HB 5018 Tax reform; changes provis. for pass-thru entities, estate, cig., income, food, record. & sales tax.
Harry J. Parrish | all patrons    ...    notes
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Summary as passed: (all summaries)
Omnibus Tax Bill. Makes several changes to the cigarette, recordation, income and sales taxes as follows:

Sales tax on food: Reduces the state sales tax on food by one-half cent effective July 1, 2005, an additional one-half cent effective July 1, 2006, and an additional one-half cent effective July 1, 2007.

Income tax: Increases the personal exemption amount from $800 to $900, effective January 1, 2006.

Increases the standard deduction for married individuals from $5,000 to $6,000, effective January 1, 2005.

Raises the filing threshold from $5,000 to $7,000 for individuals and from $8,000 to $14,000 for married couples, effective January 1, 2005.

Maintains the age deduction as it currently exists for taxpayers aged 65 and older as of January 1, 2004. Taxpayers who are currently 62 through 64 as of such date will continue to receive their current deduction, but once they reach 65, they will be subject to a means test. Those taxpayers who currently are younger than 62 as of January 1, 2004, will not receive the $6,000 deduction for age and will be subject to a means test once they turn 65 for their $12,000 deduction. These changes are effective January 1, 2004.

The bill allows low-income taxpayers to claim an income tax credit based upon the federal earned income tax credit in lieu of the current low-income tax credit beginning January 1, 2006.

Requires additions to federal taxable income for certain deductions for intangible and interest expense, but provides certain safe-harbors related to Delaware holding companies, effective January 1, 2004.

Pass-through entities: Requires pass-through entities' information returns to be filed with the Tax Department, effective for taxable years beginning on and after January 1, 2004.

Cigarette tax: Increases the state cigarette tax from 2.5 cents to 20 cents per pack. Beginning July 1, 2005, the rate increases to 30 cents per pack. The bill also establishes a cigarette wholesaler tax at the rate of 10% beginning March 1, 2005.

Recordation tax: Increases the state recordation tax from 15 cents to 25 cents per $100.

Sales tax: Increases the state sales and use tax one-half percent from 3.5 percent to 4 percent, which when combined with the local 1% sales tax will raise the combined rate from 4.5% to 5%, effective August 1, 2004.

Eliminates sales tax exemptions for certain public service corporations.

Full text:
04/06/04  House: Presented & ordered printed 041851252  pdf | impact statement
04/13/04  House: Floor substitute printed 041852252-H1 (Parrish)  pdf
04/13/04  House: Printed as engrossed 041852252-EH1  pdf
04/26/04  Senate: Committee substitute printed 049227712-S1  pdf
04/28/04  House: Bill text as passed House and Senate (HB5018ER)  pdf
06/09/04  Governor: Acts of Assembly Chapter text (CHAP0003)  pdf

Amendments:
House amendments
House amendments rejected
Senate amendments
Senate amendments engrossed
Senate amendments rejected

