Chapter 11. Taxation
TITLE 5
Banking
Banks and Trust Companies
CHAPTER 11. TAXATION
§ 1101. Tax on net earnings.
(a) A franchise tax is hereby imposed on the "taxable income" of banking organizations and trust companies (computed on a basis that consolidates with the income of such banking organization or trust company for the tax year involved, the income of all subsidiary corporations of such banking organization or trust company in accordance with generally accepted accounting principles; provided, however, that the income of subsidiary corporations of out-of-state banks that operate resulting branches in this State shall be consolidated with the income of such resulting branches only if such subsidiaries make the election provided for in subsection (f) of this section). For the purposes of this chapter, "out-of-state bank" shall have the same meaning as in § 795 of this title. Also for the purposes of this chapter, "resulting branch" shall have the same meaning as in § 795 of this title and, in addition, shall also mean the branch offices in this State of out-of-state banks. The "taxable income" on which such tax is imposed shall be equal to the product of (1) and (2) as follows:
(1) Net operating income before taxes increased by the amount of securities gains before taxes plus, in the case of a banking organization that is a resulting branch in this State of an out-of-state bank, the resulting branch imputed capital addback determined under subsection (i) of this section and reduced by:
a. Securities losses before taxes;
b. That portion of net operating income before taxes, verifiable by documentary evidence, from any subsidiary or foreign branch established within the United States pursuant to § 771 of this title or other branch established within the United States but outside of this State pursuant to federal law or other applicable law of this State which is:
1. Otherwise subject to income taxation under Delaware law;
2. Derived from business activities carried on outside the State and subject to income taxation under the laws of another state, and that portion of net operating income before taxes from any such entity other than a Delaware-chartered banking organization or a national bank located in this State (as defined in § 801(5) of this title) which entity is a banking organization and which is subject to income taxation under the laws of another state; provided, however, that in the case of any subsidiary engaged in the sale, distribution or underwriting of, or dealing in, securities, the amount of income excluded pursuant to this sub-subparagraph b.2. shall in no event exceed 50 percent of such subsidiary's net operating income before taxes; or
3. Derived from business activities carried on outside the State, which subsidiary, foreign branch or other branch established outside of this State is subject to shares tax under the laws of another state; provided however, that in the case of any subsidiary engaged in the sale, distribution or underwriting of or dealing in securities, the amount of income excluded pursuant to this sub-subparagraph shall in no event exceed 50 percent of such subsidiary's net operating income before taxes;
c. Net operating income before taxes as shown on the books of account of any non-United States branch office established: (i) Pursuant to § 771 of this title in the case of a state banking organization; 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 § 862(a) of the Internal Revenue Code of 1986, as amended [26 U.S.C. § 862(a)], or any successor provisions thereto;
d. The gross income derived from international banking transactions (as defined in § 101 of this title) after subtracting therefrom any expenses or other deductions attributable thereto;
e. The gross income of an international banking facility (as defined in § 101 of this title) less any expenses or other deductions attributable thereto;
f. The interest income from obligations of volunteer fire companies; and
g. Any examination fee paid to the Office of the State Bank Commissioner pursuant to § 127(a) of this title.
(2) Multiplied by the factor .56.
For purposes of this subsection, a resulting branch in this State of an out-of-state bank or foreign bank, or a foreign bank branch, foreign bank limited purpose branch, foreign bank agency or a federal branch or agency (all as defined in § 101 of this title) shall be treated as if it were a corporation. The Commissioner shall prescribe such rules and regulations as may be deemed necessary in order that the tax liability of any resulting branch in this State of an out-of-state bank or foreign bank, or any foreign bank branch, foreign bank limited purpose branch, foreign bank agency or federal branch or agency under this subsection may be returned, determined, computed, assessed, collected and adjusted, in such manner as to clearly reflect the tax liability and the various factors necessary for the determination of such liability, and in order to prevent avoidance of such tax liability.
(b) A franchise tax is hereby imposed on the "taxable income" of federal savings banks not headquartered in this State but maintaining branches in this State, verifiable by documentary evidence. The "taxable income" on which tax is imposed shall be equal to the net operating income of the branch or branches located in Delaware before taxes increased by the amount of securities gains before taxes and reduced by the amount of securities losses before taxes and by the interest income from obligations of volunteer fire companies.
(c) Whenever the phrase "international banking facility" is incorporated by reference in Title 30, it shall have the meaning of "international banking transaction" provided in § 101 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, it also shall have the meaning of "international banking transaction" provided in § 101 of this title as the same may from time to time be amended.
(e) Any subsidiary corporation of a banking organization or trust company which subsidiary is not itself a banking organization or trust company may elect, in such manner as the State Bank Commissioner shall prescribe, to be taxed in accordance with Chapter 19 of Title 30. If such election is made, such electing subsidiary corporation shall not be considered a "subsidiary corporation" for purposes of subsection (a) of this section. Such election shall not be available to any corporation which is described in § 1901(2) or § 1902(b)(8) of Title 30 or any corporation engaged in the sale, distribution or underwriting of, or dealing in, securities.
