CHAPTER 351
AN ACT TO AMEND TITLE 30, DELAWARE CODE OF 1953, RELATING TO THE INCOME TAX AND PROVIDING FOR THE DECLARATION AND PAYMENT OF ESTIMATED INCOME TAX.
Be it enacted by the General Assembly of the State of Delaware:
Section 1. Chapter 11, Title 30, Delaware Code of 1953, is amended by adding thereto a new Subchapter VIII to read:
SUBCHAPTER VIII. DECLARATION OF ESTIMATED INCOME TAX
§ 1201. Declaration of Estimated Income Tax
(a) Every taxable who in any taxable year commencing after December 31, 1961, can reasonably expect to receive net income taxable under Chapter 11 of this Title, in excess of $6,000, from sources other than salaries or wages from which a withholding for Delaware Income Tax is made under provisions of Chapter 11, Subchapter VII, of this Title, shall file with the State Tax Department a declaration of his estimated tax for such taxable year.
(b) In the declaration the taxable shall state:
(1) The amount which he estimates as the tax due under Section 1111 of this Title, with respect to the taxable year;
(2) The amount which he estimates as the credits to which he will be entitled for taxes withheld under Chapter 11, Subchapter VII, of this Title during the taxable year;
(0) The excess of paragraph (1) over paragraph (2), which for the purposes of this Subchapter shall be considered the estimated tax for the taxable year; and
(1) Such other information as the commissioner may prescribe.
(c) The declaration shall be filed on or before May 31 of the taxable year, except that if the requirements of Section 1201 of this Subchapter are first met—
(1) After April 1, and before July 2, the declaration shall be filed on or before August 31; or
(2) After July 1, and before October 2, the declaration shall be filed on or before November 30;
(3) After October 1, the declaration shall be filed on or before February 28 of the succeeding year.
(d) The Commissioner shall promulgate regulations governing reasonable extensions of time for filing declarations and paying the estimated tax.
(e) A taxable may make amendments to any declaration of estimated tax in compliance with regulations prescribed by the Commissioner.
(f) If on or before February 28 of the succeeding year, a taxable shall file a return for the year for which the declaration is required and shall pay in full the amount computed on the return as payable, then, under regulations prescribed by the Commissioner, if the declaration is not required to be filed during the taxable year but is required to be filed on February 28, such return shall, for the purposes of this Section, be considered as such declaration, if the tax shown on the return, reduced by credits permitted in (b) above, is greater than the estimated tax shown in a declaration previously made or in the last amendment thereof, such return shall, for the purposes of this Section, be considered as the amendment of the declaration permitted by this Section to be filed on or before February 28.
(g) In the case of a husband and wife, a single declaration of estimated tax may be made by them jointly; but in such case the liability with respect to the estimated tax shall be joint and several. No joint declaration may be made unless at the time when the declaration is due, the husband and wife are lawfully married and are not separated by a decree of divorce or separate maintenance. If a joint declaration is made but a joint return is not made for the taxable year, the estimated tax for such year may be treated as the estimated tax of either the husband or the wife, or may be divided between them.
§ 1202. Rates
The rates of tax to be applied and used in computing the amount of tax due on the declaration of estimated tax, shall be the rates of tax imposed by Section 1111, of this Title.
§ 1203. Payment of estimated tax
(a) The estimated tax declared under Section 1201 of this Subchapter shall be paid as follows:
(1) If the declaration is filed on or before May 31 of the taxable year, the estimated tax shall be paid in four equal installments. The first installment shall be paid at the time of filing of the declaration, the second on August 31, the third on November 30 of the taxable year, and the fourth on February 28 of the succeeding taxable year.
(2) If the declaration is filed after May 31, and not after August 31 of the taxable year, and is not required by Section 1201 to be filed on or before May 31 of the taxable year, the estimated tax shall be paid in three equal installments. The first installment shall be paid at the time of filing the declaration, the second on November 30, and the third on February 28 of the succeeding taxable year.
(3) If the declaration is filed after August 31, and not after November 30 of the taxable year, and is not required by Section 1201 to be filed on or before August 31 of the taxable year, the estimated tax shall be paid in two equal installments. The first installment shall be paid at the time of filing of the declaration, and the second on February 28 of the succeeding taxable year.
(4) If the declaration is filed after November 30 of the taxable year, and is not required by Section 1201 to be filed on or before November 30 of the taxable year, the estimated tax shall be paid in full at the time of filing of the declaration.
(5) If the declaration is filed after the time prescribed in Section 1201 including extensions of time for such filing, paragraph (1), (2) and (3) of this Subsection shall not apply, and there shall be paid at the time of such filing all the installments which would have been payable on or before such time if the declaration had been filed within the time prescribed in Section 1201, and the remaining installments shall be paid at the times which, and in the amounts which, they would have been payable if the declaration had been so filed.
(6) If any amendment is filed, the remaining installments, if any, shall be ratably increased or decreased as the case may be, to reflect the respective increase or decrease in the estimated tax by reason of such amendment. If any amendment is made after November 30 of the taxable year, any increase in the estimated tax by reason thereof shall be paid at the time of making such amendment.
