CHAPTER 119

FORMERLY

SENATE BILL NO. 201

AS AMENDED BY SENATE AMENDMENT NO. 1

AN ACT TO AMEND CHAPTER 55, TITLE 30, DELAWARE CODE, RELATING TO PUBLIC UTILITY TAXES.

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

Section 1. Amend Chapter 55, Title 30 of the Delaware Code by adding thereto new Sections 5508, 5509, and 5510 to read as follows:

§5508. Assessment and Collection of Deficiencies: Notice: Petition for Redetermination of Deficiency

(a) The amount of tax which is shown to be due on the return (including revisions for mathematical errors) shall be deemed to be assessed on the date of filing of the return (including any amended returns) showing an increase of tax. In the case of a return properly filed without the computation of the tax, the tax computed by the Secretary of Finance shall be deemed to be assessed on the date when payment is due. If a notice of deficiency has been mailed, the amount of the deficiency shall, if no protest is filed, be deemed to be assessed on the date provided in subsection (e) of this Section or, if a protest is filed, then upon the date when the determination of the Secretary of Finance becomes final. Any amount paid as a tax or in respect of a tax shall be deemed to be assessed upon the date of receipt of payment, notwithstanding any other provision of this Chapter.

(b) If the mode or time for the assessment of any tax under this Chapter,
including interest, additions to tax and penalty is not otherwise provided for, the Secretary of Finance may establish the same.

(a) The Secretary of Finance may, at any time within the period prescribed for issuance of a notice of deficiency, issue a supplemental notice of deficiency, subject to the provisions of this Section where applicable, whenever it is found that any notice is imperfect or incomplete in any material aspect.

(a) As soon as practicable after a return is filed, the Secretary of Finance shall examine it and shall determine the correct amount of tax. If the tax found due upon examination is greater than the amount shown on the return to be due, notice of a deficiency shall be mailed to the taxpayer by registered or certified mail.

(a) Within 90 days after such notice is mailed the taxpayer may file a written

protest with the Secretary of Finance for a redetermination of the tax. The taxpayer shall be granted a hearing if it is requested in the written protest. If the taxpayer does not file a timely written protest with the Secretary of Finance, assessment of the deficiency shall be made and shall be paid within ten days after notice and demand from the Secretary of Finance.

(a) Notice of the Secretary of Finance's determination shall be mailed to the taxpayer by certified or registered mail, and such notice shall set forth briefly the Secretary of Finance's basis of decision in each case decided in whole or in part adversely to the taxpayer.

The action of the Secretary of Finance on the taxpayer's protest is final upon the expiration of 90 days from the date when he mails notice of his action to the taxpayer unless within this period the taxpayer files an appeal to the Tax Appeal Board.

(a) If the taxpayer is notified that because of a mathematical error appearing upon the face of the return an amount of tax in excess of that shown upon the return is due, then, notwithstanding any other provision of this Section, such excess shall be paid within ten days after such notice is mailed to the taxpayer.

(b) A 'deficiency' means the amount (other than an amount described in suhsection (g) of this Section) by which the tax imposed by this Chapter exceeds the amount shown as the tax by the taxpayer upon its return, or if no return is made by the taxpayer, the amount determined by the Secretary of Finance to be the correct or estimated amount of the tax.

§5509. Limitations on • II efict enC,V

(a) Except as provided below, a notice of deficiency shall be mailed to the taxpayer within three years after the last day prescribed for filing the return or, if later, the date the return was filed. No deficiency shall be assessed or
collected with respect to the year for which the return was filed unless the notice of deficiency is mailed within the three-year period or the period otherwise fixed.

(b) If no return is filed or a false or fraudulent return is filed with intent to evade the tax imposed by this Chapter, a notice of deficiency may be mailed to the taxpayer at any time.

(c) Where before the expiration of the time prescribed in subsection (a) of this Section for the issuance of the notice of deficiency, both the Secretary of Finance and the taxpayer have consented in writing to its issuance after such time, the notice may issue at any time prior to the expiration of the period agreed upon. The period so agreed upon may be extended by subsequent agreements in
writing made before the expiration of the period previously agreed upon.

§5510. Claim for Refund

(a) Upon determining that any tax, penalty or interest collected with respect to this Chapter has been collected improperly, the Department of Finance shall, if a claim is made within three years of the date of the overpayment, refund to the taxpayer the sums so paid.

(b) When the Department disallows a claim for refund in whole or in part, the disallowance shall become final 90 days from the date when notice of disallowance is mailed to the taxpayer, unless within that period the taxpayer files a written protest with the Director of Revenue in which he shall set forth the grounds on which the protest is based. If a protest is filed, the Director shall reconsider
the disallowance. Notice of the Director's determination shall be mailed to the taxpayer by registered or certified mall. The action of the Director on the
taxpayer's protest is final upon the expiration of 90 days from the date when he mails notice of his action to the taxpayer unless within this period he seeks review by the Tax Appeal Board of the Director's determination."

Section 2. This Act shall be effective on the date of enactment.

Approved July 8, 1987.