Post on 30-May-2018
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
1/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
2/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
3/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
4/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
5/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
6/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
7/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
8/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
9/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
10/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
11/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
12/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
13/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
14/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
15/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
16/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
17/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
18/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
19/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
20/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
21/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
22/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
23/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
24/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
25/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
26/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
27/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
28/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
29/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
30/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
31/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
32/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
33/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
34/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
35/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
36/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
37/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
38/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
39/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
40/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
41/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
42/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
43/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
44/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
45/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
46/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
47/76
r---
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
48/76
OTHER FACTORS AFFECTING DATA - TOBACCO TAX
1962 - Field audi ts began
1965 - Completion of Delaware Turnpike--hurt sales (fewerstopping points)
1966 - State jo ined a mul t i - s t a t e c oo pe ra ti ve t o ~ u t down oni l l e g a l imports and sales (The North Carolina Operation)
1968 - Increased eff ic iency, according to the department
1969 - December 17--Court of Chancery f inds col lec t ion procedurefor t ob ac co p ro du ct s uncons t i tu t iona l
Rate of tax per twenty c igare t tes
Sta te 1959 60 61 62 63 64 65 66 67 68 69 70 71 72 73
Del. 3 3 3 5 5 5 5/7 7 7 7 7/11 11 11/14 14 14
Md. 3 j 3 6 6 6 6 6 6 6 6 6 6 6 6
Pa . 5 6 6 6 6 8 8 8 8 13 13 18 18 18 18
N.J. 5 5 5 7 7 8 8 8 11 14 14 14 14 14 19
Ir
r
rlrfrf
f!
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
49/76
VIII .MOTOR VEHICLE REGISTRATION
All motor veh ic les , t r a i l e r s , s e mi - t r a i l e r s , and pole
t r a i l e r s tha t are "driven or moved" must be reg i s te red and
l icensed by the s t a t e .
There i s a f l a t ra te of $20 per year fo r "pleasure v e h i c l e s , "
a category tha t encompasses the vas t major i ty of reg i s te red
v e h i c l e s . The o the r c lasses have r a t e s based on the weight
of the i nd iv idua l veh ic le . The pleasure veh ic le r a t e once was
a l so determined by weight, an d the change to a f l a t r a t e has
brought much cr i t i c iam from those who fee l th a t the small ca r
owners a re paying par t of what the b ig car owners should be
paying.
The l i censes are va l id for one year, an d they expire a t the
end of t he c or re sp on di ng month in which they were i ssued the
previous year. A recent change from quar te r ly exp i ra t ions was
r
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
50/76
r
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
51/76
Mjus tments of Motor Vehicle Regis t ra t ion Data
In 1965, there was a r a t e change for pleasure vehic les .
Pr ior to the change, those pleasure veh ic les \oleighing more
than 4000 pounds were taxed a t $16 per year, \olhile those weigh
ing l ess were t ax e d a t $10. After the change, the two c lasses
were e l imina ted , and a l l pleasure vehic les \olere an d s t i l l are
taxed a t a r a t e of $20 per year.
Since the time of the change, l i g h t pleasure veh ic les have
accounted for p,bout 75.9% of the t o t a l tax rece ip t s from pleasure
vehic les , and he8vy ones about 24.1%, fo r an overa l l net increase
of 81.9% in t h ~ pleasure vehicle category. Since r l casure
veh ic les w e r ~about 39.7% of the t o t a l Hotor Vehicle Regis t ra
t ion Tax, th e net e f f e c t of the change was an increase o f 32.5%,
so a l l da ta p r i o r to J u l y ~1965, was mult ipl ied by 1.325.
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
52/76
DELAWARE CODE CHANGES - NOTOR VEHICLE REGISTRATION TAX
Effec t iveDate
9-29-61
7-01-65
6-30-70
7-06-70
5-21-73
Descr ipt ion of Change
Small r a t e increase i r some minor areas
Pleasure vehicle r a t e ra ised from $10 (up to 4.000pounds). $16 (ov er 4 .0 00 pounds) to $20 ( regard lessof weLgb t ) .