(f) For purposes of subsection (a) of this section, any corporation other than a subsidiary engaged in activities authorized under § 761(a)(14) or § 1661(a)(14) of this title 80 percent of whose total combined voting power of all classes of stock entitled to vote is owned by an out-of-state bank that operates a resulting branch in this State or, directly or indirectly, by a bank holding company that also directly or indirectly owns all the stock of a Delaware chartered banking organization or trust company, a national bank located in this State or an out-of-state bank that operates a resulting branch in this State may elect, in such manner as the State Bank Commissioner shall prescribe, to be treated as a "subsidiary corporation" of a banking organization or trust company. Such election shall not be effective unless the electing corporation, together with its "affiliates" as that term is defined in subchapter V of Chapter 7 of this title, employs by the end of its taxable year following the taxable year in which the election is made at least 200 persons within this State. When applicable, the income of such electing corporation shall be consolidated with the taxable income of the resulting branch in this State of an out-of-state bank in accordance with generally accepted accounting principles.
(g) Notwithstanding any of the foregoing, the tax imposed under this section shall not be imposed upon any "taxable income" derived from acting as an insurer pursuant to § 761(a)(14) or § 1661(a)(14) of this title or from acting as an insurer pursuant to Title 18.
(h) For purposes of this chapter, an Edge Act Corporation as defined in § 101(4)c. of this title which is not "engaged in banking" as defined at 12 C.F.R. § 211.2(f), or any subsidiary thereof, may elect to be taxed in accordance with Chapter 19 of Title 30 in lieu of this chapter.
(i)(1) The resulting branch imputed capital addback shall be the product of the greater of the products determined under paragraphs (2) and (3) of this subsection and the average of the monthly short-term applicable federal rates, as determined under § 1274(d) of the Internal Revenue Code of 1986, as amended (26 U.S.C. § 1274(d)), or any successor provisions thereto, and as published each month in the Internal Revenue Bulletin, for the 12-month period preceding the date on which the resulting branch imputed capital addback is being determined.
(2) The product of (i) the deposits recorded on the books of the resulting branch in this State, and (ii) the minimum risk-based capital ratio (expressed as a decimal fraction) that a resulting branch in this State would be required to maintain, if it were a bank, in order to be deemed "adequately capitalized" pursuant to Title 12 Code of Federal Regulations, Part 325.
(3) The product of (i) the value of that portion of the total risk-weighted assets (as defined in Title 12 of the Code of Federal Regulations Part 325) of the out-of-state bank operating the resulting branch in this State that are attributable to such resulting branch, and (ii) the minimum risk-based capital ratio (expressed as a decimal fraction) that a resulting branch in this State would be required to maintain, if it were a bank, in order to be deemed "adequately capitalized" pursuant to Title 12 of the Code of Federal Regulations Part 325.
59 Del. Laws, c. 434, § 1; 63 Del. Laws, c. 2, § 6; 64 Del. Laws, c. 43, § 6; 64 Del. Laws, c. 160, § 1; 64 Del. Laws, c. 328, §§ 1, 2; 64 Del. Laws, c. 442, § 1; 64 Del. Laws, c. 461, §§ 3-5; 65 Del. Laws, c. 444, §§ 4, 5; 66 Del. Laws, c. 23, §§ 1, 2; 66 Del. Laws, c. 27, §§ 10, 11; 67 Del. Laws, c. 223, §§ 14, 15; 68 Del. Laws, c. 303, §§ 25-28; 70 Del. Laws, c. 6, §§ 6, 7; 70 Del. Laws, c. 16, § 3; 70 Del. Laws, c. 112, §§ 52-58; 70 Del. Laws, c. 327, §§ 28-31; 71 Del. Laws, c. 19, §§ 54, 55; 71 Del. Laws, c. 25, § 34; 71 Del. Laws, c. 254, §§ 14-16; 72 Del. Laws, c. 15, § 15; 72 Del. Laws, c. 35, § 6; 76 Del. Laws, c. 234, § 1.;
§ 1101A. Alternative annual franchise tax; rate of taxation.
(a) Any banking organization or trust company required to pay a franchise tax pursuant to § 1101 of this title may annually elect, on its original return or on an amended return filed within 180 days of the due date of its original return, to pay an "alternative franchise tax" pursuant to this section, in lieu of payment of the tax on taxable income provided for by § 1101 of this title.
(b) "Alternative franchise tax" shall be the sum of bank income tax liability provided for in subsection (c) of this section below, plus the location benefit tax liability provided for in subsection (d) of this section below. Alternative franchise tax shall become due and payable pursuant to § 1104 of this title.
