Chapter 204

TAXATION

[HISTORY: Adopted by the Mayor and Council of the Town of Elsmere: Art. I, 9-4-1958 as Ord. No. 66, amended in its entirety 1-15-1981 by Ord. No. 152; Art. II, 8-8-1968 as Ord. No. 95; Art. III, 1-14-1992 as Ord. No. 281. Amendments noted where applicable.]

ARTICLE I

Penalty for Unpaid Tax Bills

[Adopted 9-4-1958 as Ord. No. 66; amended in its

entirety 1-15-1981 by Ord. No. 152]

~ 204-1. Authorization to collect penalty.

  On and after October 1, 1958, the Town Finance Director is authorized and directed to add to each unpaid town tax bill six percent (6%) of the total amount due.

~ 204-2. Additional penalty.

  On or about each October 1 after October 1, 1958, the Town Finance Director is authorized and directed to add to each unpaid town tax bill the sum of six percent (6%) of the total amount due and owing, including penalties assessed in prior years.

~ 204-3. Penalty for tax bill in arrears.

  The Town Finance Director is authorized and directed to add to each unpaid town tax bill an additional sum of one percent (1%) of the total amount due and owing for each month that the tax bill is in arrears.

ARTICLE II

Realty Transfer Tax

[Adopted 8-8-1968 as Ord. No. 95]

~ 204-4. Definitions.

  When used in this Article, the following definitions apply:

           DOCUMENT [Amended 12-12-1968 by Ord. No. 97[1]] -- Any deed, instrument or writing whereby any real estate within this state, or any interest therein, shall be quitclaimed, granted, bargained, sold or otherwise conveyed to the grantee.

           A.     "Document" shall not include the following:

           (1)  Any will;

           (2)  Any lease other than those described or defined in Subsection B below;

           (3)  Any mortgage;

           (4)  Any conveyance between corporations operating housing projects pursuant to Chapter 45 of Title 31 of the Delaware Code and the shareholders thereof;

           (5)  Any conveyance between nonprofit industrial development agencies and industrial corporations purchasing from them;

           (6)  Any conveyance to nonprofit industrial development agencies;

           (7)  Any conveyance between husband and wife;

           (8)  Any conveyance between persons who were previously husband and wife, but who have since been divorced; provided that such conveyance is made after the granting of the final decree in divorce and the real estate or interest therein subject to such conveyance was acquired by the husband and wife, or husband or wife, prior to the granting of the final decree in divorce;

           (9)  Any conveyance between parent and child or the spouse of such a child;

           (10) Any conveyance to a trustee, nominee or straw party for the grantor as beneficial owner, for the beneficial ownership of a person other than the grantor where, if such person were the grantee, no tax would be imposed upon the conveyance pursuant to this Article or from a trustee, nominee or straw party to the beneficial owner;

           (11) Any conveyance between a parent corporation and a wholly-owned subsidiary corporation; provided that such conveyance is without actual consideration;

           (12)     Correctional deeds without actual consideration;

           (13) Any conveyance to or from the United States or this state, or to or from any of their instrumentalities, agencies or political subdivisions and the University of Delaware;

           (14) Any conveyance to or from a corporation, or a partnership, where the grantor or grantee owns stock of the corporation or an interest in the partnership in the same proportion as his interest in, or ownership of, the real estate being conveyed; provided, however, that this subsection shall not apply to any distribution in liquidation or other conveyance resulting from the partial or complete liquidation of a corporation, unless the stock of the corporation being liquidated has been held by the grantor or grantee for more than three (3) years; provided, further, that this subsection shall not apply to any conveyance from a partnership to its partners unless the partners' interest in the partnership has been held for more than three (3) years;

           (15) Any conveyance by the owner of previously occupied residential premises to a builder of new residential premises when such previously occupied residential premises are taken in trade by such builder as a part of the consideration from the purchaser of new, previously unoccupied premises;

          (16) Any conveyance to the lender holding a bona fide mortgage, which is genuinely in default, either by a sheriff conducting a foreclosure sale or by the mortgagor in lieu of foreclosure;

