State Continues to Process Taxes And Fees

 

Income Tax Deadlines Extended
State Tax Due Dates Remain Unchanged

Last week, the Delaware Division of Revenue (DOR) announced that the deadlines for taxpayers to file certain personal and corporate income tax returns and payments had been extended to July 15, 2020 due to “rolling conformity” with federal income tax rules adopted by the IRS in response to the COVID-19 emergency.

The new deadline of July 15, 2020 applies to corporate income tax tentative returns due April 15 as well as final personal income tax returns, estimated personal income tax payments, and fiduciary income tax returns each due April 30.

All State of Delaware agencies continue to process State tax filings, accept tax payments, and issue refunds, where applicable. The State is not extending the deadlines for filing returns and payments for other State taxes and fees, including but not limited to the following categories:

  • Personal Income Tax Withholding
  • Personal Income Tax Estimated Payment due 6/15/2020
  • Corporate Income Tax Tentative Payment due 6/15/2020
  • Unemployment Insurance Tax (Non-profits and other reimbursable organizations will receive a 90-day deferment on UI payments)
  • Corporate Franchise Tax
  • LLC, LP, and GP Annual Tax
  • Gross Receipts Tax and Business License Renewals
  • Realty Transfer Tax
  • Tobacco and Cigarette Tax
  • Bank Franchise Tax and Fees
  • Insurance Taxes and Fees
  • Public Utility Tax
  • Alcoholic Beverage Tax
  • Public Accommodations Tax
  • Motor Fuel Tax

State staff are available to respond to taxpayer questions throughout the COVID-19 emergency. Taxpayers are urged to visit the websites of applicable agencies for additional COVID-19 information or call or email the following offices:

Division of Revenue
Leslie A. Poland, Community Relations Coordinator
leslie.poland@delaware.gov
Picture of the Delaware Division of Revenue logo
Division of Unemployment Insurance
DOL_UI_Employer_Tax_Questions@delaware.gov
Kenneth Briscoe, Communications Coordinator & Public Information Officer
kenneth.briscoe@delaware.gov
Division of Corporations
Doug Denison, Director of Community Relations
douglas.denison@delaware.gov
Delaware Bank Commissioner
Dawn Hollinger, Public Information Officer
dawn.hollinger@delaware.gov
Picture of the Great Seal of the State of Delaware
Delaware Department of Transportation (302-744-2724)
Charles McLeod, Director of Community Relations
charles.mcleod@delaware.gov

 


New Regulations Mandate Enhanced Screening of Business Entities Formed in Delaware

DOVER – Regulations promulgated by the Secretary of State and slated to take effect Jan. 1 will require that new business entities formed in Delaware be screened against lists of persons and groups that have been prohibited from doing business in the United States.

These new “Know Your Customer” rules were crafted to help ensure that bad actors and those who may seek to access Delaware’s business entity registry for nefarious purposes will be prevented from doing so. The rules also require regular crosschecks to ensure that existing Delaware entities associated with newly prohibited parties are flagged and ultimately dissolved.

“Delaware’s reputation as the corporate capital of the world should not be undermined by those who would use our state as a place to create their unscrupulous business entities,” said Secretary of State Jeffrey Bullock. “Combined with the diligent efforts of our business services community, these new regulations will help cut off their access to a legal home in Delaware.”

According to the new regulations, a Delaware registered agent will be required to vet the identity of any potential customer seeking to form a Delaware entity such as a Limited Liability Company (LLC) or a corporation. Next, the agent is required to check that identity information against lists of persons, foreign nationals, groups and entities that have been sanctioned by federal authorities or are otherwise prohibited from conducting business in the United States. These lists are maintained by the Office of Foreign Assets Control (OFAC), a division of the U.S. Treasury.

In addition, the new regulations mandate that Delaware registered agents check their lists of existing clients, associated contacts and entities against the OFAC lists on a quarterly basis, at minimum. Checks also must be performed whenever client information is transferred from another agent, and whenever an agent receives new contact information from a client.

“Earlier this year, we issued guidelines to our registered agent community outlining our expectations for client vetting and verification, which included OFAC checks and quarterly monitoring. To solidify and strengthen those policies, we brought legislation to the General Assembly and ultimately promulgated the regulations that will take effect in the coming weeks,” said Deputy Secretary of State Kristopher Knight, director of the Division of Corporations. “Throughout the process, Delaware registered agents have been great partners in our shared goal, and I thank them for their support and cooperation.”

For entities not represented by a Delaware registered agent, such as entities formed and maintained by Delaware residents and legal professionals, the Division of Corporations will perform the “Know Your Customer” checks.

To ensure compliance with the new regulations, the Division of Corporations will conduct periodic registered agent audits, as it does for rules already on the books.

Statutory authority to strengthen these regulations as well as associated penalties for noncompliance was granted this year with the passage and signing of House Bill 404, which the Department of State drafted and advanced through the General Assembly. Under the new law, the Division of Corporations also has greater latitude to refuse to process filings from a registered agent that fails to obey regulations.


Deadline Approaches for Delaware Unclaimed Property Voluntary Disclosure Agreement

Dover, DE – The clock is ticking for Delaware companies that may wish to convert their abandoned and unclaimed property audits to a Voluntary Disclosure Agreement offered by the Secretary of State.

Eligible firms have until Dec. 11, 2017 to choose a VDA conversion.