(c) Bank income tax liability. -- A banking organization or trust company electing to pay the alternative franchise tax shall have a bank income tax liability based upon its elective income tax base, computed as follows:
(1) "Entire net income" shall be the net operating income before taxes of the banking organization or trust company, computed on a basis that consolidates with the income of such banking organization or trust company for the tax year involved, the income of all subsidiary corporations of such banking organization or trust company in accordance with generally accepted accounting principles; provided, however, that the income of subsidiary corporations of out-of-state banks that operate resulting branches in this State shall be consolidated with the income of such resulting branches only if such subsidiaries make the election provided for in paragraph (5) of this subsection. "Net operating income before taxes" shall be computed in accordance with principles used by the Federal Financial Institutions Examination Council or other appropriate federal authority and reported to the Bank Commissioner pursuant to § 904 of this title, reduced by the following:
a. Net operating income before taxes as shown on the books of account of any non-United States branch office established:
1. Pursuant to § 771 of this title in the case of a state banking organization; or
2. Pursuant to federal law in the case of a national bank;
provided, that in either case at least 80% of the gross income of such non-United States branch office constitutes "income from sources without the United States" as defined under § 862(a) of the Internal Revenue Code of 1986 [26 U.S.C. § 862(a)], as amended, or any successor provisions thereto;
b. The gross income derived from international banking transactions (as defined in § 101 of this title) after subtracting there from any expenses or other deductions attributable thereto;
c. The gross income of an international banking facility (as defined in § 101 of this title) less any expenses or other deductions attributable thereto;
d. Without limitation of the foregoing, any income earned from business activities conducted outside the United States;
e. The interest income from obligations of volunteer fire companies;
f. Any examination fee paid to the Office of the State Bank Commissioner pursuant to § 127(a) of this title; and
g. Income derived from acting as an insurer pursuant to § 761(a)(14) of this title or § 1661(a)(14) of this title or from acting as an insurer pursuant to Title 18.
(2) Any subsidiary corporation of an electing banking organization or trust company which subsidiary is not itself a banking organization or trust company may elect, in such manner as the State Bank Commissioner shall prescribe, to be taxed in accordance with Chapter 19 of Title 30. If such election is made, such electing corporation shall not be considered a "subsidiary corporation" for purposes of subsection (c) of this section. Such election shall not be available to any corporation which is described in § 1901(2) or § 1902(b)(8) of Title 30 or any corporation engaged in the sale, distribution or underwriting of, or dealing in, securities.
(3) Any corporation, other than a subsidiary engaged in activities authorized under § 761(a)(14) of this title or § 1661(a)(14) of this title (relating to acting as an insurer and transacting the business of insurance), 80% of whose total combined voting power of all classes of stock entitled to vote is owned by an out-of-state bank that operates a resulting branch in this State or, directly or indirectly, by a bank holding company that also directly or indirectly owns all the stock of a Delaware chartered banking organization or trust company, a national bank located in this State or an out-of-state bank that operates a resulting branch in this State, may elect, in such manner as the State Bank Commissioner shall prescribe, to be treated as a "subsidiary corporation" of an electing banking organization or trust company. Such election shall not be effective unless the electing corporation, together with its "affiliates" as that term is defined in subchapter V of Chapter 7 of this title, employs by the end of its taxable year following the taxable year in which the election is made at least 200 persons within this State.
(4) For purposes of this section, an "Edge Act corporation" as defined in § 101(4)c. of this title which is not "engaged in banking" as defined at 12 C.F.R. § 211.2(f), or any subsidiary thereof, may elect to be taxed in accordance with Chapter 19 of Title 30 in lieu of this section.
(5) For purposes of this section, a resulting branch in this State of an out-of-state bank shall be treated as if it were a corporation. The Commissioner shall prescribe such rules and regulations as may be deemed necessary in order that the tax liability of any resulting branch in this State of an out-of-state bank may be returned, determined, computed, assessed, collected and adjusted, in such manner as to clearly reflect the tax liability and the various factors necessary for the determination of such liability, and in order to prevent avoidance of such tax liability.
(6) "Elective income tax base" shall mean the entire net income of a banking organization or trust company which is apportioned to the State of Delaware in accordance with the following provisions:
a. If the entire business of a banking organization or trust company (and each of its subsidiary corporations the income of which is included in entire net income) is transacted or conducted within this State, 100% of the entire net income shall be apportioned to this State. If the business of a banking organization or trust company (or any of its subsidiary corporations the income of which is included in entire net income) is transacted or conducted in part without this State, the elective income tax base shall be the result of multiplying entire net income by an apportionment percentage determined by adding the banking organization or trust company's property factor, payroll factor, and 2 times the receipts factor together and dividing the sum by 4. If 1 of the factors is missing, the remaining factors are added together and the sum is divided by the number of remaining factors. If 2 of the factors are missing, the remaining factor is the apportionment percentage. A factor is missing if both its numerator and denominator are zero, but a factor is not missing merely because its numerator is zero.
b. A banking organization or trust company's property factor, payroll factor and receipts factor shall be calculated using the combined property, payroll and receipts of the banking organization or trust company and each subsidiary corporation the income of which is included in entire net income.
c. A banking organization or trust company's property factor is a fraction, the numerator of which is the average of the values, at the beginning and end of the tax year (or as of such other dates approved by the Bank Commissioner), of all the real and tangible personal property, owned or rented, in this State by the taxpayer, and the denominator of which is the average of the values at the beginning and end of the tax year (or as of such other dates approved by the Bank Commissioner) of all such property of the taxpayer both within and without this State; provided, that any property which is not used in the taxpayer's business shall be disregarded. For the purposes of this paragraph, property owned by the taxpayer shall be valued at its original cost to the taxpayer, and property rented by the taxpayer shall be valued at eight times the annual rental.
