CHAPTER 8
STATE REVENUE INHERITANCE TAX
AN ACT to amend Chapter 6 of the Revised Code of the State of Delaware, as amended, relating to Inheritance Tax. Be it enacted by the Senate and House of Representatives of the State of Delaware in General Assembly met:
Section 1. That Chapter 6 of the Revised Code of the State of Delaware (1915), as amended, be and the same is hereby further amended by striking out all of 146. Section 109 to 152 Section 115, both inclusive, as amended, and by substituting in lieu thereof the following:
146. Sec. 109. Property subject to tax; exemptions :All property, real and personal, and every estate and interest therein, legal or equitable, belonging to any person who at the time of his death was a resident of the State of Delaware and which passes by will or by the intestate laws of this State, or by deed, grant, gift or settlement (except in cases of a bona fide purchase for full consideration in money or money's worth) made in contemplation of death or intended to take effect in possession or enjoyment at or after the death of the grantor, donor, or settlor to any per- son or persons, body politic, or corporate (whether resident or non-resident of this State) in trust or otherwise, shall be subject to the tax specified in this Act ; all tangible personal property having an actual situs in this State, and all real property actually situated in this State and every estate and interest therein, legal or equitable, belonging to any person who at the time of his death was not a resident of this State and which passes by will or intestacy, or by deed, grant, gift or settlement( except in cases of a bona fide purchase for full consideration in money or money's worth) made in contemplation of death or intended to take effect in possession or enjoyment at or after the death of the grantor, donor or settlor to any person or persons, body politic, or corporate (whether resident or non-resident of this State) in trust or otherwise, shall be subject to the tax specified in this Act.
Whenever any person or persons, institution or corporation shall exercise a general power of appointment derived Appointment deemed a from any disposition of property made either before or transfer after the passage of this Act, such appointment when made, shall be deemed a transfer subject to the tax specified in this Act in-the same manner as though the property to which such appointment relates belonged absolutely to the donee of such power and had been bequeathed or devised by such donee by will.
Whenever property is held by joint tenants, or by tenants by the entirety, or is deposited in banks or other institutions or depositaries in the joint names of two or more persons and payable to either or the survivor upon the death of in joint ac- counts. one of such persons, the right of the surviving joint tenant, tenant by the entirety, or other such person or persons, to Taxable, when the immediate ownership or possession and enjoyment of such property shall be deemed a transfer taxable under the provisions of this Act in the same manner as though the whole property to which such transfer relates had been owned by said tenants or persons as tenants in common and the share of the deceased joint tenant, tenant by the entirety or other such person, had been bequeathed or devised by will to the surviving joint tenant or tenants, tenant by the entirety, or other person or persons.
Whenever real property is referred to in this Act, it shall be deemed and held to mean real property actually situated within this State but not real property actually situated without this State, unless otherwise specified ; and Property whenever personal property is referred to in this Act it shall defined be deemed and held to mean all kinds of personal property whether tangible or intangible except tangible personal property having an actual situs without this State, unless otherwise specified.
The estates of persons who at the time of their death were non-residents of the State of Delaware, and the gifts and legacies in the last will and testament of every such non-resident, and the distributive shares of the intestate estate of every such non-resident shall be exempt from taxation in this State except the real property of such non-resident, Except real actually situated in the State and except also the tangible F4eigruut personal property of such non-resident having an actual situs in this State, which real property and tangible personal property having an actual situs in this State shall be subject to the provisions of this Act.
Any transfer of a material part of the property of a Disposition of decedent in the nature of a final disposition or distribution within two thereof, made by the decedent within two years prior to his death, without full consideration in money or money's worth, shall, unless shown to the contrary, be deemed to have been made in contemplation of death within the meaning of this Act.
The proceeds of policies of life insurance payable otherwise than to the estate of the insured and whether paid directly by the insurer to beneficiaries designated in the policies or to a trustee designated therein and held, managed and distributed by such trustees to or for the benefit of such persons or classes of persons under such plan and in such estates as may have been prescribed by the insured under agreement with such trustee shall be exempt from and not subject to the provisions of this Act.
