[HISTORY: Adopted by the Town Council of the Town of Dagsboro as indicated in article histories. Amendments noted where applicable.]
[Adopted 11-11-1991 by Ord. No. 60]
Every person who makes, executes, delivers, accepts or presents for recording any document, except as excluded by § 243-7B, or in whose behalf any document, deed or lease is made, executed, delivered, accepted or presented for recording, shall be subject to pay for and in respect to the transaction or any part thereof, a realty transfer tax at the rate of 1 1/2%, 1% of which shall be pursuant to the Charter of the Town of Dagsboro and 1/2% pursuant to 22 Del. Code Ch. 16, of the value of the property represented by such document, deed or lease. Such tax shall be payable at the time of making, execution, delivery, acceptance or presenting of such deed for recording.
The transfer tax shall be apportioned equally between the parties to the transaction in the absence of an agreement to the contrary.
No tax shall be imposed on any conveyance when the actual value of the property being transferred is less than $100.
The tax imposed by this article shall be paid from the proceeds of any judicial sale of real estate as part of the costs of such judgment or estate and of the writ upon which the sale is made.
The payment of the tax imposed by this article shall be evidenced by a notation of payment on the document. The collector shall note on the document the payment of the tax, the amount of payment, the date of payment and the initials of the person receiving payment and his or her office. Such notation shall be conclusive evidence of payment as to any subsequent purchaser relying thereon.
The Town Council may appoint the Recorder of Deeds in and for Sussex County and such other persons within or without the county as agents for the collection of the tax imposed by this article. Each such agent shall be provided with an official stamp to be used on the document to show the tax paid.
A commission shall be allowed by the Town Council to such agents of 1% of the face value of the tax. The commission allowed to the Recorder of Deeds in and for Sussex County shall be paid to the County Treasurer for the use of the county.
No person shall make, execute, deliver, accept or present for recording or cause to be made, executed, delivered, accepted or present for recording any document without the full amount of tax thereon being duly paid.
In the event the State of Delaware determines that additional taxes are due under Title 30, Chapter 54, of the Delaware Code, then additional taxes shall be due to the Town in accordance with the valuation of the transfer as determined by the state, together with interest thereon at the legal rate. Refunds shall likewise be determined and paid.
As used in this article, the following terms shall have the meanings indicated:
- Includes any deed, instrument or writing pursuant to which title or possession of any real estate situate within the corporate limits of the Town which shall be quitclaimed, granted, bargained, sold, conveyed or transferred by a seller, vendor, grantor, assignor or transferor to any purchaser, buyer, vendee, grantee, assignee or transferee, except as provided in § 243-1 and includes any document or instrument in writing transferring or purporting to transfer a title or possessory interest by a seller, vendor, lessor, assignor or transferor to any purchaser, buyer, vendee, lessee, assignee or transferee in or to any of the following:[Amended 5-23-2005 by Ord. No. 2005-1]
- (1) A condominium unit or any property or properties subject to the Unit Property Act (25 Del. C. § 2201 et seq.) for a determinable term of five years or more;
- (2) An interest in land owned by another and/or improvements owned by another located on land owned by another for a determinable term of five years or more;
- (3) The exercise of any right or option to renew or extend the title possessory interest in an existing document or instrument in writing when such renewal or extension is for a period of five years or more.
- Includes the making, executing, delivering, accepting or presenting for recording of a document as defined herein.
- Includes in the case of a document the amount of the actual consideration thereof, including liens or other encumbrances thereon where such liens and 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, values 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 assessment of such lands, tenements or hereditaments as shown on the books of Sussex County.
"Document" shall not include any of the following:
Any conveyance by will;
Any lease other than those described or defined in the definition of “document”;
Any conveyance between persons who were previously husband and wife but who have since been divorced, provided such conveyance is made after the granting of the final decree in divorce;
Any conveyance between husband and wife;
Any conveyance between parent and child or a spouse of such child;
Any conveyance to a trustee, nominee or straw party for the grantor as beneficial owner;
Any conveyance for the beneficial ownership of a person other than a grantor where, if such person were the grantee, no tax would be imposed upon the conveyance pursuant to this article;
Any conveyance from a trustee, nominee or straw party to the beneficial owner;
Any conveyance between a parent corporation and a wholly owned subsidiary corporation, provided such conveyance is without actual consideration;
Correctional deed without actual consideration;
Any conveyance to or from the United States, The State of Delaware, or any instrumentality, agency or political subdivision of the state;
Any conveyance to or from a corporation or a partnership where the grantor or grantee owns stock of the corporation or an interest in or ownership of, the real estate, or interest therein being conveyed;
Any conveyance by the owner of a previously occupied residential premises to a builder of new residential premises when such previously occupied residential premises were taken in trade by such builder as a part of the consideration from the purchaser of new previously unoccupied premises;
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;
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;
Any conveyance made pursuant to a contract executed prior to effective date of this article.
