CHAPTER 301

FORMERLY HOUSE BILL NO. 544

AS AMENDED BY

HOUSE AMENDMENT NO. 1

AN ACT TO AMEND TITLE 30, DELAWARE CODE, BY CREATING A NEW CHAPTER RELATING TO TAXES ON CERTAIN PUBLIC UTILITIES.

Be it enacted by the General Assembly of the State of Delaware:

Section 1. Title 30, Delaware Code, is amended by creating within Part IV a new Chapter 55 to read as follows:

CHAPTER 55. PUBLIC UTILITIES TAXES

§ 5501. Definitions

As used in this chapter —

(1) "Public Utility" — includes the following commodities and services: (1) electricity distributed for any heat, light or power use; (2) gas (except liquified gas) piped from a distribution center to the consumer or user: (3) intrastate telephone and telegraph communication services; and (4) cable television communication. services. An such commodities and services are included whether distributed directly by the distributor to the consumer within this state or distributed through an intermediary to the consumer or user within this state.

(2) "Distribute" — includes any and all activity to produce, distribute or supply any commodities and services as defined in this section within this state.

(3) "Distributor" — includes any company, corporation, partnership, firm, association cooperative or any person or group of persons which first produces, distributes or supplies the commodities or services subject to the taxes imposed by this Chapter for sale to consumers or users within this state.

(0) "Gross Receipts" includes total consideration received

by a distributor for commodities or services sold, distributed, produced or supplied within the state of Delaware; except that the term shall not include sales of electricity for resale where there is an existing contract for such sale or such sales are subject to the jurisdiction of the Federal Power Commission, but in any case such sales shall be included as gross receipts after January 1, 1974, or on expiration of said existing contract, whichever first occurs.

§ 5502. Tax; rate

(a) A tax is imposed upon all intrastate telephone commodities and services distributed within this state by the distributor at the rate of 5% of the sale price or tariff charge paid for such commodities or services.

(b) A tax is imposed upon any distributor of gas, electricity, telegraph, or cable television communication commodities and services which tax shall be at the rate of 5% of the-gross receipts or tariff charges received by the distributor for such commodities or services distributed within this state.

(c) When the tax imposed by subsection (b) of this section applies to a distributor subject to the regulation of the Public Service Commission, the Commission is directed, after consultation with such distributor and without a public hearing, to adjust the tariff of such distributor so that the tax is passed through pro rata to the distributor's customers and the distributor's earnings are neither increased nor decreased by such tax. The tariff adjustments filed by such distributor and approved by the Public Service Commission shall incorporate the tax in the charges for commodities and services so that the tax shall not appear on the customer's bill as a separate item. The Public Service Commission is further directed to allow such adjusted tariffs and the rates therein to become effective immediately upon filing without any requirement of 30 days' notice and without suspension thereof. The Public Service Commission may enter any orders which shall be necessary to permit the tax to be passed through to such distributor's customer while revised tariff_s and billing procedures are being prepared.

§ 5503. Computation of tax

(a) The tax imposed by Section 5502 (a) shall be collected

by the distributor from the ultimate consumer as a separate item not included in the sales price or tariff charge. The amount of tax thus collectible from the ultimate consumer shall in each case be calculated on the basis of a uniform percentage of the sale price or tariff charge payable by the ultimate consumer for the commodity or service which is subject to tax under this section, and shall in each case be computed to the nearest highest cent; provided, however, that such tax shall not apply to receipts derived through the use of automatic coin collecting machines or coin boxes. A distributor's gross receipts shall not be deemed to include any portion of the tax collected from its consumer.

(b) The tax imposed by Section 5502 (b) of this Chapter shall be imposed upon the distributor and is not be construed as a tax upon the consumer or user.

§ 5504. Payment of tax

The taxes collected under this section during any calendar month shall be paid by the distributor to the Department of Finance within fifteen days after the end of said calendar month.

A distributor may, with the approval of the Department of Finance, compute its remittances either upon its billings or upon its cash receipts, provided that if the distributor is permitted to remit on the basis of its billings, the distributor shall be entitled to a credit against subsequent remittances for any taxes billed but not collected. The Secretary of Finance shall prescribe such rules, regulations and forms for the administration of the tax imposed by this chapter as he deems necessary and as are consistent with the laws of Delaware.

§ 5505. Failure to pay tax; interest

Any person who fails to pay the tax imposed by this Chapter, for any reason, shall be liable to pay an amount equal to the tax due, plus interest in the amount of one percent per month or fraction thereof from date due until date of payment.

§ 5506. Exemptions

(a) No persons who is liable for the tax imposed by Section 5502 (b) of this Chapter shall be required to be licensed as a wholesaler under Section 2901 (6) (D) Chapter 29, Title 30.

(b) All intrastate telephone commodities and services shall be subject to the tax 'imposed by Section 5502 (a) of this title and the consumer or user thereof shall not be subject to the tax prescribed by Chapter 43 of this Title.

(c) Sales of appliances or other equipment or machinery by a distributor shall be exempt from the tax imposed by Section 5502 (b) this Chapter provided such sales are subject to and included in the license fees required by Chapter 29, Title 30.

Section 2. This Act shall take effect and be imposed on the sale, distribution, production or supply of commodities and services on or after August 1, 1971.

Approved July 31, 1971.