Status:
04/06/04  House: Presented & ordered printed 041851252
04/06/04  House: Referred to Committee on Finance
04/06/04  House: Tabled in Finance (12-Y 9-N)
04/07/04  House: Reconsidered by Finance
04/07/04  House: Reported from Finance with amds (10-Y 8-N)
04/07/04  House: Read first time
04/12/04  House: Passed by for the day
04/13/04  House: Constitutional readings dispensed (85-Y 11-N)
04/13/04  House: VOTE: (85-Y 11-N)
04/13/04  House: Floor substitute printed 041852252-H1 (Parrish)
04/13/04  House: Sub. by Del. Parrish agreed to 041852252-H1 (57-Y 42-N)
04/13/04  House: VOTE: ADOPTION (57-Y 42-N)
04/13/04  House: Amendment by Del. Marshall, R.G. rejected (45-Y 53-N)
04/13/04  House: VOTE: REJECTED (45-Y 53-N)
04/13/04  House: Amendments by Dels. Marshall R.G., Frederick, Dudley and
04/13/04  House: Hugo rejected (49-Y 49-N)
04/13/04  House: VOTE: REJECTED (49-Y 49-N)
04/13/04  House: Pending question ordered
04/13/04  House: Amendments by Del. Ware, R.L. rejected (0-Y 98-N)
04/13/04  House: VOTE: REJECTED (0-Y 98-N)
04/13/04  House: Amendment by Del. Hugo rejected (31-Y 65-N)
04/13/04  House: VOTE: REJECTED (31-Y 65-N)
04/13/04  House: Amendments by Del. Hamilton rejected (47-Y 50-N)
04/13/04  House: VOTE: REJECTED (47-Y 50-N)
04/13/04  House: Amendment by Del. Hamilton rejected
04/13/04  House: Pending question, not ordered
04/13/04  House: Pending question ordered
04/13/04  House: Amendment by Del. Marshall, R.G. rejected (45-Y 50-N)
04/13/04  House: VOTE: REJECTED (45-Y 50-N)
04/13/04  House: Amendment by Del. Griffith agreed to
04/13/04  House: Amendment by Del. Cole ruled not germane
04/13/04  House: Amendment by Del. Lingamfelter rejected
04/13/04  House: Amendment by Del. Marshall, R.G. rejected (42-Y 55-N)
04/13/04  House: VOTE: REJECTED (42-Y 55-N)
04/13/04  House: Amendments by Del. Nixon agreed to (51-Y 44-N)
04/13/04  House: VOTE: ADOPTION (51-Y 44-N)
04/13/04  House: Amds. by Dels. Frederick and Welch rejected (36-Y 62-N)
04/13/04  House: VOTE: REJECTED (36-Y 62-N)
04/13/04  House: Amendments by Del. Drake rejected (46-Y 49-N)
04/13/04  House: VOTE: REJECTED (46-Y 49-N)
04/13/04  House: Passed by temporarily
04/13/04  House: Amendments by Del. Drake reconsidered
04/13/04  House: Amendments by Del. Drake agreed to (49-Y 48-N)
04/13/04  House: VOTE: ADOPTION #2 (49-Y 48-N)
04/13/04  House: Pending question ordered
04/13/04  House: Engrossed by House - floor substitute w/amds HB5018EH1
04/13/04  House: Printed as engrossed 041852252-EH1
04/13/04  House: Passed House (52-Y 46-N)
04/13/04  House: VOTE: PASSAGE (52-Y 46-N)
04/13/04  House: Communicated to Senate
04/13/04  Senate: Read first time
04/13/04  Senate: Referred to Committee on Finance
04/26/04  Senate: Reported from Finance with substitute (15-Y 0-N)
04/26/04  Senate: Committee substitute printed 049227712-S1
04/27/04  Senate: Read second time
04/27/04  Senate: Rules suspended
04/27/04  Senate: Constitutional reading dispensed (39-Y 0-N)
04/27/04  Senate: VOTE: CONST. RDG. DISPENSED (39-Y 0-N)
04/27/04  Senate: Committee substitute agreed to 049227712-S1
04/27/04  Senate: Reading of amendments waived
04/27/04  Senate: Amendments by Sen. Chichester agreed to
04/27/04  Senate: Amendment by Sen. Cuccinelli withdrawn
04/27/04  Senate: Reading of amendments waived
04/27/04  Senate: Amendments by Sen. Cuccinelli rejected
04/27/04  Senate: Reading of amendments waived
04/27/04  Senate: Amendments by Sen. Stolle agreed to
04/27/04  Senate: Engrossed by Senate - committee sub. w/amds HB5018S1
04/27/04  Senate: Passed Senate with sub. w/amds. (31-Y 8-N)
04/27/04  Senate: VOTE: PASSAGE (31-Y 8-N)
04/27/04  House: Pending question ordered
04/27/04  House: Senate sub. w/amds. agreed to by House (52-Y 45-N)
04/27/04  House: VOTE: ADOPTION (52-Y 45-N)
04/28/04  House: Bill text as passed House and Senate (HB5018ER)
04/28/04  House: Enrolled
04/28/04  House: Signed by Speaker
04/30/04  Senate: Signed by President
06/03/04  Governor: Approved by Governor-Chapter 3 (effective - see bill)
06/09/04  Governor: Acts of Assembly Chapter text (CHAP0003)