CHAPTER 40

FORMERLY

SENATE BILL NO. 55

AS AMENDED BY SENATE AMENDMENT NO. 1

AN ACT TO AMEND CHAPTERS 3, 11, 19, 20, 21, 23, 25, 43, AND 54 OF TITLE 30 OF THE DELAWARE CODE RELATING TO DELAWARE TAXES.

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

Section 1. Amend Chapter 3, Title 30 of the Delaware Code by adding thereto a new § 368 to read as follows:

"§368. Secrecy of Returns and Information; Penalty.

(a) Except in accordance with proper judicial order or as otherwise provided by law, it shall be unlawful for any officer or employee of the Department of Finance, or for any other officer or employee of this State who has access to tax returns or information from tax returns under this Title (other than Chapters 30 [except §§ 3004 and 3005], 51, and 52) to disclose or make known to any person in any manner the amount of income or any particulars set forth or disclosed in any report or return required under this Title (other than Chapters 30 [except §§3004 and 3005], 51, and 52) including any copy of any portion of a federal income or estate tax return or report, or any information on a federal return or report which is required to be attached to or included in a State tax return.

(b) Nothing in this Section shall be construed to prohibit the publication of statistics classified so as to avoid indentification of specific taxpayers, or to prohibit the disclosure of the tax return or return information of any taxpayer to such person or persons as the taxpayer may designate in a written request or consent to such disclosure.

(c) For purposes of this section, the term 'officer or employee' shall include present and former officers and employees, and any person or persons employed or retained by the State on an independent contractor basis. The term 'return' or 'report' shall include reports of the Internal Revenue Service or other competent federal authority containing tax return information.

(d) Any violation of this Section shall be a misdemeanor, punishable upon conviction by a fine not to exceed $1,000 or imprisonment not to exceed six months, or both. The Superior Court shall have exclusive original jurisdiction over such misdemeanor.

(e) For purposes of this section, the terms 'return' and 'return information' shall not be construed to include any information appearing on or to appear on the face of a license required to be displayed under §2109 of this Title or the name or mailing address of the licensee of said license."

Section 2. Amend §1241, Chapter 11, Title 30 of the Delaware Code by striking said section in its entirety.

Section 3. Amend §1242, Chapter 11, Title 30 of the Delaware Code by striking the figure "1241" as it appears in said section and substitute in lieu thereof the figure "368".

Section 4. Amend §2119, Chapter 21, Title 30 of the Delaware Code by striking the phrase "each of them, for every such offense" as it appears therein and substitute in lieu thereof the phrase each of them, and those persons defined in §282, Title 11 of the Delaware Code, for every such offense".

Section 5. Amend §2119, Chapter 21, Title 30 of the Delaware Code by striking the symbol and figure "$500" as they appear therein and substitute in lieu thereof the symbol and figure "$3,000".

Section 6. Amend Chapter 21, Title 30 of the Delaware Code by adding thereto a new §2124 to read as follows:

"§2124. Revocation, Non-renewal or Non-issuance of Licenses for Non-Payment of Taxes.

(a) Whenever it shall appear to the Director of Revenue that there has been assessed against any person tax or penalty under this Title (other than Chapters 51, 52, and Chapter 30 with the exception of §§3004 and 3005 of said Chapter), the assessment has become final, and the tax or taxes and/or penalty and interest in an amount in excess of $2500 has remained unpaid in excess of 180 days, the Director may issue a Notice of Intent to Revoke any license issued to such person (provided, however, that the license for which such Notice to Revoke is issued shall be the license with respect to which the delinquency pertains and also provided that, in case of delinquent withholding or corporate income taxes, any license issued to such person) or, in the case of a renewal or new license application, a Notice of Intent to Deny the renewal or application, Such Notice shall set forth the reasons for its issuance (including the amount of such unpaid liability) and shall be Sent by certified mail to the last known address pi the licensee or applicant. The determination of revocation, non-renewal or non-issuance of the license contained in the Notice shall become effective if not protested within 30 days of its issuance. Except as provided In this section, protests of such notices are subject to the same procedures as assessments of taxes under this Part (other than Chapter 30). The sole grounds for protest under this section, however, shall be: (1) the absence of any unpaid liability as of the date of the protest; or (2) that the assessment creating the liability was contrary to law; provided, however, that the determination of the Director under this subsection may be appealed in accordance with section 2103 of this Title.

(b) Section 2119 of this Title shall pertain to any person carrying on business following revocation or non-renewal of a license as if such license had not been first obtained.

(c) The Court of Chancery shall have jurisdiction to enjoin any person, resident or non-resident, or any agent thereof, from transacting any business in this State if such person has not first obtained a license therefor under this Part or such license has been revoked or not renewed under this Section. The Secretary of Finance may proceed for this purpose by complaint in any county in which such person is doing business.