           (17) Any conveyance to a religious organization or other body or person holding title to real estate for a religious organization, if such real estate will not be used following such transfer by the grantee, or by any privy of the grantee, for any commercial purpose; provided, however, that only that portion of the tax which is attributable to and payable by the religious organization or other body or person holding title to real estate for a religious organization under Title 30, ~ 5402, of the Delaware Code shall be exempt;

           (18) Any conveyance to or from a volunteer fire company, organized under the laws of this state; provided, however, that only that portion of the tax which is attributable to and payable by the volunteer fire company under Title 30, ~ 5402, of the Delaware Code shall be exempt;

           (19) Any conveyance of a "mobile home" as defined in Title 25, ~ 7003, of the Delaware Code, provided that the tax on said conveyance has been paid under Title 30, ~ 3002, of the Delaware Code;

           (20) Any conveyance without consideration to an organization exempt from tax under Section 501(c)(3) of the federal Internal Revenue Code [26 U.S.C. ~ 501(c)(3)]; and

           (21) Any conveyance to a nonprofit conservation organization when the property is purchased for open space preservation purposes.

           B.   The term "document" defined in Subsection A of this section shall include the following:

           (1)  Any writing purporting to transfer a title interest or possessory interest for a term of more than five (5) years in a condominium unit or any unit properties subject to the Unit Property Act;

           (2)  Any writing purporting to transfer a title interest or possessory interest of any lessee or other person in possession of real estate owned by the state or other political subdivision thereof;

           (3)  Any writing purporting to assign or transfer a leasehold interest or possessory interest in residential property under a lease for a term of more than five (5) years. For this purpose, the term "residential property" means any structure or part of structure which is intended for residential use, and excluding any commercial unit subject to tax under Paragraph (6) of Subsection (a) of ~ 2301 of Title 30 of the Delaware Code, relating to commercial lessors.

           C.   In determining the term of a lease under Subsection B above, it shall be presumed for the purpose of computing the lease term that any rights or options to renew or extend will be exercised.

           D.   For purposes of the definition of "value" in the case of a document described in Subsection B under which the consideration is based in whole or in part on a percentage of the income or receipts to be received in the future, actual consideration shall include the amounts actually received under such percentage of income or receipts provision; provided, however, and notwithstanding any other provisions of this Article, that the tax imposed by this Article shall be due and payable within thirty (30) days after the date such amounts become due and payable under the agreement.

           TAX COLLECTOR -- The Tax Collector of the Town of Elsmere or any other person appointed by Council as Deputy Tax Collector for the purposes of this Article. The remuneration of any Deputy Tax Collector or Tax Collectors shall be fixed by Council at the time of the appointment of such Deputy Tax Collector of Tax Collectors. [Amended 9-12-1968 by Ord. No. 96]

           TRANSFER -- The making, executing, delivering, accepting or presenting for recording of any document whereby title to or interest in real property located within the town is transferred or conveyed, regardless of where the document is executed, delivered or accepted.

           VALUE -- In the case of any document granting, bargaining, selling or otherwise conveying any real estate or interest or leasehold interest therein, the amount of the actual consideration thereof, including liens or other encumbrances thereon and ground rents, or a commensurate part of the liens or other encumbrances thereon and ground rents where such liens or other encumbrances and ground rents also encumber or are charged against other lands, tenements or hereditaments; provided that, where such documents shall set forth a small or nominal consideration, the "value" thereof shall be determined from the price set forth in, or actual consideration for, the contract of sale or lease, or, in the case of a gift or any other document without consideration, from the actual monetary worth of the property granted, bargained, sold or otherwise conveyed, which, in either event, shall not be less than the amount of the highest assessment of such lands, tenements or hereditaments for local tax purposes.[2]

~ 204-5. Taxable conduct.

