CHAPTER 406

FORMERLY

HOUSE SUBSTITUTE NO. 1

FOR

HOUSE BILL NO. 118

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

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

Section 1. Amend § 359, Title 30 of the Delaware Code by renaming it "Publication of Tax Information", by redesignating the existing Section as subsection "(a)", and by adding thereto a new subsection "(b)" to read as follows:

"(b)(1) General. Except as provided herein, and notwithstanding the provisions of § 368 of this Title, the Secretary of Finance shall prepare, maintain, and publish on the Division of Revenue Internet Website, two (2) lists of taxpayers owing unpaid tax and additions to tax finally determined to be due under Title 30 of the Delaware Code for (i) personal income tax, and (ii) business taxes administered by the Department of Finance, including employee withholding tax.

(2) Contents of lists. Each list shall consist of the 100 taxpayers owing to this State the greatest amount of unpaid tax and additions to tax, as modified by paragraph (6) of this subsection, and shall contain the name and address of each such taxpayer, the total by type and amount of tax and additions to tax due and the date the amount was finally determined to be due. In the case of entities other than natural persons, the list may also name any persons who were at least 25% owners or beneficial owners or who were responsible officers of such entity at or after the time the liability was created.

(3) Administration.

(i) Each list shall be updated on a quarterly basis, and

(ii) Notwithstanding subparagraph (7)(i) of this subsection, each newly updated list shall not include the names of taxpayers that have appeared on previous versions of the same list unless:

a. A separate instance of unpaid tax or additions to tax, which ranks the taxpayer's new liability, subsequent to the publishing of the prior quarter's list, among the 100 largest, or

b. At least one (1) year has elapsed since the taxpayer appeared on the list and, in the Director's judgment, returning the taxpayer to the list will significantly increase the likelihood of payment.

(4) Limitations. No taxpayer shall be included on the aforesaid list until (i) the overdue liability has been reduced to a judgment under § 554 of this Title, and (ii) sixty (60) days have elapsed following the date of mailing a notice by certified mail to the taxpayer, taxpayer's owners, beneficial owners or officers, as the case may be, of the Secretary's intent to include their name and other required information on the list to be published.

(5) Exceptions. No taxpayer shall be included in the published list if the taxpayer has (i) since the mailing of the notice, paid the liability in full, or entered into a written agreement with the Division for payment of the delinquency, or (ii) the total liability for all taxes and additions to tax is less than $1,000.

(6) Calculating the amount of tax and additions to tax to be listed. For the exclusive purpose of ascertaining a taxpayer's inclusion on the published list, in calculating the amount of tax and additions to tax, there shall be excluded any amount of tax or addition to tax which:

(i) has been determined to be uncollectible pursuant to § 352 of this Title, or

(ii) is the subject of an agreement between the Secretary and the taxpayer for installment payment of the amount due and which is not in default by a period of thirty-one (31) days, or

(iii) is subject to stay of collection pursuant to the Bankruptcy Code of the United States, or

(iv) has, in the discretion of the Secretary or the Secretary's delegate and in the interests of justice, been deferred from collection for no more than ninety (90) days for the purpose of researching whether or not an error has occurred in calculating the amount due, or

(v) the Director, in the Director's discretion, and after receipt of a taxpayer's written request and statement of reasonable cause, and with the written approval of the Secretary of Finance, has deemed to result from extraordinary circumstances.

(7) Compliance adjustment.

(i) Taxpayers appearing on the above list shall be removed therefrom within thirty (30) days of the receipt of full payment of the delinquent liability or entering into a written agreement with the Division for payment of the delinquency.

(ii) Any issuance of bad check or breach of said agreement may result in the taxpayer's name being immediately returned to the published list.

(8) Regulations. The Department may promulgate rules and regulations necessary to implement this Act.

(9) Any disclosure made by the Secretary under paragraphs (1) and (2) of this subsection, in a good faith effort to comply with paragraphs (3) – (7) of this subsection, shall not be considered a violation of any statute prohibiting disclosure of taxpayer information.".

Section 2. This Act shall be effective on the date of its enactment. The Secretary may cause the list prescribed in this Act to be published no sooner than six (6) months after the date of enactment.

Approved July 10, 2006