[HISTORY: Adopted by the City Council of the City of Lewes
as indicated in article histories. Amendments noted where applicable.]
GENERAL REFERENCES
Mercantile licensing — See Ch. 128.
[Adopted 10-12-1987[1]]
As used in this article, the following definitions shall be
applicable unless the context clearly indicates a different meaning:
Includes any instrument or writing pursuant to which title
or possession of any real estate within the corporate limits of the
City and any land outside the corporate limits of the City but under
the jurisdiction of the City pursuant to 57 Del. Laws, c. 170, § 33,[1] 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 § 172-2, and shall include the following:
[Amended 8-13-1990]
Except as provided in Subsections B and C hereof where beneficial ownership in real estate is transferred through a conveyance or series of conveyances of intangible interest in a corporation, partnership or trust, such conveyance shall be taxable under this article as if such property were conveyed through a duly recorded document as defined herein and subject to the exemptions contained herein, except those exemptions contained in § 172-2J and N.
No bona fide pledge of stock or partnership interest as loan
collateral nor any transfer of publicly traded stock or publicly traded
partnership interest shall be deemed subject to taxation under this
article.
Where the beneficial owners of real property prior to the conveyance
or series of conveyances referred to in this section own 80% or more
of the beneficial interest in the real estate following said conveyance
or conveyances, such transfer shall not be subject to tax under this
article. Where the beneficial owner of real property prior to the
conveyance or series of conveyances referred to in this article own
less than 80% of the beneficial interest in the real estate following
said conveyance or conveyances, such transfer shall not be subject
to tax under this article unless determined by the City Manager to
be properly characterized as a sale of real property. Such characterization
shall take into account the timing of the transaction, beneficial
ownership prior to and subsequent to the conveyance or conveyances,
the business purpose of the corporation, partnership or trust, and
such other factors as may be relevant.
Any deed, lease, instrument or writing whereby any real estate
within the corporate limits of the City and any land outside the corporate
limits of the City but under the jurisdiction of the City pursuant
to 57 Del. Laws, c. 170, § 33,[2] or any interest therein, shall be quitclaimed, bargained,
sold, leased or otherwise conveyed to the grantee.
[Amended 8-13-1990]
There shall be included in this definition any contract or other
agreement or undertaking for the construction of all or a part of
any building, all or a portion of which contract, agreement or undertaking
(or any amendment to the foregoing) is entered into, or labor or materials
are supplied, either prior to the date of the transfer of the land
on which the building is to be constructed or within one year from
the date of the transfer to the grantee.
[Added 7-13-1998]
No building permit shall be issued for any such building unless
and until the person or persons (including corporations or other associations)
requesting such permit shall demonstrate in whatever form may be specified
by the Mayor and City Council a form of affidavit, that:
No transfer as described in this section has occurred within
the preceding year;
No portion of the contract for construction for which the permit
is requested was entered into and no materials or labor with respect
to the building have been provided within one year of the date on
which the property was transferred; or
There has been paid a realty transfer tax on the document as
defined in this article.
In addition no certificate of occupancy shall be issued relative
to any building on which a tax was provided by this article unless
and until the owner recertifies the actual cost of the building and
pays an additional tax due as a result of such recertification.
A "building" for purposes of this subsection shall mean any
structure having a roof supported by columns or walls, which structure
is intended for supporting or sheltering any use or occupancy, but
shall not include any alteration of or addition to an existing building
where the cost of said alteration or addition is less than 50% of
the value of the property transferred.
A "transfer" for purposes of this subsection shall include any transfer made by a "deed" as described in this article, other than this subsection, and shall not include any transaction excluded from the definition of "deed" under the provisions of § 172-2.
Includes any document in writing transferring or purporting
to transfer a title or possessory interest by a seller, vendor, lessor,
assignor or transfer to any purchaser, buyer, vendee, lessee, assignee
or transferee in or to any of the following:
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.
An interest in land owned by another or improvements owned by
another located on land owned by another, or both, for a determinable
term of five years or more.