Changed from quar te r ly to monthly expi ra t ions .
Collect ion and adminis t ra t ion dut ies moved fromHi.ghv .. ay Department to Department of Public Safety.
New category introduced, r ec r ea t i ona l vehic les .
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
53/76
IX. INHERITANCE AND ESTATE TAXES
Delaware L . t,loys both an es ta te tax and an inher i tance tax .
The former ex i s t s merely to make U f e of allowances in the cor-
responding federa l law. The l a ~ t e r ,which c o ~ p r i s e sthe bulk
of the revenue from th i s source, ha s a f a i r l y complex r a t e
system, broken down by the amount of the inher i t ance and the
r e l a t i on of the giver to the receiver (h igher r a t e s fo r more
d i s t an t r e l a t i ons ) .
This tax i s extremely unpredic table as fa r as rece ip t s
are concerned. Delaware i s such a small s t a t e (popula t ion-
wise) tha t the death of a s ing le very r i ch person wi l l cause a
notable upturn in any yea r ' s inher i tance t axes . while ac tuar ies
can give us a re l i ab l e est imate as to the number of Delaw9reans
who wi l l die in any given year, they cannot accura te ly pred ic t
when members of the DuPont family wi l l die . Such a predict ion
r --.
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
54/76
a:0
x 8
' - - ...J
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
55/76
DELAWARE CODE CHANGES - INHERITANCE AND ESTATE TAX
Effec t iveDate
7-30-71
9-30-71
Descr ipt ion of Change
Redef ini t ion o f brackets in some areas , and extensivera te increase in a l l areas of inher i tance taxes .
Implementation of S tate G ift Tax.
r
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
56/76
r
X. ALCOHOLIC BEVERAGE TAX
Taxes are imposed on the d i s t r ibu t ion of alcoholic beverages
in Delaware. All makers, d i s t r i b u t o r s , and r e t a i l e r s of such
beverages must be l icensed by th e s t a t e . The tax i s imposed
on whoever makes the beverages within the s t a t e , and whoever
brings them already made into th e s t a t e .
Although tax r a t e s vary widely from s t a t e to s t a t e an d
cons t i tu t e a large percentage of the price to the consumer,
probably the la rg es t f ac to r causing Delawareans to buy l iquor
ap.d beer in o ther s t a t e s (which i s t echnica l 1 v i l l e g a l except
fo r one quart per person per day, but unoff i c i a l ly permit ted)
i s the existence of f a i r t rade laws tha t wholesalers use to
t h e i r advantageto force
s e l l e r s int h i s
s t a t eto charge
a r t i c i c i a l l y high pr ices . Because of these " la w s, " d is co un t
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
57/76
These taxes a re co l lec ted an d administered by the Divis ion
o f Revenue, Department of F in an ce , w ith aid from th e A lc 0h olic
Beverage Commission.
r
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
58/76
crto-
1"'-........ . . . . . . . ~ . . - . . . . - - - ~ " - ~ ~ " ~ - , I ' , . ( , ~ .L.
............., -
, - - - - - - - r
64 .00 66 .00
-
sa.oo ro.oo on .00 74.00 7S.oo 78 .co sb.oo 82 .0 0 s4.00TINE1:""0
....l
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
59/76
Adjustments of Alcohol Tax Data
The Alcohol Tax Data as represented here is the sum of
taxes on Wine, Beer, Spi r i t s , and other th ings . The r ece ip t s
from the Beer Tax.comprise about 20% of the t o t a l and Wine Tax
rece ip ts come to about 10%. Sp i r i t s i s divided in two groups
depending on the e thy l alcohol content . The tax on s p i r i t s
with l ess t an 25% e thy l alcohol comprises only about 1% of the
t o t a l , while tha t on s p i r i t s with 25% or more e thy l alcohol
accounts for about 50%.
