2012 Delaware Code
Title 30 - State Taxes
CHAPTER 19. CORPORATION INCOME TAX
§ 1909. Withholding of income tax on sale or exchange of real estate by nonresident corporations.

(a) Definitions. --

(1) "Director" means the Director of the Division of Revenue or the Secretary of Finance of the State.

(2) "Nonresident corporation" means, for purposes of this section, a corporation that:

a. Is not organized under the laws of this State, and

b. Is not qualified or registered with the Secretary of State to do business in this State.

(3) "Recorder" means the official with the duty to record deeds and similar instruments.

(b) Estimated tax return; alternative forms. -- Every nonresident corporation that sells or exchanges Delaware real estate shall file with the Recorder:

(1) A "Delaware Corporate Tentative Tax Return" due for the quarter in which the sale or exchange is settled, applying the tax rate provided under § 1902 of this title to an estimate of the gain recognized on the sale or exchange, or

(2) An alternative form prepared by the Director to calculate income tax at the tax rate provided under § 1902 of this title, applied to the difference between the total amount realized by the transferor and the net balance due at the time of settlement of all recorded liens encumbering the real estate, or

(3) An alternative form prepared by the Director to declare under penalties of perjury that the sale or exchange of real estate is exempt from recognition of capital gain with respect to the tax year of the sale or exchange, with a statement of the facts and a citation to the provision or provisions of the Internal Revenue Code (Title 26, U.S.C.) relied upon.

(c) Due date of estimated tax return, payment. -- The return or form provided for in subsection (b) of this section, and the estimated tax reported due, shall be remitted with the deed to the Recorder before the deed shall be recorded.

(d) Payment credited to transferor. -- The estimated tax remitted under subsection (c) of this section shall be deemed to have been paid to the Director on behalf of the nonresident transferor and the nonresident transferor shall be credited for purposes of § 1905 of this title as a payment made on the date remitted to the Recorder.

(e) Persons or entities not liable for payments. -- Neither the transferee, title insurance producer, title insurer, settlement agent, closing attorney, lending institution, nor the real estate agent or broker in a transaction subject to this section shall be liable for any amounts required to be collected and paid over to the Recorder or Director under this section.

(f) Tax not imposed; lawful collection of taxes not prohibited. -- This section does not:

(1) Impose any tax on a transferor or affect any liability of the transferor for any tax; or

(2) Prohibit the Director from collecting any taxes due from a transferor in any other manner authorized by law.

77 Del. Laws, c. 291, § 3.;