The exercise of any right or option to renew or extend the title
or possessory interest in an existing document or instrument in writing
where 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 deed or lease as defined herein.
Includes in the case of a deed the amount of actual consideration
thereof, including liens or other encumbrances thereon and ground
rents or a commissary part of the liens or other encumbrances thereon
and ground rents where such liens and encumbrances and ground rents
also encumber or are charged against other lands, tenements or hereditaments,
provided that where such documents set forth a small or nominal consideration,
"value" 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 other document without consideration, from the actual
monetary worth of the property granted, bargained, sold, leased or
otherwise conveyed, which, in either event, shall not be less than
the amount of assessment of such lands, tenements or hereditaments
as shown on the books of the City.
As used in this article, document, deed and lease shall not
include any of the following:
A.
Any conveyance by will.
C.
Any conveyance between corporations operating housing projects pursuant
to Delaware Code, Title 31, Chapter 45, and the shareholders thereof.
D.
Any conveyance between nonprofit industrial development agencies
and industrial corporations purchasing from them.
E.
Any conveyance to nonprofit industrial development agencies.
F.
Any conveyance between husband and wife.
G.
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 a final decree in the 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 of divorce.
[Amended at time of adoption of Code (see Ch. 1, General
Provisions, Art. II)]
H.
Any conveyance between parent and child or the spouse of such a child.
I.
Any conveyance:
(1)
To a trustee, nominee or straw party for the grantor as a beneficial
owner;
(2)
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
(3)
From a trustee, nominee or straw party to the beneficial owner.
J.
Any conveyance between a parent corporation and a wholly owned subsidiary
corporation, provided that such conveyance is without actual consideration.
[Amended at time of adoption of Code (see Ch. 1, General
Provisions, Art. II)]
K.
Correctional deeds without actual consideration.
L.
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.
[Amended at time of adoption of Code (see Ch. 1, General
Provisions, Art. II)]
M.
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 be applicable to any distribution and 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 years;
and provided further that this exemption 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 years.
[Amended at time of adoption of Code (see Ch. 1, General
Provisions, Art. II)]
N.
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.
[Amended at time of adoption of Code (see Ch. 1, General
Provisions, Art. II)]
O.
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.
P.
Any conveyance to a religious corporation 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 corporation or other body or person holding title to real estate for a religious corporation under § 172-3 of this article shall be exempt.
R.
Any mortgage.
S.
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 § 172-3 shall be exempt.
[Added 7-13-1998]
T.
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)].
[Added 7-13-1998]
U.
Any conveyance to a nonprofit conservation organization when the
property is purchased for open space preservation purposes.
[Added 7-13-1998]
V.
Any conveyance of a "mobile home," defined as a manufactured home,
transportable in one or more sections, which, in the traveling mode,
is eight body feet or more in width and 40 body feet or more in length,
or when erected on site as 320 or more square feet; is built on a
permanent chassis, designed to be used as a year round dwelling with
or without a permanent foundation when connected to the required utilities,
and is manufactured since June 15, 1976, has been built in accordance
with the National Manufactured Home Construction and Safety Standards
[this definition is found in 25 Del. Code § 7003(2)]; provided,
however, that tax on said conveyance has been paid pursuant to 30
Del. Code § 3002, Motor Vehicle Document Fee.
[Added 7-13-1998]
W.
Any conveyance between siblings, half-siblings or step-siblings.
[Added 11-13-2000]
X.
Any conveyance
to or from an organization exempt from tax under § 501(c)(3)
of the federal Internal Revenue Code when the purpose of said conveyance
is to provide owner-occupied housing to low- and moderate-income households
by rehabilitating residential properties and reselling said properties
without profit.
[Added at time of adoption of Code (see Ch. 1, General Provisions,
Art. II)]
Y.
Any conveyance
to or from a land bank formed under Chapter 47 of Title 31.
[Added at time of adoption of Code (see Ch. 1, General Provisions,
Art. II)]
A.