d. A banking organization or trust company's payroll factor is a fraction, the numerator of which is wages, salaries and other compensation paid by the taxpayer to employees within this State during the tax year, and the denominator of which is wages, salaries and other compensation paid within and without this State during the tax year to all employees of the taxpayer. Wages, salaries and other compensation are paid to an employee within this State if:
1. The individual's service is performed entirely within this State;
2. The individual's service is performed within and without this State, but the service performed without this State is incidental to the individual's service within this State;
3. A portion of the service is performed within this State and the base of operations of the individual is in this State;
4. A portion of the service is performed within this State and, if there is no base of operations, the place from which the individual's service is directed or controlled is in this State;
5. A portion of the service is performed within this State and neither the base of operations of the individual nor the place from which the service is directed or controlled is in any state in which some part of the service is performed, but the individual's residence is in this State; or
6. The individual is neither a resident of nor performs services in this State but is directed or controlled from an office in this State and returns to this State periodically for business purposes and the state in which the individual resides does not have jurisdiction to impose income or franchise taxes on the employer.
e. A banking organization or trust company's receipts factor is a fraction, the numerator of which is the total gross receipts of the taxpayer in this State during the tax year, and the denominator of which is the total gross receipts of the taxpayer everywhere during the tax year.
1. Sales of tangible personal property are in this State if the property is physically delivered within this State to the purchaser or the purchaser's agent (but not including delivery to the United States mail or to a common or contract carrier for shipment to a place outside this State).
2. Rents and royalties from tangible property are in this State if the property is physically located in this State.
3. Patent and copyright royalties are in this State to the extent the product or process protected by the patent is manufactured or used in this State or if the publication protected by the copyright is produced or printed in this State.
4. Gains from the sale or other disposition of real property are in this State if the property is physically located in this State.
5. Gains from the sale or other disposition of tangible property for which an allowance for depreciation is permitted for federal income tax purposes are in this State if the property is physically located in this State or is normally used in the taxpayer's business in this State.
6. Interest, fees or penalties in the nature of interest, and loan servicing fees from loans secured by real property, and gains from the sale of loans secured by real property are in this State if the property is located within this State. If the property is located both within this State and one or more other States, the receipts described in this subsection are included in the numerator of the receipts factor if more than 50% of the fair market value of the real property is located within this State. If more than 50% of the fair market value of the real property is not located within any 1 state, the receipts described in this subsection shall be included in the numerator of the receipts factor if the borrower is located in this State.
7. Interest, fees or penalties in the nature of interest, and loan servicing fees from loans not secured by real property, and gains from the sale of loans not secured by real property, are in this State if the borrower is located in this State.
8. Gross receipts in this State from interest, dividends, gains, and other income from investment assets and activities and from trading assets and activities are determined by multiplying all such income from such assets and activities by a fraction, the numerator of which is the average value of such assets which are attributable to a regular place of business of the taxpayer within this state and the denominator of which is the average value of all such assets. A "regular place of business" means an office at which the taxpayer carries on such business in a regular and systematic manner and which is continuously maintained, occupied and used by employees of the taxpayer.
9. The taxpayer shall have the burden of proving that an investment asset or activity or trading asset or activity was properly assigned to a regular place of business outside of this State by demonstrating that the day-to-day decisions regarding the asset or activity occurred at a regular place of business outside the State. Where the day-to-day decisions regarding an investment asset or activity or trading asset or activity occur at more than 1 regular place of business and 1 such regular place of business is in this State and one such regular place of business is outside this State, such asset or activity shall be considered to be located at the regular place of business of the taxpayer where the investment or trading policies or guidelines with respect to the asset or activity are established. Unless the taxpayer demonstrates to the contrary, such policies and guidelines shall be presumed to be established at the headquarters of the taxpayer. The "headquarters" of the taxpayer shall be considered located, with respect to a state-chartered bank, in the state under the laws of which the bank was created, and with respect to a national banking association, in the state of the bank's home office as designated in its charter.
10. All other gross receipts not specifically addressed herein shall be considered in this State if the activity which gives rise to the gross receipts is performed within this State.
11. Where an asset originated by the taxpayer is subsequently securitized, reference shall be made to the original transaction which created the asset and the subsequent transfer shall be disregarded for purposes of determining gross receipts attributable to this State under paragraphs (c)(6)e.6., (c)(6)e.7. and (c)(6)e.8. of this section above.
(7) The bank income tax liability of an electing banking organization or trust company shall be computed by applying the following rates of tax to the electing banking organization or trust company's elective income tax base: 7.0% of elective income tax base not in excess of $50,000,000; 5.0% of elective income tax base in excess of $50,000,000 but not in excess of $100,000,000; 3% of elective income tax base in excess of $100,000,000 but not in excess of $500,000,000; 1.0% of elective income tax base in excess of $500,000,000 but not in excess of $1,300,000,000; and 0.5% of elective income tax base in excess of $1,300,000,000.
(d) Location benefit tax liability. -- In addition to Bank Income Tax Liability as provided in subsection (c) of this section above, any electing banking organization or trust company paying the alternative franchise tax under this section shall be liable for a location benefit tax liability computed as follows:
(1) The location benefit tax base shall consist of all property, cash, interest bearing balances, securities, loans and leases, trading account assets, securitized assets, computed as of December 31 of the year prior to the year for which alternative franchise tax is paid, but shall not include such property, cash, interest bearing balances, securities, loans and leases, trading account assets, securitized assets as are directly attributable to the operations of a branch operating entirely outside of this State.
