CHAPTER 15.
OF THE REVENUES OF THE STATE.
AN ACT TO RAISE REVENUE FOR TH E STATE BY TAXING CERTAIN CORPORATIONS.
Be it enacted by the Senate and House of Representatives of the State of Delaware, in General Assembly met:
Section 1. That every telegraph, telephone, cable or electric light company, or company organized for the distribution of electricity, heat or power, or organized for the purpose of producing or distributing steam, heat or power, every express company not owned by a railroad company and not otherwise taxed, every company organized for the purpose of the production, distribution, or sale of gas, every parlor, palace, or sleeping car company, every oil or pipe line company, every life insurance company, every fire, marine, livestock, casualty or accident insurance company, except mutual fire insurance companies which do not issue policies on the stock plan, hereafter incorporated under the laws of this State, shall pay an annual tax, for the use of the State by way of license for its corporate franchise as hereinafter mentioned; provided, however, that no company or society shall be construed to be a life insurance company within the purview of this Act, which, by its certificate of incorporation shall have for its object the assistance of sick, needy or disabled members, the defraying of funeral expenses of deceased members, or to provide for the wants of the widows and families of members after death.
Section 2. That on or before the first Tuesday of January next, and annually thereafter, it shall be the duty of the president, treasurer or other proper officer of every corporation hereafter incorporated of the character specified in the preceding Section, to make report to the Secretary of State, stating specifically the following particulars, namely: Each telegraph, telephone, cable or express company not owned by a railroad company and not otherwise taxed, shall state the gross amount of its receipts from business done in this State for the year preceding the making such report; each gas company and electric light company shall state the amount of Its receipts for light or power supplied within this State for the year preceding the making of such report, and the amount of dividends declared or paid during the same time: each company organized for the distribution of heat or power or organized, for the purpose of producing or distributing steam, heat or power, shall state the amount of its receipts for the distribution of heat or power, or for the production or distribution of steam, heat or power within this State for the year preceding the making of such report, and the amount of dividends declared or paid during the same time; each parlor, palace or sleeping car company shall state the gross amount of its receipts for fare or tolls for transportation of passengers within this State during the same time; each oil or pipe line company engaged in the transportation of oil or crude petroleum shall state the gross amount of its receipts from the transportation of oil or petroleum through its pipes or in and by its tanks or cars in this State during the same time; each fire, marine, livestock, casualty or accident insurance company shall state the total amount of premiums received by it for insurance upon the lives of persons resident or property located within this State, during the same time.
Every other corporation shall file with the Secretary of State on or before the first day of January in each year an annual report, which shall state the location of its principal office in this State; the names of its officers, the amount of its authorized capital, the amount actually paid in, the amount invested in real estate, the tax annually thereon and the amount invested in manufacturing or mining in this State, or both.
Section 3. If any officer of any corporation required by this Act to make a return to the Secretary of State, shall, in such return, make any false statement, he shall be deemed guilty of perjury; if any such corporation shall neglect or refuse to make such return within the time limited as aforesaid the Secretary of State shall ascertain and fix the amount of the annual license fee or franchise tax, and the basis upon which the same is determined, in such manner as may be deemed by him most practicable, and the amount so fixed by him shall stand as such basis of taxation under this Act.