Any conveyance made by or to an individual, a corporation or partnership when there is no change in beneficial interest;
Any conveyance made by or to any organization exempt from ad valorem real estate taxes.
[Added 9-27-2004; amended 2-24-2014]
There is hereby imposed and assessed a gross receipts tax at the rate of 3% of the gross rental receipts as follows:
Occupancy of any private and public lodging facilities and housing accommodations including rooms, rooming homes, boardinghouse, bed-and-breakfast inn, rooming house, tourist home, cottage, cabin, house and apartment (whether in condominium or not).
The payment of the tax shall be the responsibility of the person who is the owner of the property being rented; provided, however, that such person may designate an agent to collect and pay the tax to the Town. Where said designated agent is a real estate broker or agent, the latter shall collect and pay the tax to the owner for the owner's payment to the Town.
As used in this article, the following terms shall have the meanings indicated:
- GROSS RECEIPTS TAX
- The consideration received for occupancy, valued in money, whether received in money or otherwise, including all receipts, cash and property or services of any kind or nature and also any amount for which the occupant is liable for occupancy without any deduction therefrom whatsoever.
- The use or possession of the right to use or possession of any property referred to in this article.
- An individual, copartnership, corporation, company, association, firm or any group of individuals acting as a unit and includes any trustee, receiver, assignee or personal representative thereof.
- The consideration received for occupancy, valued in money, whether received in money or otherwise, including all receipts, cash credits and property or services of any kind or nature.
Every person receiving any rent on which the tax is imposed shall be obligated to file, or have filed by a designated agent, a rental tax report form with the Town Clerk and to pay the Town Clerk, for use of the Town, the amount of tax due the Town as follows: The tax on rent received in any year for occupancy which occurs during the period from January 1 through December 31 of that year shall be due and payable on or before the following February 1. For the initial year of implementation, the tax shall be July 1, 2006, through December 31, 2006.
The rental tax report form shall be furnished by the Town Clerk to the owner of the rental property, or designated agent thereof, at the time of issuance of the license required by the Town. It is the responsibility of the owner of the rental property to obtain a rental tax report form from the Town Clerk.
The contents of the rental tax report form shall be kept confidential by the Town as permitted by applicable state and federal law.
Any person obligated to pay the tax imposed and assessed by this article who fails or refuses to file the required rental tax report form and to remit the tax required to be paid within the time and the amount specified, unless it is shown that such failure is due to reasonable cause, shall be charged, in addition to the amount of tax owed the Town, interest thereon at the rate of 1 1/2% per month until such debt is fully paid. If such debt remains unpaid by the time of expiration of the license to rent the property concerning which the rental tax has not been paid, a renewal rental license shall not be issued with regard to such property. For any violation of this article or for the failure to pay the tax due pursuant to this article, the person receiving rent and/or the owner of the premises shall be subject to a penalty of not less than $50 and not more than $500 per day and shall pay the cost of prosecution, including the Town's reasonable attorney's fees. Each day that such violation continues shall be deemed a separate offense punishable by like fine or penalty. The Town may proceed to collect delinquent and unpaid taxes by suit or other legal means.
For purposes of initial implementation of the rental tax program of this article, the Town Clerk is authorized and directed to send to each property owner notification of the adoption of the Gross Receipts Rental Tax Ordinance on or before August 1, 2006. The Town Clerk is further authorized and directed to take any steps deemed necessary to ensure the full compliance with the provision of this article and to ensure that such provisions will be carried out in a fair and consistent manner. These steps shall include appropriate efforts to gain the fullest possible cooperation on the part of all rental agencies licensed to do business in the Town.
The provisions of this article shall become effective July 1, 2006; provided, however, notice provisions shall become effective immediately.