CHAPTER 176

FORMERLY

HOUSE BILL NO. 258

AN ACT TO AMEND CHAPTER 11, TITLE 30 OF THE DELAWARE CODE, RELATING TO PARTNERSHIP TAX RETURNS AND PENALTIES FOR FAILURE TO FILE PARTNERSHIP TAX RETURNS AND RELATED INFORMATION.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend Section 1174, Chapter B, Title 30 of the Delaware Code by striking the Section in its entirety and substituting in lieu thereof the following:

"§1174. Partnership Return.

(a) Every partnership having any income derived from sources in this State, determined in accordance with the applicable rules of $1122 of this title as in the case of a non- resident individual, shall make a return for the taxable year setting forth all items of income, gain, loss and deduction, and the names and addresses of the individuals, whether residents or non- resident, who would be entitled to share in the net income if distributed, the amount of the distributive share of each individual, and such other pertinent Information as the Director of Revenue may prescribe by rules or Instruction. Such returns shall be filed on or before the date prescribed for filing a federal partnership return. For purpose of this subsection, 'taxable year means a year or period which would be a taxable year of the partnership if it were subject to tax under this chapter.

(b) Every partnership having a resident partner, and which is not otherwise required to file a return for a taxable year pursuant to subsection (a) of this section, shall make a return for the taxable year setting forth all items of income, gain. loss and deduction and shall file a copy of each Schedule K 1 of a resident partner which was required to accompany the partnership's federal partnership return for such taxable year. Such Schedules K 1 shall be filed on or before the date prescribed for filing a federal partnership return. For purpose of this subsection, 'taxable year' means a year or period which would be a taxable year of the partnership if it were subject to tax under this Chapter."

Section 2. Amend paragraph (1), subsection (c). Section 1194. Chapter 11. Title 30 of the Delaware Code by substituting for "§1174" in each place it appears in such paragraph (I) the following:

"$1174 (a)".

Section 3. Amend paragraph (2), subsection (c), Section 1194. Chapter II, Title 30 of the Delaware Code by adding at the end thereof the following new sentence" "The maximum penalty for any one taxable year shall not exceed $10,000."

Section 4. Amend Section 1194, Chapter 11. Title 30 of the Delaware Code by redesignating subsection (d) thereof as subsection (e), by redesignating subsection (e) thereof as subsection (U. and by Inserting new subsection (d) to read as follows:

"(d) (1) If any partnership required to file a return or one or more Schedules K 1 under $1174 (b) of this title for any taxable year fails to file such return or Schedules K I at the time prescribed therefor (determined with regard to any extension of time for filing) such partnership shall be liable for a penalty determined under paragraph (2) below for each month or fraction thereof during which such failure continues (but not to exceed 5 months). unless it is shown that such failure was due to reasonable cause.

(2) For purposes of paragraph (1) of this subsection. the amount of penalty for any month is $25. multiplied by the number of Schedules K- 1 required to have been filed by §1174 (b) of this title." Section 5. This Act shall take effect January I, 1985.

Approved July 12, 1985