  Every person who makes, executes, issues or delivers any document, or in whose behalf any document is made, executed, issued or delivered, shall pay therefor and in respect thereof, or for and in respect of the vellum, parchment or paper upon which such document is written or printed, a tax at the rate of one percent (1%) of the value of the property represented by such document, which tax shall be payable at the time of the making, execution, issuance or delivery of such document; provided, however, that no more than one percent (1%) tax shall be levied on any single transfer of property.[3]

~ 204-6. Payment of tax.

     A.   The payment of the tax imposed by this Article shall be evidenced by the affixing of a documentary stamp or stamps to every document by the person making, executing, issuing or delivering such document, regardless of the situs of the actual making, executing, issuing or delivering of such document.

     B.   Such stamps shall be affixed in such manner that their removal will require the continued application of steam or water, and the person using or affixing such stamps shall cause such stamps to be canceled in such manner that they may not be used again, either:

           (1)  By writing or stamping or by causing to be written or stamped thereon the initials of his name and the date upon which such stamps are affixed or used; or

           (2)  By complying with such other method of cancellation as the Tax Collector may prescribe.

     C.   Sheriff's sale. The tax herein imposed shall be fully paid and have priority out of the proceeds of any judicial sale of real estate before any other obligation, claim, lien, judgment, estate or costs of the sale, and of the writ upon which the sale is made, and the sheriff or other officer conducting said sale shall pay the tax herein imposed out of the first moneys paid to him in connection therewith, unless previously paid by any party; provided, however, that any tax imposed by the State of Delaware shall have priority over the tax improved under this Article.

     D.   The value for determining the tax shall be the highest of the following:

           (1)  The bid price.

           (2)  The amount of the mortgage not in excess of the fair value of the real estate.

           (3)  The estimated full value.

~ 204-7. Additional functions of Tax Collector.

  In addition to the Tax Collector's other duties:

     A.   The Tax Collector shall prepare and furnish adhesive stamps of such denominations and in such quantities as may be necessary for the payment of the tax imposed and shall make provisions for the sale of such stamps in such places as he may deem necessary.

     B.   The Tax Collector may by regulation provide for the evidence of the payment of the tax to be shown on the document by means other than the affixing of documentary stamps.

     C.   The Tax Collector is charged with the enforcement of this Article and is authorized and empowered to prescribe, adopt, promulgate and enforce regulations relating to:

           (1)  The method to be used in affixing or canceling of stamps in substitution for, or in addition to, the method and means provided in this Article.

           (2)  The denominations and sale of stamps.

           (3)  Any other matter or thing pertaining to the administration and enforcement of this Article.

~ 204-8. Recordation.

     A.   No document shall be recorded in the Office of the Recorder of Deeds unless a documentary stamp or stamps shall have been affixed thereto as provided in this Article.

     B.   The affixation of stamps to a document upon which a tax is imposed by this Article, when lodged with or presented to the Recorder of Deeds, shall be an affirmation on the part of the transfer or transferors that the true, full and complete value of the transaction if fully reflected in the amount of the stamps affixed thereto.

     C.   Every document when lodged with or presented to the Recorder of Deeds shall set forth therein and as a part of such document the true, full and complete value thereof, or shall be accompanied by an affidavit executed by a responsible person connected with the transaction showing such connection and setting forth the true, full and complete value thereof or the reason, if any, why such document is not subject to tax under this Article.

~ 204-9. Violations and penalties.[4]

     A.   It shall be unlawful for any person to:

           (1)  Make, execute, deliver, accept or present for recording or cause to be made, executed, delivered, accepted or presented for recording any document without the full amount of tax thereon being duly paid;

           (2)  Make use of any documentary stamp to denote payment of the realty transfer tax without canceling such stamp as required by ~ 204-6B or as prescribed by the Tax Collector;

           (3)  Fail, neglect or refuse to comply with or violate the rules and regulations prescribed, adopted and promulgated by the Tax Collector under the provisions of this Article;

           (4)     Fraudulently cut, tear or remove from a document any documentary stamp or other evidence of payment of the realty transfer tax;

