemed to be made out of earnings or profits to the extent thereof, and from the most recently accumulated earnings or profits.
Gross income shall be accounted "actually received into possession" when cash, check, scrip certificate or other evidence of ownership has been received by the owner or by his agent, or representative, or by a fiduciary.
Gross income shall be accounted "credited subject to withdrawal" when the taxable credited, or his agent, representative or fiduciary has the right or option to make withdrawal.
The term "compensation for personal services" means all remuneration for services performed by an employe including the cash value of all remuneration paid in any medium other than cash, and shall include salaries, wages, bonuses, pensions, fees and commissions.
246 (d) Section 212 (d). The following shall not be included as gross income within the meaning of this article :
(1) The proceeds of life insurance policies paid upon the death of the insured to any taxable.
(2) The amount received by the insured as a return of premium or premiums paid by him under life insurance, endowment, or annuity contracts, either during the term or at the maturity of the term mentioned in the contract or upon the surrender of the contract.
(3) The value of property acquired by gift, bequest, devise or inheritance but the income received from such property after its acquisition shall be included in taxable income.
(4) Interest upon the obligations of the State of Delaware or any political subdivision thereof or upon the obligations of the District of Columbia, of the United States or of its possessions.
(1) Gain from the sale or exchange of capital assets.
. (6) The amount received as alimony or support from a
person who has paid tax thereon under this article.
(7) Any amounts paid to injured employes or to the dependents of deceased employes under the terms of "The Delaware Workmen's Compensation Law."
(8) Amounts received through accident or health insurance as compensation for personal injuries or sickness, and the amount of any damages received, whether by suit or agreement, on account of personal injuries or sickness.
246 (e) Section 212 (e). In computing gross income the following deductions if incurred and actually paid or accrued during the calendar year by the taxable in carrying on any business operated for profit or in connection with real estate held for income producing purposes shall be allowed to reduce the gross income:
1. The ordinary and necessary expenses.
4. Reasonable allowance for depreciation of property.
RETURNS TO TAX DEPARTMENT AND PAYMENT OF TAX
246 (f) Section 212 (1). I. For the quarterly period from January 1 to March 31, inclusive, of each taxable year and for each quarterly period thereafter, respectively, April 1 to June 30, July 1 to September 30 and October 1 to December 31, inclusive, of each taxable year, every withholding agent shall deduct, withhold and pay over to the State Tax Department, on or before the last day of the month following the close of each quarterly period, one per cent of the compensation for personal services of any taxable; provided such compensation exceeds $12.00 in any one week and/or $156.00 in any quarterly period. The total amount of gross income of any taxable during any one calendar year exempt from the withholding provision of this act under the last preceding sentence shall reduce pro tanto the credit against gross income of such taxable provided for in 246 (a) Section 212 (a). Payments of tax shall be accompanied by returns on forms prescribed by the State Tax Department.
II. Every taxable having gross income of any kind or form on which return is not required to be made or tax to be withheld by any withholding agent shall make a return or returns upon the printed form or forms provided by the Tax Department and may elect (1) to file returns in the manner and at the time prescribed in the next preceding paragraph for withholding agent, except that the return shall include the entire gross income for the respective quarterly period, in which case the taxable elects to act as his own withholding agent, or (2) to estimate the amount of gross income for each taxable year. In no case shall the estimated amount of gross income reported under this election be less than the total amount of gross income received or accrued during the previous calendar year. If election is made to employ the estimated basis as defined in this paragraph, a return shall be filed on or before April 30 for each taxable year and the tax shown thereon shall be paid in full on or before April 30 of the respective year * or as follows:
One-fourth of the amount at the time fixed for filing the return; one-fourth of the amount on the last day of the third month after the time fixed for filing the return; one-fourth of the amount on the last day of the sixth month after the time fixed for filing the return ; and one-fourth of the amount on the last day of the ninth month after the time fixed for filing the return.
III. Any estimate made under this Section shall be subject to revision when it is found by return filed for the same taxable year under the provisions of Article XII, Chapter 6 of the Revised Code of Delaware, 1935, as amended, that the gross income reported for the purposes of this Act was erroneously, illegally or improperly reported.
IV. No taxable shall be required to file any return if his entire gross income was derived in any quarterly period from sources for which the tax has been withheld under Paragraph I.
of this Section and has been deducted and paid to the State Tax Department as prescribed by this Act.
V. Except in cases coming within the next preceding paragraph, being Paragraph IV, gross income upon which any tax is required to be withheld under the provisions of this Section shall be included in the return of the person entitled to receive such gross income, bid any amount of tax so withheld shall be credited against the amount of tax as computed in such return. Any amount withheld by such withholding agent and paid by him to the Tax Department which is in excess of the total amount of tax, interest and penalties due from the taxable against whom such withholding has been made, shall be refunded to the taxable, in the same manner as provided in 159. Section 125, Revised Code of Delaware, 1935, as amended.
246 (g) Section 212 (g). The term "withholding agent" means and includes any individual, receiver, fiduciary, trustee, executor, administrator, institution, bank, firm, partnership, society, club, fraternity, sorority, lodge, corporation, municipal corporation or any other political subdivision of the State engaged in private or proprietory activities or business, estate, trust, or any other group or combination acting as a unit, making payment of salaries, wages, pensions, fees, commissions, emoluments and other fixed or determinable income of whatever kind and in whatever form paid or credited, to any taxable for personal services, and includes any taxable who shall elect to pay the tax provided in this Act on gross income on the quarterly period rather than on the estimated basis.
246 (h) Section *112 (h). Every taxable and every withholding agent, executor, administrator or assignee or other person who pays any amount due to or by any taxable, or by any withholding agent, or by any person for whom he acts before he satisfies and pays the taxes due from such person or estate, shall be answerable to the State of Delaware in his own person and estate for the tax so due to the State of Delaware or for so much thereof as remain due and unpaid and every such withholding agent is hereby idemnified against the claims and demands of
*So enrolled (212)
any individual for the amount of any payments made in accordance with the provisions of this Section.
246 (i) Section *112 (i). Every withholding agent required to deduct, withhold and pay over to the State Tax Department tax under the provisions of this Act who fails to file any return required and/or to pay and/or to withhold and pay any tax to the State Tax Department shall be guilty of a misdemeanor and shall, upon conviction, be fined not to exceed $100.00 or be imprisoned not to exceed six months, or both, at the discretion of the Court.
246 (j) Section *112 (j). The said Tax Department shall be and is hereby 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.
246 (k) Section *112 (k). The provisions of 151. Section 117 and all sections thereafter up to and including 170. Section 136 of the Revised Code of Delaware, 1935, as amended, in so far as they are not inconflict with this Act, for the purposes of procedure relating to the administration, enforcement, assessment and collection of the tax, penalties, and interest under this Act by the State Tax Department, shall be deemed to be made applicable and in full force and effect for the purpose of this Act.
246 (1) Section *112 (1). Constitutional Provision.--The provisions of this Act are severable, and if any of its provisions shall be held to be unconstitutional, the decision of the court shall not affect or impair any of the remaining provisions of this Act. It is hereby declared to be the legislative intent that this Act would have been adopted had such unconstitutional provisions not been included herein.
246 (m) Section *112 (m). All acts or parts of act inconsistent with this act are hereby repealed to the extent of such inconsistency only.