Any property, estate or interest devised or bequeathed for charitable, educational, library, hospital, historical or religious purposes or for purposes of public benefit or improvement, shall be exempted from and not subject to the provisions of this Act.
147. Sec. 110. Tax how paid ; rates :The estate, interest or distributive share of every person, body politic or corporate in all property taxable under the provisions of this Act shall be subject to the tax prescribed by this Act. The tax imposed by this Act shall be computed upon the fair market value at the time of the death of the decedent of the Rates property subject to the tax at the rates hereinafter pre scribed:
Class A. Where the property or any interest or estate therein passes to or for the use of a husband or wife, the tax on such property, interest or estate shall be at the following rates:
On that part of its value exceeding Twenty Thousand Dollars ($20,000) and not exceeding Fifty Thousand Dollars ($50,000) one percent;
On that part of its value exceeding Fifty Thousand Dollars ($50,000) and not exceeding One Hundred Thousand Dollars ($100,000) two percent;
On that part of its value exceeding One Hundred Thousand Dollars ($100,000), and not exceeding Two Hundred $200,000 Thousand Dollars ($200,000), three percent;
On that part of its value exceeding Two Hundred Thousand Dollars ($200,000), four percent;
Class B. Where the property or any interest or estate therein passes to or for the use of a parent, grandparent, child by birth, wife or widow of a son or the husband or widower of a daughter, a child by legal adoption, or lineal descendant of the testator, intestate grantor, donor or settlor (hereinafter called the decedent), the tax on such property, interest or estate then shall be at the following rates:
On that part of its value exceeding Thirty Thousand 2% between Dollars and not exceeding One Hundred Thousand Dollars, two per cent;
On that part of its value exceeding One Hundred Thousand Dollars and not exceeding Two Hundred Thousand 0:0 00 Dollars, three per cent;
On that part of its value exceeding Two Hundred Thousand Dollars, four per cent;
Class C. Where the property or any interest or estate class 0 therein passes to or for the use of (1) a brother, or sister, either of the whole or half blood, of the decedent or of any brother or sister of the decedent's parent or grandparent, or (2) a lineal descendant of any such brother or sister, the tax shall be at the following rates:
On that part of its value exceeding One Thousand Dollars and not exceeding Twenty-five Thousand Dollars, two $25,000 per cent;
On that part of its value exceeding Twenty-five Thousand Dollars and not exceeding One Hundred Thousand Dollars, three per cent;
On that part of its value exceeding One Hundred Thousand Dollars and not exceeding Two Hundred Thousand Dollars, four per cent;
On that part of its value exceeding Two Hundred Thousand Dollars, five per cent. .
Class D. In case of property or any interest or estate therein passing to or for the use of any person, not described in Class A, Class B or Class C of this Section, the tax shall be at the following rates:
On that part of its value not exceeding Twenty-five Thousand Dollars, five per cent;
On that part of its value exceeding Twenty-five Thou- sand Dollars and not exceeding One Hundred Thousand Dollars, six per cent ;
On that part of its value exceeding One Hundred Thousand Dollars and not exceeding Two Hundred Thousand Dollars, seven per cent.
On that part of its value exceeding Two Hundred Thousand Dollars, eight per cent.
148. Sec. 111. Valuation of estate; determination of tax ; appeal :The estate or interest of every person, body politic or corporate, in all real and personal property, tax- able under the provisions of this Act, whether in remainder, reversion or otherwise, or in trust or otherwise, or conditioned upon the happening of a contingency or depending upon the exercise of a discretion, or subject to a power of appointment or otherwise, and all annuities taxable as aforesaid under the provisions of this Act, shall be valued by the Register of Wills for the purpose of determining the amount of tax to be collected from such person, body politic or corporate under the provisions of this Act. When the property shall pass in trust or otherwise, to one or more persons, bodies pontie or corporate, for a term of years or a greater estate or interest and with remainder or reversion to one or more other persons, bodies politic, or corporate, the estate or interest of each beneficiary shall be valued separately according to recognized tables of mortality.
