AN ACT TO AMEND SECTION 375, SUBCHAPTER V, CHAPTER 3, TITLE 30, DELAWARE CODE, REQUIRING THE FURNISHING OF SURETY BONDS FOR PAYMENT OF TAXES BY NONRESIDENT PERSONS OR FIRMS DOING BUSINESS IN DELAWARE.
Be it enacted by the General Assembly of the State of Delaware:
Section 1. Section 375, Subchapter V, Chapter 3, Title 30, Delaware Code, is hereby amended to read as follows:
§ 375. Furnishing of bonds by foreign persons or firms
(a) Any nonresident person or firm, whether incorporated or not, either doing business in this State so as to be subject to Delaware income tax or State Occupational or Business Licenses, or having employees or agents performing labor or services in this State so as to subject such employees or agents to Delaware income tax and such employer to Delaware income tax withholdings and to the Delaware Unemployment Compensation Law shall file a surety bond with the State Tax Department, payable to the State of Delaware, to guarantee the payment of State income taxes, State Occupational or Business Licenses, unemployment compensation contributions and income taxes withheld from wages of employees, together with any penalties and interest thereon, the form and contents of such bond and the amount thereof to be approved and fixed by the State Tax Department in such amount as shall be sufficient to protect the tax revenues of the State, except as otherwise provided below.
(1) The amount of the surety bond to be required of any nonresident engaged in construction contracting in this State as a contractor or subcontractor shall be as follows: Three per cent of the contract or subcontract price on all contracts of $50,000 or more, or three per cent of contractor's or subcontractor's estimated cost-and-profit under a cost-plus contract of $50,000 or more. When the aggregate of two or more contracts in one calendar year is $50,000 or more, the amount of the bond or bonds shall be three per cent of the aggregate amount of such contracts.
(2) Such surety bond shall be filed within 15 days after the commencement of business in this State by said nonresident; except that as to a nonresident engaged in construction contracting, such bond shall be filed within 15 days after construction is begun in this State by such contractor or subcontractor on any contract, the price of which is $50,000 or more (or the estimated cost-and-profit of which is $50,000 or more), or within 15 days after construction is begun on any contract for less than $50,000 when the amount of such contract, when aggregated with any other contracts on which construction was begun in the same calendar year, equals or exceeds $50,000.
(3) If the Department concludes that no bond is necessary to protect the tax revenue of this State, the requirements of this section may be waived by the State Tax Commissioner, or his designated departmental representative. Any bond issued hereunder shall remain in force until the liability thereunder is released by the Commissioner or his designated departmental representative.
(b) Any person or firm subject to the provisions of this section shall notify the Department of the termination of business within this State within 20 days after such termination, or as to a construction contractor or subcontractor, within 20 days after the completion of every such construction project in this State.
(c) Any person or firm failing or refusing to comply with the provisions of this section shall be fined not more than $5,000 for each such offense.
(d) In the case of any nonresident person or firm doing business in this State on the effective date of this Act for which a bond shall be required to be filed hereunder, such bond shall be filed within 30 days of the effective date of this Act.
Approved July 1, 1969.