(2) The location benefit tax liability shall be $2,000,000, plus 0.015% of the value of assets not in excess of $5,000,000,000; 0.010% of the value of assets in excess of $5,000,000,000 but not in excess of $20,000,000,000; 0.005% of the value of assets in excess of $20,000,000,000 but not in excess of $100,000,000,000.
75 Del. Laws, c. 223, § 1; 76 Del. Laws, c. 234, § 2.;
§ 1102. Statement of net income to be filed.
(a) For purposes of assessment, the president, treasurer or other proper officer of every banking organization, trust company or federal savings bank not headquartered in this State but maintaining branches in this State (or out-of-state bank that operates a resulting branch in this State), shall, in each year, file with the December 31 call report, a true statement, verified by oath, setting forth the net income of such banking organization, trust company or federal savings bank not headquartered in this State but maintaining branches in this State as defined in this chapter 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 banking organization, trust company or federal savings bank not headquartered in this State but maintaining branches in this State as defined in this chapter. In the case of an out-of-state bank that operates more than one resulting branch in this State, the statement setting forth the taxable income of such resulting branches shall set forth the information required by the State Bank Commissioner on a basis that consolidates such information for all resulting branches of such out-of-state bank in this State. Any and all documents relating to the taxation of a banking organization, trust company or federal savings bank not headquartered in this State but maintaining branches in this State shall be true statements, verified by oath, by the president, treasurer or other proper officer of such banking organization, trust company or federal savings bank not headquartered in this State but maintaining branches in this State (or out-of-state bank that operates a resulting branch in this State).
(b) Every banking organization (or out-of-state bank that operates a resulting branch in this State), trust company or federal savings bank not headquartered in this State but maintaining branches in this State failing to comply with subsection (a) of this section shall be subject to a penalty of $25 for each day that it continues in such failure, unless the Commissioner is satisfied that such failure was not wilful. Any penalty that may be imposed by the Commissioner hereunder shall be paid to the State Treasurer for deposit in the General Fund.
32 Del. Laws, c. 104, § 4; Code 1935, § 2318; 44 Del. Laws, c. 132, § 2; 5 Del. C. 1953, § 1103; 59 Del. Laws, c. 434, § 1; 64 Del. Laws, c. 160, § 2; 65 Del. Laws, c. 444, § 4; 68 Del. Laws, c. 303, § 29; 70 Del. Laws, c. 112, § 59; 70 Del. Laws, c. 327, § 32; 71 Del. Laws, c. 19, § 56.;
§ 1103. Review of tax.
The assessment of tax under this chapter shall be reviewed and corrected by the State Bank Commissioner upon application by any party interested, prior to the first day of May in the year in which the tax is levied, if, upon such application, good cause be shown for correction.
32 Del. Laws, c. 104, § 6; Code 1935, § 2320; 44 Del. Laws, c. 132, § 3; 5 Del. C. 1953, § 1105; 59 Del. Laws, c. 434, § 1; 61 Del. Laws, c. 82, §§ 2, 3; 64 Del. Laws, c. 160, § 3; 65 Del. Laws, c. 444, § 4; 66 Del. Laws, c. 23, § 3; 66 Del. Laws, c. 378, § 1; 70 Del. Laws, c. 327, § 33.;
§ 1104. Date of payment and collection of tax; estimated tax.
(a) Taxes imposed under this chapter are due and payable on or before the 1st day of March in the year in which they are assessed, and after that date shall be collected by the State Bank Commissioner. Except that with respect to a banking organization, trust company or federal savings bank not headquartered in this State but maintaining branches in this State whose franchise tax liability for the current year is estimated to exceed $10,000, a tentative return covering estimated bank franchise tax liability for the current income year, to be in such form and containing such information as the State Bank Commissioner shall prescribe, shall be filed with the State Bank Commissioner on or before the 1st day of March of the current income year. A resulting branch in this State of an out-of-state bank shall calculate estimated bank franchise tax liability with respect to the imputed capital addback provided in § 1101(i) of this title by using the imputed capital addback for the preceding income year. Every banking organization (or out-of-state bank that operates a resulting branch in this State), trust company or federal savings bank not headquartered in this State but maintaining branches in this State failing to file the tentative return covering estimated bank franchise tax liability required by this subsection shall be subject to a penalty of $25 for each day that it continues in such failure, unless the Commissioner is satisfied that such failure was not wilful. Any penalty that may be imposed by the Commissioner hereunder shall be paid to the State Treasurer for deposit in the General Fund.
(b) The estimated tax liability as calculated per subsection (a) of this section shall be due and payable in installments of 40 percent of the estimated tax liability on June 1, 20 percent on September 1 and 20 percent on December 1 of the current taxable year with the balance to be paid on March 1 of the succeeding year.
(c)(1) In the case of any underpayment of estimated tax or installment of estimated tax required by this chapter, there shall be added to the tax for the taxable year an amount determined at the rate of 0.05 percent per day upon the amount of underpayment for the period of the underpayment.