In estimating the value of any estate or interest in property to the beneficial enjoyment or possession whereof there are persons or corporations presently entitled thereto, gen4 no allowance shall be made in respect of any contingent encumbrance thereon nor in respect to any contingency upon the happening of which the estate or property, or some part thereof, or interest therein might be abridged, defeated or diminished.
Estates or interests in expectancy which are contingent or defeasible shall be taxed at the rate which would obtain if such estate or interest fell into possession at the time of Bow the determination of the tax.
Where any beneficiary has died or may hereafter die before receiving his or her share of the estate to which he or she is entitled, and taxes on said share have not been assessed and paid, then such share shall be taxed only once Taxed as if and the tax shall be assessed on the property received from such share by each beneficiary thereof as if there had been no intermediate beneficiary.
It shall be the duty of the State Tax Commissioner, State Tax upon the request of the Register of Wills, promptly to render whatever assistance the Register may request in connection with the valuation of any estate or interest taxable unvaluing estate der the provisions of this Act, and in every case in which it is impossible to compute the present value of any interest in property subject to the tax imposed by this Act, the Register of Wills and the State Tax Commissioner may effect such settlement of the tax as shall be deemed to be for the best interests of the State of Delaware and the payment of the sum so agreed upon shall be a full satisfaction of such tax.
The Register of Wills shall, within thirteen months after Register at Wills to the death of the donor, grantor, devisor or intestate, compute and determine all taxes assessable under this Act, Time provided, however, that in case an estate shall, before the expiration of said period become involved in litigation the determination of which may affect the computation of the tax imposed by this Act, the Register of Wills may suspend the computation and determination of taxes assessable un- der this Act until the conclusion of the litigation. Immediately upon the determination of all taxes assessable under this Act, the Registrar of Wills shall give notice to the parties in interest, or to their attorneys of record, by posting the same in his office and by registered mail. Within Person aggrieved thirty days after the tax has been determined, any person may RPM), to Register within aggrieved by the determination may apply to the Register, 30 days for correction who may make such corrections of the taxes as he may determine proper. The said Register shall have power to hold hearings, summon witnesses and take testimony relative thereto.
In all cases the State, through the Attorney General, to Superior Court and the executor, administrator or taxable shall have the right to an appeal to the Superior Court of the County from the determination of the Register as to the amount of taxes to be paid under the provisions of this Act. Such appeal shall be taken to the term of the said Superior Court next following the expiration of twenty days from the final determination of the tax by the Register. In any such appeal Court to determine the Court shall determine what part of the costs shall be how costs payable paid by the State and what part shall be paid by the executor, administrator or taxable, as to it may appear just and equitable. It shall be the duty of the Register to notify the Attorney General whenever any such appeal shall be taken by any executor, administrator or taxable, and it shall be the duty of the Attorney General or one of his deputies to rep- resent the State in the hearing on the appeal.
In determining the value of any estate or interest taxable under the provisions of this Act, the Register of Wills shall make no deduction therefrom nor reduction thereof by certain taxes reason or on account of the payment (or liability for payment) of any Delaware inheritance, legacy or succession tax, or of any Delaware estate tax, or of any estate, inheritance, legacy or succession tax of the United States or of any State or jurisdiction outside of the State of Delaware.
The Register of Wills referred to in this Act shall be the Register of Wills of the County where letters testamentary or of administration have been granted on the estate of the donor, grantor, devisor or intestate from whom the property aforesaid shall have passed as set forth in Section 109 of this Act; but if no such letters have been granted, then the said Register shall be the Register of Wills of the County in which such property is or is situated.
149. Sec. 112. Collection and payment of tax return of real estate; receipts for tax; refund of taxes erroneously paid: All taxes imposed by this Act shall be due and payable within thirty days after the amount of tax has been finally determined in accordance with the provisions of this Lien Act and every such tax shall be and remain a lien upon the property subject to the tax until paid.