Section 4. That each telegraph, telephone, cable and express corporation shall pay to the State Treasurer for the use of the State, an annual license fee or franchise tax at the rate of one per centum, upon the gross amount of its receipts so returned or ascertained; that each corporation organized for the distribution of electricity, heat or power, or organized for the purpose of producing or distributing steam, heat or power, or organized for the
purpose of the production, distribution or sale of gas shall pay to the State Treasurer, for the use of the State, an annual license fee or franchise tax at the rate of two-fifths of one per centum upon the gross amount of its receipts so returned or ascertained, and four per centum upon the dividends in excess of four per centum so paid or declared by any such corporation; that each oil or pipeline corporation shall pay to the State Treasurer, for the use of the State, an annual license fee or franchise tax at the rate of three-fifths of one per centum upon the gross amount of its receipts so returned or ascertained; that each insurance company other than life shall pay to the State Treasurer for the use of the State, an annual license fee or franchise tax at the rate of three-fourths of one per centum upon the gross amount of its premiums so returned or ascertained; that each life insurance company shall pay to the State Treasurer, for the use of the State, an annual license fee or franchise tax of three-fourths of one per centum upon the amount of its surplus on the thirty-first day of December next preceding as fixed by Section 5 of this Act, and in addition thereto, a further annual license fee or franchise tax of thirty-one hundreds of one per centum upon the total gross insurance premiums collected by such companies during the year ending the thirty-first of December next preceding. The Insurance Commissioner of this State shall ascertain and report to the Secretary of State all facts necessary to enable the said Secretary of State to ascertain and fix the amount of taxation to be paid by life insurance companies under this Act, and shall also certify to each of said companies the amount of such taxation under this Act; that each parlor, palace, or sleeping car corporation shall pay to the State Treasurer, for the use of the State an annual license fee or franchise tax at the rate of one and one-half per centum upon the gross amount of its receipts so returned or ascertained; if any oil or pipe line corporation has part of its transportation line in this State and part thereof in another State or other States, such corporation shall return a statement of its gross receipts for transportation of oil or petroleum over its whole line, together with a statement of the whole length of its line, and the length of its line in this State; such corporation shall pay an annual license fee or franchise tax to the State Treasurer, for the use of the State, at the aforesaid rate upon such proportion of its said gross receipts as the length of its line in this State bears to the whole length of its line; that all other corporations hereafter incorporated under the laws of this State, and not hereunbefore provided for shall pay an annual license fee or franchise tax of one-twentieth of one per centum on all amounts of capital actually paid in up to and including the sum of three million dollars; on all sums of capital stock issued and outstanding in excess of three million dollars and not exceeding five million dollars, an annual license fee or franchise tax of one-fortieth of one per centum and the further sum of thirty dollars per annum per one million dollars or any part thereof, on all amounts of capital stock, issued and outstanding in excess of five million dollars; provided, that this Act shall not apply to railroad, railway, canal or banking corporations or to savings banks, cemeteries or religious corporations, or to purely charitable or educational associations or manufacturing or mining corporations, at least fifty per centum of whose capital stock issued and outstanding is invested in mining or manufacturing carried on within this State; if any manufacturing or mining company, carrying on business in this State, shall have less than fifty per centum of its capital stock issued and outstanding, invested in business carried on within this State such company shall pay the annual license fee or franchise tax herein provided for companies not carrying on business in this State, but shall be entitled in the computation of such tax, to a deduction from the amount of its capital stock issued and outstanding of the assessed value of its real and personal estate so used in manufacturing or milling, or to any mercantile corporation whose capital actually paid in is invested in a mercantile business and carried on within this State, and-which is now subject to a license tax for the carrying on of said business under Chapter 117, Volume 13, Laws of Delaware.
Section 5. That the Secretary of State shall certify and report to the State Treasurer, on or before the first Tuesday of February in each year, a statement of the basis of the annual license fee or franchise tax determined from the annual report filed by each corporation as hereinbefore required, and the amount of tax due thereon respectively, at the rate fixed by this Act; such tax shall thereafter become due and payable and it shall be the duty of the State Treasurer to immediately notify all corporations of the amount of such license fee, or franchise tax due and payable by them and to receive the same; if the tax of any corporation or company remains unpaid on the first day of March after the same becomes due the same shall thenceforth bear interest at the rate of one per centum for each month until paid; the Secretary of State shall have power to inquire into the truth or falsity of every report required to be filed by this Act as May be necessary to carry out the provisions hereof; and may require the production of the books of any such corporation, and may swear or affirm and examine witnesses in relation thereto.
Section 6. That such tax when determined shall be a debt due from such corporation or company to the State, for which an action at law may be maintained after the same shall have been in arrears for the period of one month, such tax shall also be a preferred debt in .case of insolvency.