(2) For purposes of paragraph (1) of this subsection, the amount of the underpayment shall be the excess of:
a. The amount of the estimated tax or installment payment which would be required to be made if the estimated tax were equal to 80 percent of the tax shown on the final return for the taxable year, or if no return was filed, 80 percent of the tax for such year, over
b. The amount, if any, of the estimated tax or the installment paid on or before the last date prescribed for payment.
(3) The period of the underpayment shall run from the date the estimated tax or installment was required to be paid to the earlier of the date when such estimated tax or installment is paid or the date of the final payment of tax for the year.
(4) Notwithstanding paragraphs (1)-(3) of this subsection, the addition to the tax with respect to any underpayment of estimated tax or 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 thereof equals or exceeds the amount which would have been required to be paid on or before such date if the estimated tax were the tax shown on the final return of the banking organization, trust company or federal savings bank not headquartered in this State but maintaining branches in this State for the preceding taxable year.
(5) Notwithstanding paragraphs (1)-(3) of this subsection, no addition to the tax with respect to any underpayment of estimated tax or any installment shall be imposed, with respect to a resulting branch in this State of an out-of-state bank, if the addition is attributable to the difference between the imputed capital addback provided in § 1101(i) of this title for the current and preceding income years.
(d) In the case of a banking organization, trust company or federal savings bank not headquartered in this State but maintaining branches in this State which has been engaged in banking business of any kind in this State for less than the whole year, the amount of tax due, at the rates provided in this chapter, shall be prorated for that portion of the year during which the banking organization, trust company or federal savings bank not headquartered in this State but maintaining branches in this State was engaged in banking business of any kind within this State. Within 30 days of the cessation of all banking business of any kind within this State, the president, treasurer or other proper officer shall file a true statement, verified by oath, setting forth the net income of such banking organization, trust company or federal savings bank not headquartered in this State but maintaining branches in this State as defined in this chapter, and such other true statements, in such form as shall be specified by the Commissioner, verified by oath, setting forth the "taxable income" of such banking organization, trust company or federal savings bank not headquartered in this State but maintaining branches in this State as defined in this chapter.
(e) If any banking organization, trust company or federal savings bank not headquartered in this State but maintaining branches in this State shall fail to pay any tax due under this chapter on or before the due date, a penalty of 0.05 percent shall be assessed for each day that the same shall remain unpaid after such date.
32 Del. Laws, c. 104, § 10; Code 1935, § 2324; 5 Del. C. 1953, § 1109; 59 Del. Laws, c. 434, § 1; 61 Del. Laws, c. 82, § 4; 66 Del. Laws, c. 23, §§ 4, 5; 66 Del. Laws, c. 378, §§ 2, 3; 67 Del. Laws, c. 55, § 2; 67 Del. Laws, c. 279, § 1; 68 Del. Laws, c. 303, §§ 30, 31; 70 Del. Laws, c. 112, §§ 60-63; 70 Del. Laws, c. 327, §§ 34-37; 71 Del. Laws, c. 19, §§ 57-59; 71 Del. Laws, c. 217, §§ 11, 12; 72 Del. Laws, c. 15, § 16.;
§ 1105. Rate of taxation; credits.
(a) The rate of tax upon the taxable income of banking organizations, trust companies and federal savings banks not headquartered in this State but maintaining branches in this State, excluding any banking organization or trust company electing to pay alternative franchise tax pursuant to § 1101A of this title, shall be as follows: 8.7% of the amount of taxable income not in excess of $20,000,000; 6.7% of the amount of taxable income in excess of $20,000,000, but not in excess of $25,000,000; 4.7% of the amount of taxable income in excess of $25,000,000, but not in excess of $30,000,000; 2.7% of the amount of taxable income in excess of $30,000,000; 1.7% of the amount of taxable income for years beginning after December 31, 1996, in excess of $650,000,000.
(b) For taxable years beginning after December 31, 1991, and ending before January 1, 1994, there shall be allowed as a credit against the tax imposed under subsection (a) of this section the applicable amounts provided in § 2011(h) or (i) (or both) of Title 30 as if the definition of "taxpayer" in § 2010(13) of Title 30 and the definition of "qualified activity" of § 2010(3) of Title 30 also included, solely for purposes of the credit provided in this subsection, entities subject to tax under this section, provided the taxpayer meets the qualifications set forth in § 2011(h) or (i) of Title 30. Notwithstanding the provisions of this subsection, credits arising solely by virtue of § 2011(a) of Title 30 shall not be allowed against the tax imposed by this chapter.
(c)(1) The amount of credit allowable under subsection (b) of this section shall not exceed 50% of the amount of tax imposed upon the taxpayer by subsection (a) of this section for such taxable year.
(2) The amount of the credit determined under subsection (b) of this section for any taxable year that is not allowable for such taxable year solely as a result of the limitation contained in paragraph (1) of this subsection shall be a credit carryover to each of the succeeding 9 years in the manner described in § 2011(f) of Title 30.