Any administrator, executor or trustee having in charge or trust any legacies or property for distribution subject to the said tax shall deduct the tax therefrom, or if the legacy or property be not money he shall collect a tax thereon upon the appraised value thereof from the legatee or person entitled to such property, and he shall not deliver or be compelled to deliver any specific legacy or property subject to tax to any person until he shall have collected the tax thereon ; and whenever any such legacy shall be charged upon or payable out of real estate, the heir, or devisee, before paying the same, shall deduct said tax therefrom and pay the same to the executor, administrator or trustee, and the same shall remain a charge on such real estate until paid, real estate and the payment thereof shall be enforced by the executor, administrator or trustee in the same manner that the said payment of said legacies might be enforced ; if, however, such legacy be given in money to any person for a limited period, the executor, administrator or trustee shall retain money for limited time the tax upon the whole amount, but if it be not in money he Tax retained on whole shall make application to the Register of Wills to make an apportionment if the case requires it of the sum to be paid money into his hands by such legatees and for such further order relative thereto as the case may require. Where a tax is imposed on an estate for life or for a term of years, or to terminate on the expiration of a certain period, and on any Tax when remainder or reversionary interest or interests, the tax on estate is limited such estate or interest as between the executor, trustee, tenant for life or for years, remainderman or reversioner and other beneficiaries, shall be charged to the corpus of the property in which such estate or estates exist, unless otherwise provided for by the testator or transferor, and shall be payable at once in the same manner and within the same time as if the estate or interest had vested in possession.
All executors, administrators and trustees shall be personally liable for the payment of taxes and where proceedings for collection of taxes assessed be had, said executors, administrators and trustees shall be personally liable for the expenses, costs and fees of collection. They shall have full power to sell so much of the property of the decedent as will enable them to pay said tax in the same manner as they may be enabled to do by law, for the payment of debts of their testators and intestates.
All taxes collected by any executor or administrator as aforesaid shall be forthwith paid over to the Register of Wills.
It shall be the duty of every executor or administrator within two months after the granting of letters testamentary, or of administration, to file in the office of the Register of Wills of the County in which said letters have been granted, a statement in writing setting forth a general description of every parcel of real estate in this State of which the decedent died seised, and the name of each party entitled to any estate or interest in any parcel of said real estate, and relationship, if any, of said party, to the decedent. Such statement shall be supported by the oath or affirmation of said executor or administrator that the facts therein contained are true according to his best information and belief. Every such statement shall be recorded by the Register of Wills in a separate book to be kept by him for that purpose and which shall be known as the "Inheritance and Succession Docket," and shall be duly indexed. Whenever Inheritance any parcel of real estate or any estate or interest therein described in the statement of the executor or administrator aforesaid, shall be subject to tax under the provisions of said section, the Register of Wills shall make an entry in the docket aforesaid that said real estate is subject to tax and in the event of an appeal to the Superior Court as aforesaid, shall further note in said docket the fact of said appeal. When any tax as aforesaid shall be paid and discharged, the said Register shall make a note thereof in the said docket.
It shall be the duty of the State Treasurer from time to time to examine every such docket as aforesaid, and to notify the Attorney General of any failure on the part of any Register of Wills or of any executor or administrator to perform the duties imposed upon them by this Act. The Attorney General shall in case of such failure take proper proceedings against the party or parties delinquent.
If for any cause there should be no executor or administrator to receive the tax imposed under the provisions of this Act the party liable for said tax shall have the right to pay the same direct to the Register of Wills of the proper county and such payment shall operate as a discharge of said tax.
Every Register of Wills receiving any tax under the Provisions of this Act shall give the person paying the same duplicate receipts therefor, one of which shall be forwarded by the person so paying as aforesaid to the State Treasurer, to be by him preserved, and either of said duplicate receipts shall be evidence in suits upon the bond of such Register suits against Register to recover the tax so by him received.