           (5)     Fraudulently affix to any document upon which tax is imposed by this Article any documentary stamp or other evidence of payment of the realty transfer tax which has been removed from any other document upon which tax is imposed by this Article, or any documentary stamp or other evidence of payment of the realty transfer tax of insufficient value, or any forged or counterfeited stamp or other evidence of payment of the realty transfer tax or any impression of any forged or counterfeited stamp, die, plate or other article;

           (6)     Willfully remove or alter the cancellation marks of any documentary stamp, or restore any such documentary stamp, with intent to use or cause the same to be used after it has already been used, or knowingly buy, sell, offer for sale, or give away any such altered or restored stamp to any persons for use, or knowingly use the same;

           (7)     Knowingly have in his possession any altered or restored documentary stamp which has been removed from any document upon which tax is imposed by this Article; provided that the possession of such stamps shall be prima facie evidence of an intent to violate the provisions of this clause;

           (8)     Knowingly or willfully prepare, keep, sell, offer for sale or have in his possession any forged or counterfeited documentary stamps; or,

           (9)     Accept for recording in the office of any Recorder of Deeds any document upon which the realty transfer tax is imposed, without the proper documentary stamp or other evidence of payment of the tax affixed thereto, as required by this Article and as is indicated in such document or accompanying affidavit.

     B.   Whoever violates this Article shall be fined not more than five hundred dollars ($500.) and imprisoned for not more than one (1) year, or both.

     C.   The Superior Court shall have jurisdiction over offenses under this section.

ARTICLE III

Senior Citizens and Disabled Tax Exemption

[Adopted 1-14-1992 as Ord. No. 281]

~ 204-10. Definitions.

  As used in this Article, the following terms shall have the meanings indicated:

           DISABLED -- A person who is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than twelve (12) months, or blindness; and the term "blindness" means central visual acuity of 20/200 or less in the better eye with the use of a correcting lens. An eye which is accompanied by a limitation in the fields of vision such that the widest diameter of the visual field subtends an angle no greater than twenty (20) degrees shall be considered for purposes of this definition as having a central visual acuity of 20/200 or less.

           FAMILY -- Husband and wife; a man and woman cohabitating as husband and wife in a home in which there are also children in esse or enventre sa mere, of either or both; parent and child; guardian and ward and also any group or persons residing together in one (1) home under one (1) head who are related by blood or marriage.

           INCOME -- All income from whatever source derived, including but not limited to realized capital gains and, in their entirety, pension, annuity and retirement benefits, including those retirement benefits under the Railroad Retirement Act, and the Social Security Act, and disability benefits for those persons "disabled" as defined herein for any tax year for which an exemption is claimed, "income" shall be determined to be equal in amount to the income received during the calendar year or the taxpayer's fiscal year ended immediately preceding December 31 of the pretax year, but no taxpayer shall use a fiscal-year basis unless he so elects to do and files his federal income tax return on such basis.

           PRETAX YEAR -- The calendar year immediately preceding the tax year.

           RESIDENT -- One legally domiciled within the Town of Elsmere for a period of three (3) years immediately preceding December 31 of the pretax year. Mere seasonal or temporary residence within the Town of Elsmere, of whatever duration, shall not constitute domicile within the town for the purposes of this Article. Absence from this town for a period of twelve (12) months shall be prima facie evidence of abandonment of domicile in this town. The burden of establishing legal domicile within the town shall be upon the claimant.

           TAX YEAR -- The calendar year in which town real estate tax is due and payable.

~ 204-11. Qualifications; amount of exemption. [Amended 3-9-1995 by Ord. No. 318]

  Every person, a resident of the Town of Elsmere of the age of sixty-five (65) or more years, or disabled, having an income as a single individual of not in excess of fifteen thousand dollars ($15,000.) per year [nineteen thousand dollars ($19,000.) per year for couple or family], and residing in a dwelling house owned by him which is a constituent part of his real property, shall be entitled, for proper claim being made therefore, to exemption from taxation on such real property to assessed valuation not exceeding twenty-one thousand dollars ($21,000.) in aggregate, except that no such exemption shall be in addition to any other exemption to which said person may be entitled, and that no such exemption shall be permitted where the income of all family members exceeds nineteen thousand dollars ($19,000.).