(d) For taxable years beginning after December 31, 1996, and ending before January 1, 2012, there shall be allowed as a credit against the tax imposed under subsection (a) of this section or § 1101A of this title an amount equal to $400 for each new qualified employee in excess of 50 qualified employees above the number of employees employed by the banking organization in full time employment during the base year. For purposes of this subsection, the base year shall be the period after December 31, 1995, and before January 1, 1997.
(e) The following conditions apply in determining the credit under subsection (d) of this section:
(1) No credit may be claimed until the taxpayer has made new investments of at least $15,000 per qualified employee in excess of the number of employees employed by the banking organization in full time employment during the base year. "New investment," for purposes of this subsection, shall include only the cost of land and improvements to land, machinery and equipment; provided, that such new investment is placed in service within this State after December 1996 and was not used by any person at any time within the 1-year period ending on the date the taxpayer placed such property in service in the conduct of the business of a banking organization. For purposes of this subsection, if the new investment is leased or subleased by the taxpayer, the amount of new investment shall be deemed to be 8 times the net annual rent paid or incurred by the taxpayer for such investment. The net annual rent shall be the gross rent paid or incurred by the taxpayer during the taxable year, less any gross rental income received by the taxpayer from sublessees of any portion of such facility during such taxable year; and
(2) In determining the number of qualified employees, there shall be considered only employees:
a. Who are employed within this State on a regular and full time basis. "Full time employment" shall have the meaning ascribed to that term in § 2010(14) of Title 30;
b. For whom the banking organization or trust company provides health care benefits as defined in § 2010(15) of Title 30; and
c. Who have been employed in this State by the taxpayer for a continuous period of at least 6 months, verifiable by documentary evidence, and who were not employed at the same facility in substantially the same capacity by a different employer during all or a part of the base year.
(f)(1) The amount of credit allowable or carried forward under subsections (b), (c), (d) and (e) of this section shall together not exceed 50% of the amount of tax imposed upon the taxpayer by subsection (a) for such taxable year.
(2) The amount of credit determined under subsection (d) of this section for any taxable year that is not allowable for such taxable year solely as a result of the limitation contained in paragraph (1) of this subsection shall be a credit carryover to each of the succeeding 9 years in the manner described in § 2011(f) of Title 30.
(g) Any entity taxable under this section or § 1101A of this title, is eligible for tax credits in accordance with the Historic Preservation Tax Credit Act (subchapter II, Chapter 18, Title 30), which credits shall be against taxes imposed under this chapter; provided, however, that all claimed credits are accompanied by a Certificate of Completion issued by the Delaware State Historic Preservation Office certifying that such credits have been earned in compliance with that act.
32 Del. Laws, c. 104, § 5; Code 1935, § 2319; 5 Del. C. 1953, § 1104; 59 Del. Laws, c. 434, § 1; 61 Del. Laws, c. 77, § 1; 63 Del. Laws, c. 2, § 4; 64 Del. Laws, c. 160, § 4; 65 Del. Laws, c. 444, § 4; 68 Del. Laws, c. 202, § 7; 70 Del. Laws, c. 327, §§ 38, 39; 70 Del. Laws, c. 486, §§ 1, 2; 71 Del. Laws, c. 19, § 60; 72 Del. Laws, c. 331, § 1; 73 Del. Laws, c. 6, § 4; 75 Del. Laws, c. 223, § 2; 75 Del. Laws, c. 335, § 1.;
§ 1106. Disposition of taxes.
All moneys collected or received under this chapter shall be the moneys of the State, and the State Bank Commissioner shall pay all amounts so collected and received into the General Fund of the State Treasury.
32 Del. Laws, c. 104, § 11; Code 1935, § 2325; 42 Del. Laws, c. 77, §§ 1, 2; 5 Del. C. 1953, § 1110; 59 Del. Laws, c. 434, § 1.;
§ 1107. Duties of Attorney General.
The Attorney General shall act as the legal representative of the State in all actions or proceedings had under this chapter, and shall render legal assistance to the State Bank Commissioner in executing the provisions hereof.
32 Del. Laws, c. 104, § 12; Code 1935, § 2326; 5 Del. C. 1953, § 1111; 59 Del. Laws, c. 434, § 1.;
§ 1108. [Reserved.]
§ 1109. State corporation income and other taxes; exemption.
Notwithstanding Title 30, all banking organizations, trust companies and federal savings banks not headquartered in this State but maintaining branches in this State being taxed in accordance with this chapter, shall be exempt from the state corporation income tax as of January 1, 1974, and the taxation of income of banking organizations, trust companies and federal savings banks not headquartered in this State but maintaining branches in this State under this chapter shall be in lieu of occupational taxes or taxes upon the income, capital, and assets of such banking organization, trust company or federal savings bank not headquartered in this State but maintaining branches in this State, except that no real estate owned or acquired by such banking organization, trust company or federal savings bank not headquartered in this State but maintaining branches in this State shall be exempt from taxation. Except for corporations making the election provided in § 1101(e) of this title, for purposes of this section, any subsidiary corporation of a banking organization or trust company, including any corporation treated as a subsidiary corporation by reason of § 1101(f) of this title, shall enjoy the same exemptions as are applicable to banking organizations and trust companies. A subsidiary corporation or a division of a bank or trust company engaged in activities authorized under § 761(a)(14) or § 1661(a)(14) of this title shall be taxed in the same manner as an entity engaged in such activities pursuant to Title 18.