When any amount of tax imposed under this Act shall have been paid erroneously it shall be lawful for the State Treasurer, on satisfactory proof rendered to him of said erroneous payment, and upon the recommendation of the Register of Wills of the County wherein such tax shall have been collected, to refund and pay to the executor, administrator or trustee, person or persons who have paid any such tax in error, the amount of such tax so paid, provided that all applications for the repayment of said tax shall be made within two years from the date of said payment.
150. Sec. 113. Liability on executor's or administrator's bond :The bond of an executor or administrator shall be liable for all money he may receive for taxes, or for the proceeds of the sale of any estate or interest received by him under this Act, and if any executor or administrator shall fail to perform any of the duties imposed upon him under the provisions of this Act, the Register of Wills grant- ing the letters of administration may revoke the same, and his bond shall be liable, and the same proceedings shall be had as if his administration had been revoked for other cause. The powers and duties of an administrator de bonis non or de bonis non with the will annexed; shall be the same under this Act as an executor or administrator, and he shall be subject to the same liabilities.
151. Sec. 114. Register of Wills ; returns by of tax collected, to State Treasurer; accounting by ; liability upon bond of; removal from office, when; appropriation of taxes monthly collected :It shall be the duty of the several Registers of Wills in the State to make return to the State Treasurer on or before the tenth day of each and every month in each year, of all sums of money received by them as taxes under the provisions of this Act during the preceding calendar month, and to pay over to said State Treasurer the amounts so by them received respectively, at the time of making such returns, and if any Register of Wills shall fail to pay, as required by this Section, the State Treasurer shall give notice to the Attorney General of the State, whose duty it shall be to institute suit on the official bond of such Register of Wills, for the use of the State to recover the amount due from such Register of Wills and in such suit the amount appearing to be due, with interest thereon, and costs, shall be recovered, which recovery shall be evidence of misbehavior in office, and upon conviction thereof, such Register of Wills shall be removed from office.
The official bond of every Register of Wills of this State Bond of shall be deemed and held to embrace and include the faithful performance by such Register of all and every the duties imposed upon him by this Act.
Of the money raised under the provisions of this Act all that is collected each year, and from year to year, in excess of One Hundred Thousand Dollars, is hereby appropriated to the sinking fund of the State, and shall, by the State Sinking Fund Treasurer, be credited to the sinking fund of this State and shall become and constitute a part of that fund.
152. Sec. 115. Repeals, retroactive provisions; unconstitutionality or invalidity: 146. Sec. 109 to 152. Sec. 115, Chapter 6 of the Revised Code of the State of Delaware (1915), both inclusive, as amended by Chapter 7, Volume 29 of the Laws of Delaware, entitled "State Revenue. Inheritance Tax," Chapter 7, Volume 35 of the Laws of the State of Delaware, entitled "An Act to amend Chapter 6 of the Revised Code of Delaware (1915), relating to the Inheritance Tax, as amended by Chapter 7 of Volume 29 of the Laws of Delaware," shall be continued in full force and effect as to all taxes, assessments, proceedings, suits co in and matters arising out of or in connection with estates and interests taxable thereunder and shall so continue until such time as all of said taxes, assessments, proceedings, suits or matters shall have been finally collected, determined and disposed of at which time said 146. Sec. 109 to 152. Sec. 115, both inclusive, as amended, shall be repealed.
All acts or parts of acts inconsistent with the provisions of this Act shall be and the same are hereby repealed.
The exemptions provided in this Act shall be deemed Exemptions retroactive to be retroactive so far as concerns the property, and estates Exception and interests therein, of decedents dying after the sixth day of May, A. D. 1929, except where the inheritance, transfer or succession taxes thereon were paid and discharged prior to the approval of this Act.
If any clause, sentence, paragraph or part of this Act shall, for any reason, be adjudged by any Court of competent jurisdiction, to be invalid, such judgment shall not der of Act affect, impair or invalidate the remainder of this Act but shall be confined in its operation to the clause, sentence, paragraph or part thereof directly involved in the controversy in which such judgment shall have been rendered.
No caption of any Section or set of Sections of this Act Interpretation shall in any way affect the interpretation of this Act or any part thereof.
Approved April 9, 1931.