(7) At the election of the taxable, any installment of the estimated tax may be paid prior to the date prescribed for its payment.
(b) The application of this Section to estates of deceased persons, and to other taxables having taxable years of less than 12 months, shall be in accordance with regulations prescribed by the Commissioner.
§ 1204. Farmers
In the case of a taxable whose estimated gross income from farming for the taxable year is equal to at least two-thirds of his total gross income from all sources for the taxable year, in lieu of the time prescribed in Section 1201 of this Subchapter, the declaration for the taxable year may be made at any time on or before February 28 of the succeeding year. If such taxable makes a declaration of estimated tax after November 30 of the taxable year, and on or before February 28 of the succeeding taxable year, the estimated tax shall be paid in full at the time of the filing of the declaration.
§ 1205. Fiscal Years
The provisions of Sections 1201, 1203 and 1204 of this Subchapter shall be applicable in all respects to taxables reporting on a fiscal year basis, except that there shall be substituted for the months specified in such sections, the months corresponding thereto in accordance with regulations prescribed by the Commissioner.
§ 1206. Credit of Payments
All payments of estimated tax made by any taxable pursuant to Section 1203 of this Subchapter shall be deemed and credited as payments on account of the tax imposed on income for the taxable year under Section 1111 of this Title.
§ 1207. Penalty for Under-statement of Declaration
(a) In the case of any under-payment of estimated tax, except as provided in Subsection (b) of this Section, there shall be added to the tax due under Chapter 11, of this Title for the taxable year, an amount determined at the rate of four per cent per annum upon the amount of the under-payment for the period of the under-payment. For the purposes of this Subsection "the amount of the under-payment" shall be the excess of the amount of the installment which would be required to be paid if the estimated tax were equal to seventy per cent, or sixty-six and two-thirds per cent in the case of a farmer referred to in Section 1204 of this Subchapter of the tax shown on the return for the taxable year, or, if no return is filed seventy per cent or sixty-six and two-thirds per cent, as the case may be, of the tax for such year over the amount, if any, of the installment paid on or before the last date prescribed for such payment. For the purposes of this Subsection "the period of under-payment" is the period from the date the installment was required to be paid to the 30th day of the fourth month following the close of the taxable year, or with respect to any portion of the under-payment, to the date on which such portion is paid, whichever is earlier. A payment of estimated tax on any installment date shall be considered a payment of any previous installment only to the extent that such payment exceeds the amount of the installment upon such installment date.
(b) Notwithstanding the provisions of Subsection (a), above, the addition to the tax with respect to any under-payment of any installment shall not be imposed if the total amount of all payments of estimated tax made on or before the last date prescribed for the payment of such installment shall equal or exceed the lesser of (1) or (2) as follows—
(1) The amount which would have been required to be paid on or before such date if the estimated tax were the lesser of (i) or (ii) as follows
(i) The tax shown on the return of the taxable for the preceding taxable year, if a return showing a liability for tax was filed by the taxable for the preceding taxable year, and such preceding year was a taxable year of twelve months, or
(ii) An amount equal to the tax computed, at the rates applicable to the taxable year on the basis of the taxable's status with respect to his personal exemption and deductions for spouse and dependents for the taxable year, but otherwise on the basis of the facts shown on his return for, and the law applicable to, the preceding taxable year, or
(2) An amount equal to ninety per cent of the tax computed, at the rates applicable to the taxable year, on the basis of the actual taxable income for the months in the taxable year ending before the month in which the installment is required to be paid.
(c) For the purposes of applying this Section the estimated tax shall be computed without any reduction for the amount which the individual estimates as his credit under Section 1201 (b) of this Subchapter, and the amount of credit allowed under said Section 1201 (b) for the taxable year shall be deemed a payment of the estimated tax, and an equal part of such amount shall be deemed paid on each installment date, determined under Section 1203 for such taxable year, unless the taxable shall establish the dates on which all amounts were actually withheld, in which case the amounts so withheld shall be deemed payments of estimated tax on the dates on which such amounts were actually withheld.
(d) For the purposes of Subsections (a) and (b) of this Section, the term "tax" means the tax imposed by Chapter 11, of this Title, reduced by the credit against the tax allowed under this Title.
§ 1208. Not Applicable to Estates or Trusts
The provisions of this Subchapter shall not apply to an estate or trust.
§ 1209. Administration by Commissioner
The administration of this Subchapter is hereby vested in the Commissioner. All forms necessary and proper for the enforcement of this Subchapter shall be prescribed and furnished by the State Tax Department. The Commissioner may prescribe rules and regulations, not inconsistent with the law, to carry into effect the provisions of this Subchapter, which regulations and rulings, when reasonably designed to carry out the intent and purpose of this Subchapter, shall be prima facie evidence of its proper interpretation.
Section 2. Sections 2 and 3 of Chapter 104, Volume 53, Laws of Delaware, are hereby repealed.
Approved April 17, 1962.