Section 7. That in addition to other remedies for the collection of such tax it shall be lawful for the Attorney General, either of his own motion or upon request of the State Treasurer, whenever any tax due under this Act from any corporation or company shall have remained in arrears for a period of three months after the same shall have become payable, to apply to the Court of Chancery, by petition in the name of the State, on five days' notice to such corporation or company, which notice may be served in such manner as the Chancellor may direct for an injunction to restrain such corporation or company from the exercise of any franchise, or the transaction of any business within this State until the payment of such tax and interest clue thereon and the cost of such application shall be fixed by the Chancellor; the said Court is hereby authorized to grant such injunction, if a proper case appears and upon the granting and service of such injunction, it shall not be lawful for any such corporation or company thereafter to exercise any franchise or transact any business in this State until such injunction shall be
dissolved.
Section 8. That this Act shall not apply to or in any manner affect the tax upon the premiums obtained in this State by foreign fire insurance companies and their agents, which tax shall be in lieu of the tax herein provided and shall be collected and distributed as is specially provided by law in relation thereto.
Section 9. When, by the laws of any other State or nation, any other or greater taxes, fines, penalties, licenses, fees or other obligations or requirements are imposed Upon corporations of this State, doing business in such other State or nation, or upon their agents therein, than the laws of this State impose upon their
corporations or agents doing business in this State, so long as such laws continue in force in such foreign State or nation, the same taxes, fines, penalties, licenses, fees, obligations and requirements, of whatever kind shall be imposed upon all corporations of such other State or nation doing business within this State and upon their agents here; provided, that nothing herein shall be held to repeal any duty, condition or requirement now imposed by law upon such corporations of other States or nations transacting business in the State.
Section 10. If any corporation hereafter created shall for two consecutive years neglect or refuse to pay the State any tax which has been or shall be assessed against it, or which it is required to pay, under any law of this State and made payable into the State Treasury, the charter of such corporation shall be void, and all powers conferred by law upon such corporation are hereby declared inoperative and void, unless the Governor shall for good cause shown to him, give further time for the payment of such taxes, in which case a certificate thereof shall be filed by the Governor in the office of the State Treasurer, stating the reasons therefor.
Section 11. On or before the first Tuesday of January in each year the State Treasurer shall report to the Governor a list delinquent of all the corporations or companies which for two years next preceding such report have failed, neglected or refused to pay the taxes assessed against them or due by them, under the law of this State, and the Governor shall forthwith issue his proclamation, declaring under this Act of the Legislature that the charters of these corporations are repealed.
Section 12. The proclamation of the Governor shall be filed in the office of the Secretary of State, and published in such newspapers and for such length of time as the Governor shall designate.
Section 13. Any person or persons who shall exercise or attempt to exercise any powers under the charter of any such corporation after the issuing of such proclamation shall be deemed guilty of a misdemeanor, and shall be punished by imprisonment not exceeding one year, or a fine not exceeding one thousand dollars, or both, in the discretion of the court.