Companies that elect to enter into a VDA participate in a collaborative settlement process whereby the holder and the state agree upon a quantification methodology and an amount to be reported by the holder. The VDA allows holders to leverage audit work that has already been performed and incorporate it into the agreement to ensure efficiency. A Delaware VDA also provides indemnification against future unclaimed property proceedings by other states.

“The VDA program is a rigorous but fair process,” said Delaware Secretary of State Jeff Bullock. “For hundreds of companies it’s proven the fastest and easiest way to come into compliance with Delaware law, and remain in compliance going forward.”

Since its inception in 2012, more than 850 companies have enrolled in the VDA program and approximately 450 settlements have been reached to date.

Earlier this year, Gov. John Carney signed into law significant changes to Delaware’s unclaimed property law. These changes created a more streamlined statute that is more consistent with other states’ unclaimed property laws. One key revision grants unclaimed property holders under examination by the Delaware Department of Finance the opportunity to participate in the Secretary of State’s Voluntary Disclosure Agreement program.

Conversion documents must be received by the Secretary of State by Dec. 11, 2017 to be eligible for participation in the VDA program.

Visit https://vda.delaware.gov/ for more information. Further questions may be directed to VDA Administrator Alison Iavarone at alison.iavarone@delaware.gov or 302-577-8959.


New Business Tax Return Due Dates for Partnerships and Corporations

The Delaware Division of Revenue would like to inform local business regarding the following changes to due dates for business partnerships and corporations.

Internal Revenue Code now requires that:

  • Partnership returns are due on or before the 15th day of the third month following the expiration of the taxable period (March 15 for calendar year taxpayers).
  • S corporation returns are due on or before the 15th day of the third month following the expiration of the taxable period (March 15 for calendar year taxpayers). This has not changed from prior years.
  • Returns for C corporations are now due on or before the 15th day of the fourth month following the expiration of the taxable period (April 15 for calendar year taxpayers).

Delaware has issued TIM 2017-1 (http://revenue.delaware.gov/information/tims/tim_2017-01.pdf) granting an automatic extension of time to all C corporations to the due date of the corporation’s federal income tax return, without regard to extensions. The Delaware due dates for partnership and S corporation returns have not changed. As a result, the due dates for Delaware business returns for the 2016 tax year are as follows:

  • Partnership returns are due on or before the 30th day of the fourth month following the expiration of the taxable period (April 30 for calendar year taxpayers).
  • S corporation returns are due on or before the 30th day of the third month following expiration of the taxable period (March 30 for calendar year taxpayers).
  • Returns for C corporations are now due on or before the 15th day of the fourth month following the expiration of the taxable period. Because of federal holidays, this will be April 18, 2017 for calendar year taxpayers.

Delaware will be enacting legislation in 2017 to adopt the same due dates for Delaware’s business tax returns, effective for tax years beginning after December 31, 2016.

If you have questions about the due date of your business return, you can find specific information on our website (http://www.revenue.delaware.gov/services/BusServices.shtml) or by contacting us at (302) 577-8205.


New Site Makes Formation Easier for Small Businesses

Partnership with Delaware Libraries Makes Corporate
Filings Faster and More Accessible

Wilmington, DE – Joined by Delaware entrepreneurs and small business owners, Gov. Jack Markell today launched a new web portal to deliver online business formation and related services in support of in-state businesses.

Global Delaware, the Division of Corporations, the Division of Libraries, and public libraries across the state have teamed up with two Delaware-licensed registered agents, CT Corporation and IncNow, to make business registration available directly from the state for the first time.

imgresUntil now, Delawareans looking to form an entity directly with the state had to file through the mail or in-person at the Division of Corporations offices in Wilmington or Dover. With this new service, residents can complete the task online or at a Delaware public library with help from a librarian. This new option is quick, safe and cost-effective.

“The collaborative effort puts a terrific resource in the hands of our residents, and is exactly the direction we want to be headed in: Supporting local companies looking to create business structures that will enable expanded growth and success,” said Governor Markell.

Registration services on the Division of Libraries’ online platform have been customized for Delaware businesses, with the backing of the Division of Corporations as well as Delaware’s extensive public library network. The registration service will reside on the Delaware Libraries Entrepreneurship Community page, with other online tools and resources designed to support budding businesses.

“More than 1.2 million legal entities are incorporated in Delaware from around the world. I’m pleased that CT Corporation and IncNow took up the challenge of creating a product specifically targeted to the needs of small Delaware-based businesses,” explained Rick Geisenberger, director of the Division of Corporations. “By partnering with trusted agents and public libraries, we can further ensure that local entrepreneurs have convenient access to services they need when it comes time to start a business.”

“This partnership with Global Delaware is a great opportunity for us to add expert tools that support microbusinesses here in the State,” said State Librarian Dr. Annie Norman. “Delaware Libraries serve as a hub for connecting Delawareans with the information and resources they need to help them move forward with their plans to launch a new business.”

Librarians across the state received training on the new business registration platform in order to assist Delawareans who want to use the service. In addition, the new online service includes dedicated helplines staffed by professionals from IncNow and CT Corporation who will help walk users through the process and answer questions.

“State agencies continue to work together to help Delaware businesses become more informed, supported and competitive,” said Andrea Tinianow, director of Global Delaware. “We hope the local business community will take full advantage of this newest resource, and to let us know how else we can help.”