TITLE 30

State Taxes

General Provisions; State Tax Agencies; Procedure and Enforcement

CHAPTER 3. DEPARTMENT OF FINANCE

Subchapter V. General Regulations


(a) Any nonresident person or firm, whether incorporated or not, either doing business in this State, so as to be subject to Delaware income tax or state occupational or business licenses, or having employees or agents performing labor or services in this State, so as to subject such employees or agents to Delaware income tax and such employer to Delaware income tax withholdings and to the Delaware Unemployment Compensation Law, shall file a surety bond with the Department of Finance, payable to the State, to guarantee the payment of state income taxes, state occupational or business licenses, unemployment compensation contributions and income taxes withheld from wages of employees, together with any penalties and interest thereon, the form and contents of such bond and the amount thereof to be approved and fixed by the Department of Finance in such amount as shall be sufficient to protect the tax revenues of the State, except as otherwise provided in this section.

(1) The amount of the surety bond to be required of any nonresident contractor or subcontractor required to be licensed under Chapter 25 of this title shall be as follows: 6% of the contract or subcontract price on all contracts of $20,000 or more, or 6% of contractor's or subcontractor's estimated cost-and-profit under a cost-plus contract of $20,000 or more. When the aggregate of 2 or more contracts in 1 calendar year is $20,000 or more, the amount of the bond or bonds shall be 6% of the aggregate amount of such contracts. The Division of Revenue may by regulation prescribe cash bonds in lieu of the foregoing and shall deposit such cash bonds in a special fund of the State to be established for this purpose.

(2) The surety bond shall be filed before construction is begun in this State by the nonresident contractor or subcontractor on any contract the price of which is $20,000 or more, or the estimated cost and profit of which is $20,000 or more, and before construction is begun in this State by such nonresident contractor or subcontractor on any contract for less than $20,000 when the amount of the contract when aggregated with any other contracts on which construction was begun by such nonresident contractor or subcontractor in the same calendar year equals or exceeds $20,000.

(3) If the Department concludes that no bond is necessary to protect the tax revenue of this State, the requirements of this section may be waived in whole or in part by the Secretary of Finance or the Secretary's designated departmental representative. Any bond issued pursuant to this section shall remain in force until the liability thereunder is released by the Secretary or the Secretary's designated departmental representative.

(b) Any person or firm subject to this section shall notify the Department of the termination of business within this State within 20 days after such termination or, as to a construction contractor or subcontractor, within 20 days after the completion of every such construction project in this State.

(c) In the case of any person or firm failing or refusing to comply with this section, there shall be assessed by the Secretary of Finance a civil penalty of not more than $10,000 for each such occurrence.

(d) Any person or firm who wilfully or knowingly fails or refuses to comply with this section shall be guilty of a misdemeanor and shall upon conviction be punishable by a fine not to exceed $3,000, or imprisonment not to exceed 6 months, or both.

(e) The definition of the terms "nonresident contractor" or "subcontractor" as used in paragraphs (a)(1) and (2) of this section is the same as defined at § 2501 of this title.

(f) As to each specific construction project in this State, upon the request of the nonresident engaged as a contractor or subcontractor within the meaning of subsection (e) of this section who establishes to the satisfaction of the Department that such nonresident is in compliance with all the provisions of this section applicable to such nonresident, the Department shall issue to such nonresident a certificate of compliance on a form prescribed by the Department.

(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 in 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.