These percentages are v i t a l to judging the e ff ec t of r a t e
changes. Adjustments were made as follows.
In 1961, the Wine Tax was ra ised by 130%, so an adjustment of
13% was necessary. In 1969, th e higher Spir i t s Tax r a t e was
ra i sed by 45%, so an adjustment of 22% was made. In 1971, both
Spi r i t s Taxes were increased (low by 67%, high by 36.4%) which
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
60/76
DELAWARE CODE CHANGES - ALCOHOLIC B EV ER AG E TA X
Effec t iveDate
6-23-61
7-01-69
7-23-70
8-15-71
10-01-72
6-25-73
Description of Change
Rate for Wine ra ised from 35C to 80C per gallon.
Rate for s p i r i t s more than 25%, from $1.15 to $1.65
pe r gallon.
Collection now by Finance Department.
Rate for s p i r i t s more than 25%, from $1.65 to $2.L5Rate for sp i r i t3 no more than 25%, from $.90 to $1.50
Rate for Wine lowered from 80 to 40C.
Overal l revision of l icensing of makers, dis t r ibu te r s ,r e t a i l e r s .
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
61/76
XI. PARIMUTUEL SALES AND ADMISSIONS
Revenues f ~ o mEquine r a ci n g e s ta b li s hm e n ts i s broken into
three areas--Horse (Thoroughbred) racing, Horse Racing in Kent
County, and Harness Rac ing.
Taxes are levied in each area both on a per capita
attendance base and on the parimutuel handle. Current ra tes are
l O ~ per admission for Harness Racing and Horse Racing in Kent
County, 2 0 ~ p er a dm is si on for Horse Racing, 5% of the par i -
mutuel handle fo r H or se R ac in g and Horse Racing in Kent County,
an d 5 ~ i oof the handle fo r Harness Racing ( ~ %of th i s tax i s
earmarked for the Delaware Standardbred Fund).
These taxes are col lected and administered by th e D ivision
of Revenue, Department of Finance with the aid of the State
Racing Commission.
,.f
If
r -,
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
62/76
RACING DAYS
Year 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74
t
I
~-....J
I
D e l a . P r k . 55 54 54 52 55 55 55 55 61 60 61 65 64 65 65
Dover Downs( t h o r o u g h b r e d ) 0 0 0 0 0 0 0 0 0 54 54 44 43 54 25--Dover Downs( s t a n d a r d b r e d ) 0 0 0 0 0 0 0 0 0 0 42 85 78 74 75
Brandywine * * * * * 89 75 92 100 101 10 1 101 101 10 4 13 8
George town * * * * * 0 68 58 77 65 44 18 29 0 0
H a r r i n q t o n * * * * * 36 40 55 62 56 76 62 68 64 80
TOTAL * * * * * 17 0 23 8 26 0 30 0 33 6 37 8 37 5 38 3 36 1 383
* U n a v a i l a b l e
r -
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
63/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
64/76
A d j u s t ~ 2 n t sof Parimutuel Sales and Admission Tax Data
The ra tes for the var ious sources of th i s tax ha ve cha nge d
numerous times (see Delaware Code Changes). Research showed
t ha t recent ly, the subdivis ions paid approximately the following
shares of the t o t a l s reported here: Horse Racing, 31%; Horse
Racing in Kent County, 7%; and H ar ne ss R ac in g, 55%.
The above f igures were used a lon g w it h the r a t e changes as
r e p o r t e ~in the Delaware Code to come up with the following
fac tors of adjustments: before June 1965, 1.36; up to July 1965,1.274; up to June 1967, 1.099; up to December 1967, 1.116;
up to May1970, 1.048; up to December 1970, 1.80; up to July 1971,
1.096; up to December 1971, .97.