~ 204-12. Application for exemption. [Amended 3-9-1995 by Ord. No. 318]

  An application for exemption under this Article shall be filed with the Town Manager of the Town of Elsmere on or before April 15 of the tax year.

~ 204-13. Contents of application. [Amended 3-9-1995 by Ord. No. 318]

     A.   Every fact essential to support a claim for exemption under this Article shall exist on December 31 of the pretax year. Every application by a claimant therefor shall establish that he was, on December 31 of the pretax year, a resident of the Town of Elsmere for the period required, the owner of a dwelling house which is a constituent part of the real property for which the exemption is claimed and residing in said dwelling house. Such application shall also establish that his income for the yearly period as provided by this Article qualifies under ~ 204-11 above.

     B.   Every applicant shall establish that he or she will be, on or before July 1 of the tax year, sixty-five (65) years of age or more or disabled.

~ 204-14. Allowance of exemption.

  If an application is approved by the Town Manager, he shall allow an exemption from taxation against the assessed valuation of the real property to the claimant in the amount of the claim approved by him.

~ 204-15. Continuance of exemption.

  A claim having been filed with and allowed by the Town Manager shall continue in force from year to year thereafter without the necessity for further claim as long as the claimant shall be entitled to exemption under this Article, but the claimant shall be required yearly to establish his income, and the Town Manager may at any time require the filing of a new application or such proof as he shall deem necessary to establish the right of the claimant to continuance of the exemption. It shall be the duty of every claimant to inform the Town Manager of any change in his status or property which may affect his right to continuance of the exemption.

~ 204-16. Tenants in common or joint tenants.

     A.   Where title to property on which an exemption is held by claimant and another or others, either as tenants in common or as joint tenants, the claimant shall not be allowed an exemption against his interest in said property in excess of the assessed valuation of his proportionate share in said property, which proportionate share, for the purposes of this Article, shall be deemed to be equal to that of each of the other tenants, unless it is shown that the interests in question are not equal, in which event the claimant's proportionate share shall be as shown.

     B.   Nothing in this Article shall preclude more than one (1) tenant, whether title be held in common or joint tenancy, from claiming exemption against the property so held, but no more than the equivalent of one (1) full exemption in regard to such property shall be allowed in any year, and in any case in which the claimants cannot agree as to the apportionment thereof, the exemption shall be apportioned between or among them in proportion to their interest. Property held by husband and wife, as tenants by the entirety, shall be deemed wholly owned by each tenant, but not more than one (1) exemption in regard to such property shall be allowed in any year.

     C.   Right to claim exemption under this Article shall extend to property the title to which is held by a partnership to the extent of the claimant's interest as a partner therein, and by a guardian, trustee, committee, conservator or other fiduciary for any person who would otherwise be entitled to claim exemption under this Article, but not to property the title to which is held by a corporation.

~ 204-17. Rules and regulations.

  The Town Manager of the Town of Elsmere may promulgate such rules and regulations and prescribe such forms as he shall deem necessary to implement this Article. He may, in his discretion, eliminate the necessity for sworn application, in which event all declarations shall be subject to the penalties provided by law for perjury.

~ 204-18. Oath.

  The Town Manager of the Town of Elsmere and his duly designated assistants may take and administer the oath, where required, on any claim for exemption under this Article, and no charge shall be made for the taking of any affidavit or the preparation of any form required by this Article.

~ 204-19. Appeals.

  The aggrieved taxpayer may appeal from the disposition of an exemption claim under this Article in the same manner as is provided for appeals from assessments generally.

~ 204-20. Effective date.

  The first tax year upon which this Article shall apply shall be the calendar year 1992 (fiscal year 1993), and shall apply to all qualified property owners over age sixty-five (65) years or disabled.