CHAPTER 399

FORMERLY

HOUSE BILL NO. 578

AS AMENDED BY HOUSE AMENDMENT NO. 1

AN ACT TO AMEND CHAPTER 11, TITLE 30 OF THE DELAWARE CODE RELATING TO THE PERSONAL INCOME TAX.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (Three-fifths of all members elected to each House thereof concurring therein):

Section 1. Amend §1106(a), Chapter 11, Title 30 of the Delaware Code by striking paragraph 1 of said subsection and substitute in lieu thereof a new paragraph 1 to read as follows:

"(1)(1) Interest qualifying under §103 of the United States Internal Revenue Code of 1986 or any similar statute, other than interest on obligations and securities of this State and its political subdivisions and authorities; and (ii) dividends paid by a regulated investment company (sometimes referred to as a mutual fund) qualifying under §852(b)(5) of the United States Internal Revenue Code of 1986 or any similar statute; provided that dividends attributable to interest on obligations and securities of this State and its political subdivisions and authorities may be excluded from such addition if the amount of interest attributable thereto is reported in writing to the holder or owner of the shares or units of the regulated investment company by or on behalf of the manager of the regulated investment company, and such report states the dollar amount or percentage of Delaware and non-Delaware dividends pertaining to the taxpayer;"

Section 2. Amend §1106(b), Chapter 11, Title 30 of the Delaware Code by striking paragraph (1) of said subsection and substitute in lieu thereof a new paragraph (1) to read as follows:

"(1)(1) Interest on obligations of the United States and its territories and possessions, or of any authority, commission or instrumentality of the United States, to the extent includable in gross income for federal income tax purposes, but exempt from state income taxes under the laws of the United States; and (ii) dividends paid by a regulated investment company (as defined in §851 of the United States Internal Revenue Code of 1986, or any similar statute, sometimes referred to as a mutual fund) to the extent such dividends are attributable to interest paid on obligations of the United States and its territories and possessions, or of any authority, commission or instrumentality of the United States, which interest would be subject to subtraction from federal adjusted gross income under subparagraph (1) of this paragraph if such obligations were owned directly by an individual and the interest on them were paid to such individual. The portion of the dividends of a regulated investment company which represents United States government interest which is exempt from state income taxes under this subparagraph shall be as reported in writing to the holder or owner of the share or units of the regulated investment company by or on behalf of the manager of the regulated investment company, and such report shall state the dollar amount or percentage of exempt and non-exempt dividends pertaining to the taxpayer;"

Section 3. Amend §1169(a), Chapter 11, Title 30 of the Delaware Code by adding after the word "individual" as it appears therein the phrase or trust".

Section 4. Amend §1169(b), Chapter 11, Title 30 of the Delaware Code by striking the phrase "individual estimates to be his and substitute in lieu thereof the phrase "individual or trust estimates to be his or its"

Section 5. Amend §1169(d), Chapter 11, Title 30 of the Delaware code by adding after the word "individual" as it appears therein the phrase or trust".

Section 6. Amend §1169(a), Chapter 11, Title 30 of the Delaware Code by adding at the end of said subsection the following sentence: For purposes of this Section, the term "trust" shall mean any trust the fair market value of whose assets at the end of the tax year next preceding the tax year for which estimated taxes are otherwise required by this Section equal or exceed $1 million."

Section 7. Sections 1, 3, 4, 5 and 6 of this Act shall be effective for tax years beginning after December 31, 1990. Section 2 of this Act shall be effective for tax years beginning after December 31, 1989.

Approved July 18, 1990.