This graph must be looked a t i n c on ju nc ti on with the t ab l e
concerning racing days through the years . The rece ip ts by them
f
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
65/76
DELAiJARE CODE CHANGES - PARIHUTUEL TA X
Effec t iveDate
5-26-65
7-01-65
11-01-65
1-01-67
7-27-67
12-29-67
3-08-69
5-28-70
1-01-71
8-01-71
De sc r i p t i on of Chang
Throughout per iod- -add i t ions to length of permittedmeets ( increase in t o t a l racing da tes )
Horse Racing handle ra te ra ised from 4 ~ to 5 ~ % .
H a r n e s ~Racing handle ra te ra i sed from 3 ~ to 4 ~ % .
Georgetown H a r ~ e s sTrack opened.
Law c l a r i f i e d to assure prompt payment of taxesweekly.
Horse Racing in Kent County sec t ion es tab l i shed ,r a t e s 10 p er a dm is si on , 4 ~ %of handle.
Harness Racing handle ra te ra i sed froT. 4 ~ to 5%.
Dover Downs opened.
Horse Racing handle ra te Lowe r cd from 5 ~ to 5%.
Horse Racing handle ra te lowered from 5 to4 ~ % .
Horse Racing handle ra te ra i sed from 4 ~ to 5 ~ % .Horse Racing in Kent County handle r a t e ra ised from
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
66/76
XII. REALTY TRANSFER TAX
The Realty Transfer Tax j l a tax lev ied on the document
t r ans f e r r i ng ownership of r e a l proper ty. I t i s levied not onlv
on sa les of land (with or without bui ldings thereon) but appl ies
equ al ly to sa les of condominiums and t ransfers of r i gh t s under
l eases with a p o t e n t i a l dura t ion o f a t l e a s t f ive years . The
presen t r a t e o f the tax i s 2% of value, and value i s ascer ta ined
usua l ly by sa le pr ice , but sometimes by other measures.
The tax i s co l lec ted and administered by the Division of
Revenue , Depar tmen t of F i n a ~ c e .
t - ,r
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
67/76
f 1 - - '8 .00 82 .0 0 64 .0 0e.ocS.on
R = Raw Data
A = A d j u s t e d Moving Average
sam ?O.0 0 ~ 6 0 1 4 . 0 0TINE
.;~
!
. .. , .i
It: .. Ir1; l:
I I!
~.,
\
}{EAL ESTATE TAX
~
!~
Po~ , oK " .
' - " " . ___ r. j.( I \,f I i/ II
y\/v\;;-jr--= .....
66.00e .cc
oo~ i 1111I Ill" ! jj " ' - " ' ~ " ~ - , . - - -
06z .0 0
r -
.z -:.~ .
.. 1 : ~ _ :
e 1oiN-, ... ,
w '
~ o l
~ ~I
i00
L
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
68/76
~ i u s t ~ e n t sof Realty Transfer Tax DDta
The o nl y a dj us tm en t made in the Realty Transfer Tax data
was due to a doubling of the ra te as of August 1, 1971. The
adjustment was mul t ip l ica t ion of a l l previous data by 2.
DELAWARE CODE CHANGES - REALTY TRANSFER TAX
Effect iveDate
8-01-65
7-23-70
8-01-71
7-07-73
DeRcription ofChange
Effect ive date of the law ( ra te - - l%) .
Collect ion and adminis t ra t ion dut ies t ransfer red f ~ o mTax Department to Department of Finance.
Rate ra i sed from 1 co 2%.
Condominiums and long leases made taxable \ ~ h e nt ransfer red .
r ~ ,I
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
69/76
XIII . INSURANCE TAXES
The Insurance Tax in Delaware i s based on gross premiums
received. The overwhelming m ajo rity of premiums are taxed a t
a r a t e of 1.75%.
A s igni f icant portion of the 1.75% tax goes to help fund
f i r e companies, and tha t port ion i s determined each year by the
amount of premiums paid for f i r e and re la ted insurance.