(d) For purposes of this section, the word 'person' shall have the same meaning as the definition contained in §2701(3) of this Title.

(e) Any license which is revoked, not issued or not renewed will be reinstated, issued, or renewed, as appropriate, upon full payment of amounts set forth in the Notice described in subsection (a) of this Section with the addition of any statutory interest thereon until the date of such payment or upon an agreement and continuing performance in accordance therewith under such terms and Conditions as the Director may deem suitable to preserve the revenues of the State, to provide for payment of the unpaid amount over a period not to exceed 24 months and for maintaining current tax payments without delinquency."

Section 7. Amend Chapter 21, Title 30 of the Delaware Code by adding thereto a new §2125 to read as follows:

§2125. Persons Responsible for Payment of Penalty, Etc.

(a) For purposes of: (1) Any assessment of penalty or any fine under this Part (other than Chapter 30 with the exception of §3004 and §3005 of said Chapter); or (2) Any injunction or other remedy under §2124 of this Title:

Persons subject to such assessment, fine, injunction or other remedy shall include, in addition to the licensee, any person who as a director, officer, holder of ownership interests equal to or exceeding 25% or member of any entity (corporation, partnership, association, joint venture, etc.) performs or causes to be performed in the name of or on behalf of that entity any act which gives rise to liability for any assessment, fine, injunction, or other remedy to the same extent as if the act were performed in his own name or on his own behalf.

(b) For purposes of this section, the word 'act' shall mean only any conduct of commission or omission which results in the wilful and knowing failure to pay any tax or assessment Imposed upon a licensee by this Part (other than Chapter 30 with the exception of §3004 and §3005 of said Chapter)."

Section 8. Amend §5401(1)(r), Chapter 54, Title 30 of the Delaware Code by striking the period "." which appears at the end of the existing subsection and substituting in lieu thereof a semicolon ";".

Section 9. Amend §5401 (1), Chapter 54, Title 30 of the Delaware Code by adding thereto two new paragraphs designated as "(s)" and "(t)" and to read as follows:

"(s) Any conveyance of a mobile home as defined in §7003 of Title 25, provided tax on said conveyance has been paid under §3002, Chapter 30, of this Title;

(t) Any conveyance without consideration to an organization exempt from tax under § 501(c)(3) of the federal Internal Revenue code."

Section 10. Amend §375(a)(1), Chapter 3, Title 30 of the Delaware Code by striking the phrase "where the aggregate amount of the contracts does not exceed $100,000" as it appears in said paragraph.

Section 11. Amend §2501, Chapter 25, Title 30 of the Delaware Code by striking existing subsections (3) and (4) of said section and substitute in lieu thereof new subsections (3) and (4) to read as follows:

"(3) 'Resident contractor' or 'resident subcontractor' includes any general contractor, prime contractor, construction manager, subcontractor or other type of construction contractor who regularly maintains a place of business in this State. If any such contractor entity is comprised of more than one entity in a partnership, joint venture, or some other legal relationship establishing such contractor entity, the contractor entity shall itself be treated as a separate entity which must comply with the provisions of a §375 of this Title to the extent they are otherwise applicable. If at least one of the constituent entities making up the contractor entity regularly maintains a place of business in this State, such contractor entity shall be construed to be a 'resident' or 'resident person' or 'resident, contractor' of this State. If none of such constituent entities regularly maintains a place of business in this State, such contractor entity shall be construed to be a 'nonresident person desiring to engage in business in this State as a contractor,' a 'nonresident and a nonresident person.' If any contractor is not comprised of more than one constituent entity in a partnership or joint venture or some other legal relationship establishing such contractor, and if such contractor shall regularly maintain a place of business in this State, such contractor shall be construed to be a 'resident contractor'.

(4) 'Nonresident contractor' or 'nonresident subcontractor' is a general contractor, prime contractor, construction manager, subcontractor or other type of construction contractor who is not a resident contractor or resident subcontractor."

Section 12. Amend §2501, Chapter 25, Title 30 of the Delaware Code by adding thereto a new subsection (7) to read as follows:

"(7) For the purposes of this Chapter, 'regularly maintaining a place of business in this State' shall not be established by maintenance of a site facility, such as a site trailer, or any other facility intended for use during construction under one contract or a related set of contracts irrespective of the expected duration of such contract or contracts."

Section 13. Amend §375, Chapter 3, Title 30 of the Delaware Code by adding thereto a new subsection (g) to read as follows:

"(g) In lieu of the surety bond required under subsection (a) of this section, the Director of Revenue may accept bank letters of credit in the amount specified by and subject to the same conditions as contained to that subsection; provided, however, that any such letter is In a form approved by the Director, is issued or confirmed by a bank meeting whatever requirements the Director may by regulation prescribe, and the Director is satisfied that the letter Is sufficient to protect the tax revenue of the State."

