AN ACT TO AMEND TITLE 30 OF THE DELAWARE CODE RELATED TO TAX ADMINISTRATION.

Section 1 of this Act provides that the statute of limitations period for a substantial underpayment of a license fee or gross receipts tax will commence at the end of the period for which the license is issued, in order to parallel the normal limitations period for the assessment of an underpayment of this type of tax. Section 2 of this Act provides that notice of a judgment must have been provided to the taxpayer not later than the date of the notice given prior to the revocation of a professional license resulting from non-payment of taxes. Section 3 of this Act conforms Delaware’s deadlines for filing certain information returns to those established in the Internal Revenue Code. In an effort to combat identity theft and taxpayer fraud, federal filing dates were recently changed. For example, starting in 2017 the federal deadline for an employer to file aggregated W-2 data with the IRS will be January 31, which is the same date on which W-2s are distributed to individual taxpayers. Prior to this change, the IRS did not receive W-2 data until March 1 meaning that there has been a one-month window in which it could not readily confirm the authenticity of W-2s filed with taxpayers’ returns. Like other states and the IRS, Delaware has had to devote considerable resources to combating fraud and identity theft. By conforming to the new federal standard, Delaware will have data on hand that will help identify and isolate fraudulent filings. As the State’s employers will already be required to comply with the new federal deadlines, conforming Delaware’s filing dates will result in no additional administrative burden. Sections 4 and 5 of this Act adjust Delaware’s deadlines for filing income tax returns for pass-through entities (partnerships and S corporations) and corporations to be consistent with the new deadlines set forth in the Internal Revenue Code. For tax years beginning after December 31, 2015, the federal deadline for pass-through entities taxed as partnerships and as S corporations to file returns will be March 15 or the 15th day of the third month following the end of the pass-through entity’s fiscal year, while the federal deadline for a C corporation to file an income tax return will be April 15, or the 15th day of the fourth month after the end of the C corporation’s fiscal year. As the State’s business entities will already be required to comply with the new federal deadlines, conforming Delaware’s filing dates will result in no additional administrative burden. Finally, this Act deletes a provision of the Code that was effective only for tax returns due in 1958 and 1959.