CHAPTER 160
FORMERLY
HOUSE SUBSTITUTE NO. 1 FOR HOUSE BILL NO. 350
AS AMENDED BY HOUSE AMENDMENT NO. 1
AN ACT TO AMEND CHAPTER 11, TITLE 5 OF THE DELAWARE CODE RELATING TO BANK FRANCHISE TAXES.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (Three-fifths of the members elected to each House concurring therein):
Section 1. Amend Section 1101, Title 5 of the Delaware Code by designating the current text thereof ending with the words and punctuation ", reduced by" as subsection "(a)", by designating current subsections (a), (b), (c) and (d) of said section as adopted by 64 Delaware Laws, Chapter 43 as paragraphs (1), (2), (3), and (4) respectively of said subsection, and by adding new subsections (b), (c), (d) and (e) as follows:
"(b) In lieu of the provisions of subsection (a), for years beginning after December 31, 1982, a franchise tax is imposed on the "taxable income" of banks, trust companies, and national banks (computed on a basis that consolidates with the income of such bank, trust company, or national bank for the tax year involved, the income of all subsidiary corporations of such bank, trust company, or national bank in accordance with generally accepted accounting principles). The "taxable income" on which such tax is imposed shall be equal to the product of (I) and (2) as follows:
(1) net operating income before taxes increased by the amount of securities gains before taxes and reduced by:
(A) securities losses before taxes;
(B) net operating income before taxes from subsidiaries otherwise subject to income taxation under Delaware law;
(C) net operating income before taxes as shown on the books of account of any non-United States branch office established:
(I) pursuant to Section 771 of this Title in the case of a state bank or trust company; or
(II) pursuant to federal law in the case of a national bank;
provided that in either case at least 80 percent of the gross income of such non-United States branch office constitutes "income from sources without the United States" as defined under Section 862(a) of the Internal Revenue Code of 1954, as amended, or any successor provisions thereto;
(D) the gross income derived from international banking transactions (as defined in Section 101 of Title 5 of this Code) after subtracting therefrom any expenses or other deductions attributable thereto; a=
(E) the gross income of an international banking facility (as defined in Section 101 of Title 5 of this Code) less any expenses or other deductions attributable thereto.
(2) multiplied by the factor .56.
(c) Whenever the phrase "international banking facility" is incorporated by reference in Title 30 of the Delaware Code, it shell have the meaning of "international banking transaction" provided in Section 101 (9) of this Title as the same may from time to time be amended.
(d) Whenever the phrase "international banking transaction" is incorporated by reference in Title 30 of the Delaware Code, it also shall, have the meaning of "international banking transaction" provided in Section 101 (9) of this Title as the same may from time to time be amended.
(e) Notwithstanding the provisions of paragraph (b) of this Section and Section 1105 of this Title, if, for any tax year beginning after December 31, 1982 and ending prior to January I, 1985, franchise taxes calculated on taxable income as defined under paragraph (b) shall be more or less than taxes calculated on net income as defined in paragraph (a), but without any deduction for contributions to net income for subsidiaries qualifying for an exemption under 30 Delaware Code, Section 1902(b)(8), then a portion of such difference shall be: (1) subtracted from (if more), or (ii) added to (If less) the taxes calculated on taxable income as defined in paragraph (b). The portion of any such difference to be subtracted or added as aforesaid, shall be as follows: 66 2/3 percent for tax year 1983, and 33 1/3 percent for tax year 1984.
Section 2. Amend Section 1102 of Title 5 of the Delaware Code by deleting the period at the end of the first sentence and by adding thereto the following:
"...and such other true statement, in such form as shall be specified by the State Bank Commissioner, verified by oath setting forth the "taxable income" of such bank or trust company as defined in this Chapter."
Section 3. Amend Section 1103 of Title 5 of the Delaware Code by deleting the current Subsection (a) and replacing it with a new Subsection (a) as follows:
"(a) The State Bank Commissioner shall, after the 31st day of January and prior to the 10th day of March In each year, ascertain from an inspection of the statements filed for December 31 in accordance with Section 1102 of this Title, and from any other sources of information which are open to him, the names and places of business of all banks and trust companies and national banks in this State, the amount of net income and/or taxable income, as defined in Section 1101 of this Chapter, as applicable, and the amount of tax levied thereon in accordance with this Chapter."
Section 4. Amend Section 1105, Title 5 of the Delaware Code by deleting the current Section and replacing it with the following language:
'The rate of tax upon the net income for years beginning before January 1, 1983, or taxable income for years beginning after December 31, 1982, as defined in this Chapter, of banks, trust companies, and national banks shall be as follows: 8.7% of the amount of net income for years beginning before January 1, 1983, or taxable income for years beginning after December 31, 1982, as applicable, not in excess of $20,000,000; 6.7% of the amount of net income for years beginning before January 1, 1983, or taxable income for years beginning after December 31, 1982, as applicable, in excess of $20,000,000, but not in excess of $25,000,000; 4.7% of the amount of net income for years beginning before January 1, 1983, or taxable income for years beginning after December 31, 1982, as applicable, in excess of $25,000,000, but not in excess of $30,000,000; 2.7% of the amount of net Income for years beginning before January 1, 1983, or taxable income for years beginning after December 31, 1982, as applicable, in excess of $30,000,000."
Section 5. This Act shall take effect in accordance with the provisions of Delaware Law.
Approved July 13, 1983.