CHAPTER 138

FORMERLY

HOUSE BILL NO. 146

AS AMENDED BY

HOUSE AMENDMENT NO. 1

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

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(b), Title 30 of the Delaware Code by adding a new paragraph “(9)” to read as follows:

“(9) The amount of any refund of Delaware State income taxes imposed under this Chapter, to the extent included in federal adjusted gross income for the tax period”.

Section 2. Amend § 1635, Title 30 of the Delaware Code by designating existing § 1635 as Subsection (a) of said Section and adding to said Section a new Subsection (b) to read as follows:

“(b) in the case of an electing small business trust as defined in § 1361(e) of the Internal Revenue Code [26 U.S.C. § 1361(e)] there shall be added to the amount calculated pursuant to Subsection (a), to the extent not otherwise included in such amount, the taxable income of the portion of the trust consisting of S corporation stock that is treated as a separate trust pursuant to § 641(c) of the Internal Revenue Code [26 U.S.C. § 641(c)].”.

Section 3. Section 1 of this Act confirms the operation of the personal income tax law since its inception. Section 2 of this Act shall be effective for tax periods commencing after December 31, 1996.

Approved July 11, 2003