30 Del. C. 1953, § 375; 55 Del. Laws, c. 244, § 1; 57 Del. Laws, c. 194; 57 Del. Laws, c. 741, §§ 3B-3D; 65 Del. Laws, c. 476, §§ 1-5; 67 Del. Laws, c. 40, §§ 10, 13, 14; 70 Del. Laws, c. 186, § 1.;

(a) In the case of an individual serving in the armed forces of the United States, or serving in support of such armed forces, in an area designated by the President of the United States by Executive Order as a "combat zone" for purposes of § 112 of the Internal Revenue Code [26 U.S.C. § 112], at any time during the period designated by the President by Executive Order as the period of combatant activities in such zone for purposes of such section, or hospitalized as a result of injury received while serving in such an area during such time, the period of service in such area, plus the period of continuous hospitalization attributable to such injury, and the next 195 days thereafter, shall be disregarded in determining under this title (other than Chapters 30, 51 and 52), in respect of any tax liability (including any interest, penalty, additional amount or addition to the tax) of such individual:

(1) Whether any of the following acts was performed within the time prescribed therefor:

a. Filing any return of income or estate tax (except income tax withheld at source);

b. Payment or any income or estate tax (except income tax withheld at source) and/or any installment thereof or any other liability to the State in respect thereof;

c. Filing a protest with the Director of Revenue or filing a petition with the Tax Appeal Board to appeal a determination of the Director or filing an appeal of a decision rendered by the Tax Appeal Board;

d. Allowance of a credit or refund of any tax;

e. Filing a claim for credit or refund of any tax;

f. Assessment of any tax;

g. Giving or making any notice or demand for the payment of any tax, or with respect to any liability to the State in respect of any tax;

h. Collection of the amount of any liability in respect of any tax;

i. Bringing suit or commencing any action, including the filing of any certificate or warrant, by the State or any officer on its behalf, in respect of any liability in respect of any tax; and

j. Any other act required or permitted under this title (other than Chapters 30, 51 and 52) specified in regulations prescribed under this section by the Director of Revenue;

(2) The amount of any credit or refund (including interest).

(b) The provisions of this section shall also apply to the spouse of any individual entitled to the benefits of subsection (a) of this section. Except in the case of the combat zone designated for purposes of the Vietnam conflict, the preceding sentence shall not cause this section to apply to any spouse for any taxable year beginning more than 2 years after the date designated under the Internal Revenue Code as the date of termination of combatant activities in a combat zone.

(c) The period of service in the area referred to in subsection (a) of this section shall include the period during which an individual entitled to benefits under subsection (a) of this section is in a missing status, within the meaning of § 6013(f)(3) of the Internal Revenue Code [26 U.S.C. § 6013(f)(3)], or a successor provision.

(d) Exceptions:

(1) Notwithstanding the provisions of subsection (a) of this section, any action or proceeding authorized by §§ 1220 and 1221 [repealed] of this title, or successor provisions (regardless of the taxable year for which the tax arose), as well as any other action or proceeding authorized by law in connection therewith, may be taken, begun or prosecuted. In any other case in which the Director of Revenue determines that collection of the amount of any assessment would be jeopardized by delay, the provisions of subsection (a) of this section shall not operate to stay collection of such amount as authorized by law. There shall be excluded from any amount assessed or collected pursuant to this paragraph the amount of interest, penalty, additional amount and addition to tax, if any, in respect of the period disregarded under subsection (a) of this section. In any case to which this paragraph relates, if the Director of Revenue is required to give any notice to, or make any demand upon, any person, such requirement shall be deemed to be satisfied if the notice or demand is prepared and signed, in any case in which the address of such person last known to the Director is in any area for which United States post offices, under instructions of the Postmaster General are not, by reason of combatant activities, accepting mail for delivery at the time the notice or demand is signed. In such case the notice or demand shall be deemed to have been given or made upon the date it is signed.

(2) The assessment or collection of any tax or of any liability to the State in respect of any tax, or any action or proceeding by or on behalf of the State in connection therewith, may be made, taken, begun or prosecuted in accordance with law, without regard to the provisions of subsection (a) of this section, unless prior to such assessment, collection, action or proceeding it is ascertained that the person concerned is entitled to the benefits of subsection (a) of this section.

68 Del. Laws, c. 22, § 1; 71 Del. Laws, c. 353, § 12; 71 Del. Laws, c. 385, § 2.;