59 Del. Laws, c. 434, § 1; 64 Del. Laws, c. 461, § 6; 65 Del. Laws, c. 444, § 4; 67 Del. Laws, c. 223, § 16; 68 Del. Laws, c. 303, § 33; 70 Del. Laws, c. 327, §§ 40, 41; 71 Del. Laws, c. 25, § 34.;
§ 1110. Severability.
If any provision of this chapter or the application of any section or part thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application.
64 Del. Laws, c. 442, § 2; 64 Del. Laws, c. 461, § 8.;
§ 1111. Period of limitation upon assessments.
(a) Except as otherwise provided in this section, the amount of tax imposed by this chapter shall be assessed within 3 years after the last day prescribed for filing the return or, if later, the date the return was filed.
(b) In the case of a false or fraudulent return with intent to evade tax or a failure to file a return, the tax may be assessed at any time.
(c) When, before the expiration of the time prescribed in subsection (a) of this section for the assessment of tax, both the Commissioner and the taxpayer have consented in writing to its assessment after such time, the taxpayer may be assessed at any time before the expiration of the period agreed upon. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon.
70 Del. Laws, c. 112, § 64.;
§ 1112. Period of limitation on credit or refund.
Claim for a credit or refund of an overpayment of any tax imposed by this chapter shall be filed by the taxpayer with the Commissioner not later than 3 years from the last date prescribed for filing the return (including the time permitted in any agreements for the extension of time) or 2 years from the time the tax was paid, whichever of such periods is later, or if no return was filed by the taxpayer, not later than 2 years from the time the tax was paid.
70 Del. Laws, c. 112, § 64.;
§ 1113. Secrecy of returns and information; penalty.
(a) Except in accordance with proper judicial order or as otherwise provided by law, it shall be unlawful for the Commissioner or any person who is an officer or employee in the Office of the Commissioner, or for any other officer or employee of this State who has access to tax returns or information from tax returns under this chapter, to disclose or make known to any person in any manner the amount of income or any particulars set forth or disclosed in any report or return required under this chapter. Notwithstanding the foregoing, the Commissioner may permit the Commissioner of Internal Revenue of the United States, the proper officer of this or any other state, the District of Columbia, or any possession or territory of the United States that imposes a tax, or the authorized representative of any of such officers, to inspect the tax return of any taxpayer under this chapter, and the Commissioner may furnish to any such officer, or such officer's authorized representative, an abstract of the tax return of any taxpayer under this chapter or supply such officer or such officer's authorized representative with information contained in any such tax return or disclosed by the report of examination or investigation of the income or return of such taxpayer, but only for the purpose of, and only to the extent necessary in, the administration of the tax laws of such jurisdiction; provided, however, that no such permission shall be granted, and no such information shall be furnished, to any such officer or the officer's representative unless the statutes of such jurisdiction grant substantially similar privileges to the Commissioner or the Commissioner's legal representative.
(b) Nothing in this section shall be construed to prohibit the publication of statistics classified so as to avoid identification of specific taxpayers, or to prohibit the disclosure of the tax return or return information of any taxpayer to such person or persons as the taxpayer may designate in a written request or consent to such disclosure.
(c) For purposes of this section, the term "officer or employee" shall include present and former officers and employees, and any person or persons employed or retained by the State on an independent contractor basis.
(d) Any violation of this section shall be a misdemeanor, punishable upon conviction by a fine not to exceed $1,000, or imprisonment not to exceed 6 months, or both. The Superior Court shall have exclusive original jurisdiction over such misdemeanor.
72 Del. Laws, c. 15, § 17; 73 Del. Laws, c. 24, § 2.;
§ 1114. Abatements.
(a) The Commissioner is authorized to abate the unpaid portion of the assessment of any tax, interest, penalty, additional amount or addition to the tax, or any liability in respect thereof, which is:
(1) Excessive in amount;
(2) Assessed after the expiration of the period of limitations properly applicable thereto; or
(3) Erroneously or illegally assessed.
(b) The Commissioner is authorized to abate any portion (whether or not theretofore paid) of the assessment of any tax, interest, penalty, additional amount or additions to the tax, or any liability in respect thereof, if the Commissioner determines under uniform rules prescribed by the Commissioner that the administration and collection costs involved would not warrant collection of the amount due.
72 Del. Laws, c. 15, § 17.;
§ 1115. Closing agreements.
The Commissioner, or any person authorized in writing by the Commissioner, is authorized to enter into an agreement in writing with any person relating to the liability of such person (or of another person for whom such person acts) with respect to any tax imposed under this chapter for any taxable period. Such agreement shall be final and conclusive, and, except upon a showing of fraud or malfeasance or misrepresentation of a material fact:
(1) The case shall not be reopened as to matters agreed upon or the agreement modified by any officer, employee or agent of this State; and
(2) In any suit, action or proceeding, such agreement, or any determination, assessment, collection, payment, abatement, refund or credit made in accordance therewith, shall not be annulled, modified, set aside or disregarded.
72 Del. Laws, c. 15, § 17.;