CHAPTER 347

FORMERLY

SENATE BILL NO. 434

AN ACT TO AMEND TITLE 30 OF THE DELAWARE CODE RELATING TO TAXES ON PERSONAL INCOME.

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

Section 1. Amend § 1102(a), Title 30 of the Delaware Code, by adding a new paragraph (8) to read as follows:

"(8) For taxable years beginning after December 31, 1998, the amount of tax shall be determined as follows: 2.60% of taxable income in excess of $2,000 but not in excess of $5,000; 4.30% of taxable income in excess of $5,000 but not in excess of $10,000; 5.20% of taxable income in excess of $10,000 but not in excess of $20,000; and 5.60% of taxable income in excess of $20,000 but not in excess of $25,000."

Section 2. Amend § 1102(a)(7), Title 30 of the Delaware Code, by inserting after the date "December 31, 1996," as it appears in said paragraph the phrase and before January 1, 1999".

Section 3. Amend § 1108(a), Title 30 of the Delaware Code, by striking said subsection in its entirety and substituting in lieu thereof the following new subsection (a) to read as follows:

"(a) Except as otherwise provided in subsections (b) and (c) of this section,

(1) or taxable periods ending before January I, 1999, the standard deduction of a resident individual shall be $1,300, and the standard deduction of resident spouses shall be $1,600 if they file a joint return and $800 each if they file separate returns, and

(2) for taxable periods beginning after December 31, 1998, the standard deduction of a resident individual shall be $3,250, and the standard deduction of resident spouses shall be $4,000 if they file a joint return and $2,000 each if they file separate returns.".

Section 4. Amend § 1108(6), Title 30 of the Delaware Code, by striking the symbol and figure "$1,000" and substituting in lieu thereof the symbol and figure "$2,500".

Section 5. Amend § 1161(1), Title 30 of the Delaware Code, by striking said subsection in its entirety and substituting therefor the following:

"(1) Every resident individual who

(A) is required to file a federal income tax return for the taxable year, or

(B) is a single person and has for the taxable year adjusted gross income as modified by § 1106 of this title of more than $8,762, or

(C) is a married individual who is entitled to file a joint federal income tax return for the taxable year, and whose adjusted gross income for the taxable year as modified by § 1106 of this title, when combined with the adjusted gross income of the individual's spouse, is more than $11,837.".

Section 6. Amend § 1162, Title 30 of the Delaware Code by striking subsection (b) in its entirety and substituting in lieu thereof the following subsection (b):

"(b)(1) Whenever the federal income tax liability of a husband and wife is determined on a joint federal income tax return and they file separate Delaware income tax returns pursuant to this chapter, then the items of federal deduction shall be determined for purposes of Section 1105 and Section 1109 of this title by reference to the amounts allowed on the husband and wife's joint federal return and not by reference to amounts that would have been allowed had they tiled separate federal returns.

(2) In accordance with regulations issued in the sound discretion of the Director, paragraph (1) of this subsection shall not apply to federal deductions enacted after January I, 1998, which are intended to reduce or eliminate disparities in federal taxation between married and single persons.".

Section 7. Amend § 1101, Title 30 of the Delaware Code, by striking the phrase "be or become effective, for the taxable year" as it appears in said section and substituting in lieu thereof the phrase "have been or shall become effective, for any taxable year".

Section 8. Amend § 1105, Title 30 of the Delaware Code, by striking the phrase "United States" as it appears in said section and substituting in lieu thereof the phrase "United States as the same arc or shall become effective for any taxable year".

Section 9. Amend § 1109(a), Title 30 of the Delaware Code, by striking the phrase "tax return" as it appears in said subsection and substituting in lieu thereof the phrase "tax return as shall be permitted under the laws of the United States as the same are or shall become effective for any taxable year".

Section 10. If any clause, sentence, section, provision or part of this Act shall be adjudged to be unconstitutional or invalid for any reason by any court of competent jurisdiction, such judgment shall not impair, invalidate, or affect the remainder of this Act, which shall remain in full force and effect.

Section 11. Sections 1 through 5 of this Act shall be effective for tax periods commencing after December 31, 1998. Section 6 of this Act shall be effective for tax periods commencing after December 31, 1997. Sections 7, 8, and 9 of this Act clarify, but do not change, existing law.

Approved July 1, 1998