Section 14. After any corporation of this State hereafter uncorporated has failed and neglected for the space of two consecutive years to pay the taxes imposed on it by law, and the State Treasurer of this State shall have reported such corporation to the Governor of this State, as provided in this Act, then it shall be lawful for the Attorney-General of this State to proceed against said corporation in the Court of Chancery of this State for the appointment of a receiver, or otherwise, and the said court in such proceeding shall ascertain the amount of the taxes remaining due and unpaid by such corporation to the State of Delaware, and shall enter a final decree for the amount so ascertained and thereupon a fieri facias or other process shall issue for the collection of the same as other debts are collected, and if no property which may be seized and sold on fieri facias shall be found within the said State of Delaware, sufficient to pay such decree, the said court shall further order and decree that the said corporation, within ten days from and after the service of notice of such decree upon any officer of said corporation upon whom service of process may be lawfully made, or such notice as the court shall direct, shall assign and transfer to the trustees or receiver appointed by the court, any chose in action, or any patent or patents, or any assignment of, or license under any patented invention or inventions owned by, leased or licensed to or controlled in whole or in part by said corporation, to be sold by said receiver or trustee for the satisfaction of such decree, and no injunction theretofore issued nor any forfeiture of the charter of any such corporation shall be held to exempt such corporation from compliance with such order of the court; and if the said corporation shall neglect or refuse within ten days from and after the service of such notice of such decree to assign and transfer the same to such receiver or trustee for sale as aforesaid, it shall be the duty of said court to appoint a trustee to make the assignment of the same, in the name and on behalf of such corporation, to the receiver or trustee appointed to make such sale, and the said receiver or trustee shall thereupon after such notice and in such manner as required for the sale under fieri facias of personal property, sell the same to the highest bidder, and the said receiver or trustee, upon the payment of the purchase money, shall execute and deliver to such purchaser an assignment and transfer of all the patents and interests of the corporation so sold, which assignment or transfer shall vest in the purchaser a valid title to all the right, title and interest whatsoever of the said corporation therein, and the proceeds of such sale shall be applied to the payment of such unpaid taxes, together with the costs of said proceedings.
Section 15. Whenever it is established to the satisfaction of the Governor that any corporation named in said proclamation has not neglected or refused to pay said tax within two consecutive years, or has been inadvertently reported to the Governor by the State Treasurer as refusing or neglecting to pay the same as aforesaid, that the Governor be and he is hereby authorized to correct such mistake, and to make the same known by filing his proclamation to that effect in the office of the Secretary of State.
Section 16. If the charter of any corporation hereafter created shall become inoperative or void by proclamation of the Governor, or by operation of law, for non-payment of taxes the Governor, by and with the advice of the Attorney-General, may, at any time within two years thereafter, or after the default in the payment of such taxes, upon payment by said corporation to the Secretary of State of such sum in lieu of taxes and penalties as to them may seem reasonable, but in no case to be less than the fees required as upon the filing of the original certificate of incorporation, permit such corporation to be reinstated and entitled to all its franchises and privileges, and upon such payment as aforesaid the Secretary of State shall issue his certificate entitling such corporation to continue its said business and its said franchises.
Nothing in this Section contained shall relieve said corporation from penalty of forfeiture of franchises in case of failure to pay future taxes imposed as in this Act provided.
Section 17. The officers of any corporation who shall consider the tax levied under the provisions of this Act excessive or otherwise unjust, may make application to the Governor for a review of the assessment and a readjustment of the tax; provided, there be filed with the Governor within three months from the date of assessment a petition of appeal, duly verified according to law, stating specifically the grounds upon which the appeal is taken and the reasons why the tax is considered excessive or unjust; the Governor shall thereupon proceed to investigate the contentions raised by the said petition of appeal; and for the purpose of such hearing, the officers of said corporation may be summoned to appear before the Governor, either in person or by attorney, and questioned as to the statements set forth in the said petition of appeal; if, in the opinion of the Governor it shall appear that the tax so levied as aforesaid is excessive or unjust, he shall thereupon require the officers of the corporation to file with him a corrected return, and upon said corrected return the assessment shall be adjusted and the tax reduced or amended as in the opinion of the Governor shall seem proper.
If the petition of appeal shall not be filed within three months from the date of the assessment, as aforesaid, the right to appeal to the Governor shall be considered and treated as having been waived and the amount of tax levied shall be payable and collectible at once.
Section 18. That the Secretary of State shall receive for the services required of him under the provisions of this Act the sum of five hundred dollars to be paid to him annually in addition to the salary and fees now provided by law.
Section 19. That the provisions of this Act shall not apply to corporations heretofore incorporated and the property of such corporations is hereby made exempt from taxation under the provisions of this Act, such exemption, in the opinion of the General Assembly, being best to promote the public welfare.
Approved March 10th, 1899.
Amended and approved March 7th, 1901.