Premiums for workmens' compensation insurance are taxed a t
a ra te of 4%, while pro f i t s from marine insurance are taxed a t
5%.
The tax i s due March I each year, and i s col lec ted and
administered by the Insurance Cotnmission.
f
f
}
r - ,
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
70/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
71/76
Adjustments of Insurance Tax D8ta
Beginning in 1972, the Fire Tax was takpn out of the 1.75%
Insurance Tax rece ip ts , ra ther than being c o ll e ct e d s e pa r at e ly.
Therefor.e, each year beginning with 1973, an adjustment must be
made to make up for. the t r r tnsfer of funds for t h i s purpose.
Thus far, t h i s t r ans fe r ha s been made as a lump sum in
April , and amounted to $1,697,000 in 1973 and $1,780,000 in
1974. Adjustments were made to the data accordingly.
DELAWARE CODE CHANGES - I ~ S U R A ! < C ETAXES
Effec t iveDate
1-01-72
Descript ion of Cha,Eg,_e _
Fire tax now deducted f rom 1.75% tax rece ip ts andt ransfer red to a spec ia l fund instead of or ig ina l lygoing into the spec ia l fund. Tax is now paid by
r t
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
72/76
XIV. PUBLIC lITILITY TAX
The Delaware Public Ut i l i t y Tax i s a tax placed on te lephone,
te legraph, gas, e l e c t r i c i t y, and cable t e lev is ion usage. I t i s
imposed in addi t ion to other taxes such as l i cense taxes , income
t axes , and spec ia l i zed gross rece ip t s and pr iv i lege t axes .
This tax in i t s present form was ins t i t u t ed in 1971, and has
been c r i t i c i z e d because of i t s regress ive fea tu re s; th at i s , i t
taxes es sen t i a l s such as power fo r heat ing, cooking and l igh t ing
an d as such, h i t s the low incomed the hardes t .
The ra t e of the tax i s 5% of the t o t a l cost to the consumer.
The tax on telephone use i s express ly passed on to the consumer
an d i s noted as a tax on the b i l l as received from th e te le ph on e
f
i
company. However, the taxes on te legraph, e l e c t r i c i t y, gas , an d j}
cable t e lev is ion are spec i f i c a l l y wri t ten in to the Delaware Code
to be taxes on d i s t r i bu t e r s and not on ~ o n s u m e r sbut a noth er
r ...,
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
73/76
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
74/76
DELAWARE CODE CHANGES - PUBLIC l ~ I L I T YTAX
Effect iveDate
8-01-71
7-01-73
D es cr ip ti on o f Change
Law in to e ffec t .
Te le ph on e u se by the s t a t e and i t s p o l i t i c a l subdiv is ions exempted from the tax.
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
75/76
XV. OTHER TAXES
Fo r convenience and iue to t he i r s ize r e l a t i ve to revenue
generat ing a b i l i t i e s , the r em a in in g r ev en ue sec tors are con-
s ol id at ed i nt o one category, OTHER TAXES. Obviously, s ince they
are conso l ida ted , there wi l l be no l i s t of code changes or
adjustments to th i s s e r i e s . In the fu tu re , i f t he i r s ize or
economic s ign i f i cance warrants i t , one or a l l of these se r i e s w i l l
be a na ly ze d i nd e pe n de n tl y. Presen t ly, as se t out in the monthly
repor t s of theDepartment
o f Finance, they are as fol lows:a. C orporation Feesb. Motor Vehicle - Operator License Fee
- Document Fees- Ti t l ing Fees- Reference Fees
c. Dividend and In t e r e s td. Hospi ta l Board and Treatmente. Ccurt Fines and Costsf . Motor Carr ie r Useg. Telephone and Telegraph
J
Ir
r
8/14/2019 Analysis of Changes in the Delaware Tax Code 1960 1974
76/76
V I
0 '
>