Section 14. Amend §375(a)(3), Chapter 3, Title 30 of the Delaware Code by inserting immediately after the word "waived" the words In whole or in part".

Section 15. Amend §1912(c), Chapter 19, Title 30 of the Delaware Code by striking the number "5" as it appears in said subsection and substituting in lieu thereof the number "3".

Section 16. Amend §4306, Chapter 43, Title 30 of the Delaware Code by striking the word "six" as it appears therein and substituting in lieu thereof the word "three".

Section 17. Amend §2301(p), Chapter 23, Title 30 of the Delaware Code by striking the phrase "(b) and (d)" as it appears therein in its entirety and substituting in lieu thereof the phrase "(a), (b), and (d)".

Section 18. Amend Section 2121, Chapter 21, Title 30 of the Delaware Code by striking the period "." at the end of said Section and inserting in lieu thereof the following phrase: "or, otherwise than in the event of any person making an initial application for a license, in the case of license fees under Chapter 23 computed according to numbers of business units prior to such business units being placed in service."

Section 19. Amend §2121, Chapter 21, Title 30 of the Delaware Code by striking the phrase "23, 27" as it appears in said Section and substituting in lieu thereof the phrase "23, 25, 27".

Section 20. Amend §2301 (a)(71), Chapter 23, Title 30 of the Delaware Code by striking the symbol and figure "$150" in their entirety and substitute in lieu thereof the symbol and figure "$75".

Section 21. Amend §2301, Chapter 23, Title 30 of the Delaware Code by adding thereto a new subsection (t) to read as follows:

"(t) Chapter 12 of Title 24 notwithstanding, the term of new licenses and renewals issued to security businesses shall be governed exclusively by this Part; provided, however, that the Division shall not issue a license to a security business without the approval of the Superintendent of the Delaware State Police in accordance with § 1202(a), Title 24. Two-year security business licenses expiring between the date on which this provision is enacted and a date two years thereafter shall be renewed for a period no greater than one year at an annual fee of $75, and such license shall expire the following December 31. The fee shall be reduced according to the number of full calendar months remaining in the year."

Section 22. Amend §2301(e), Chapter 23, Title 30 of the Delaware Code by striking the phrase "(65) of subsection (a)" as it appears in said subsection and substituting in lieu thereof the following: "(66) of subsection (a)".

Section 23. Amend §2301(e), Chapter 23, Title 30 of the Delaware Code by striking the phrase "(88) of subsection (a)" as it appears in said subsection and substituting in lieu thereof the following: "(89) of subsection (a)".

Section 24. Amend §2301(f), Chapter 23, Title 30 of the Delaware Code by striking the phrase "(66), (67), (72), (73), (78), (79), (80) and (82)" as it appears in said subsection and substitute in lieu thereof the following: "(67), (68), (73), (74), (79), (80), (81), and (83)".

Section 25. Amend §2020 (3), Chapter 20, Title 30 of the Delaware Code by striking the phrase "(62), (68) or (71)" as it appears in said subsection and substituting in lieu thereof the following: "(63), (69) or (72)".

Section 26. Amend §2304 (b), Chapter 23, Title 30 of the Delaware Code by striking said subsection in its entirety and substituting in lieu thereof the following:

"(b) Except as provided in Chapter 53 of this Title, whoever being the owner of a vending machine requiring an identifying label pursuant to this section fails to affix to each such machine the identifying label required by this section or who, on written request of the Director of Revenue or his designee, fails to disclose within a reasonable time not to exceed 120 hours the present location of any or all such machines (including amusement machines and music machines but not cigarette vending machines) to the Division of Revenue shall be fined not less than $25 nor more than $50, for each machine not having such identifying label affixed thereto or whose location is not disclosed in accordance with this subsection. A fine of not less than $50 or more than $100 for each machine shall be applicable whenever an owner fails both to affix the identifying label to, and disclose the present location of, a machine in accordance with the requirements of this section. For purposes of this subsection, failure to disclose in response to a subsequent request which is substantially identical to a request issued less than sixty days earlier shall be considered to be a continuation of the earlier failure to disclose and shall not constitute a separate act for purposes of this subsection. The Superior Court in and for the county in which the machine is located or in which the Division of Revenue maintains its principal office shall have exclusive original jurisdiction over offenses described in this subsection."

Section 27. Sections 4, 5, 6, and 7 of this Act shall be effective for unpaid balances existing on or after July 1, 1990. Section 9 of this Act shall be effective for conveyances occurring on or after the date of its enactment into law. Section 21 shall be effective for new licenses and renewals commencing on or after the date this Act is enacted into law. All other provisions of this Act shall be effective upon its enactment into law.

Approved June 27, 1989.