Every person who makes, executes, delivers, accepts or presents for recording any document, deed or lease, except as provided in § 172-2, 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 City of Lewes 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.
[Amended 7-13-1998[1]]
[1]
Editor's Note: This resolution also provided as follows:
"Notwithstanding the effective date of the ordinance, the transfer
of any real property within the town pursuant to a valid written contract
entered into prior to the effective date of this ordinance (July 20,
1998) shall be exempt from the provisions of this ordinance which
impose the additional 1/2% tax."
B.
The transfer tax shall be paid by the purchasers in the transaction
in the absence of an agreement to the contrary.
C.
No tax shall be imposed on any conveyance where the actual value
of the property being transferred is less than $100.
D.
Every person who makes, executes, delivers, accepts or presents for
recording any document, deed or lease defined or described in this
article or in whose behalf any such 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 a realty transfer
tax at the rate of 1 1/2%, 1% of which shall be pursuant to the
Charter of The City of Lewes and 1/2% pursuant to 22 Del. C. Ch. 16,
of the value of the property represented by such document, deed or
lease which tax shall be payable as follows:
[Amended 7-13-1998[2]]
(1)
The tax on the consideration attributable to the first year of the
term shall be payable at the time of making, executing, delivery,
acceptance or presenting of such document for recording.
(2)
The tax on the consideration attributable to each successive year
of the term thereafter shall be paid annually to the City Manager.
[2]
Editor's Note: This resolution also provided as follows:
"Notwithstanding the effective date of the ordinance, the transfer
of any real property within the town pursuant to a valid written contract
entered into prior to the effective date of this ordinance (July 20,
1998) shall be exempt from the provisions of this ordinance which
impose the additional 1/2% tax."
E.
There shall be no tax imposed on any document, deed or lease presented
for recording pursuant to a contract executed prior to November 1,
1987.
Where there is a transfer of residential property by a licensed
real estate broker which property was transferred to him within 12
months next preceding the transfer by him as part of the consideration
for the purchase of other residential property, a credit for the amount
of the tax paid at the time of the transfer to the licensed real estate
broker shall be given toward the amount of the tax due upon the transfer.
If the tax due upon the transfer from the licensed real estate broker
is greater than the credit given for the prior transfer, the difference
shall be paid. If the credit allowed is greater than the amount of
the tax due, no refund shall be allowed.
The realty transfer 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 sale before any such proceeds are applied toward any obligation, claim, lien, judgment or estate and of the writ upon which sale is made unless such transfer is exempt pursuant to the provisions of § 172-2O.
The payment of the tax imposed by this article shall be evidenced
by the fixing of a documentary stamp to every document, deed or lease
by the person making, executing, delivering or presenting such document,
deed or lease for recording. Such stamp shall be affixed in such manner
that its removal will require the continued application of steam or
water, the person using or affixing such stamp shall write, stamp
or cause to be written or stamped thereon the initials of his name
and the date upon which such stamp is affixed or used so that such
stamp may not again be used, provided that any other method of cancellation
may be used if it is deemed expedient by the City Manager. The City
Manager may provide through the evidence of payment of the tax to
be shown on the document, deed or lease by means other than the affixing
of documentary stamps.
The City Manager shall prescribe, prepare and furnish stamps
of such denominations and quantities as may be necessary for the payment
of the tax imposed and assessed by this article. The City Manager
shall make provision for the sale of such stamps in such places as
may be deemed necessary.
A.
The City Manager may appoint the Recorder of Deeds, in and for Sussex
County, the Sussex Trust Company, or such other person or persons
within or without the county as agents for the sale of stamps as used
for payment of the tax imposed by this article.
B.
A commission shall be allowed by the City Manager to such agents
of 2% of the face value of the stamps.
No document, deed or lease upon which a transfer tax is imposed
by this article shall be recorded in the office of the Recorder of
Deeds, in and for Sussex County, unless proof of the payment of the
transfer tax appears on the document.
Every document, deed or lease when lodged with or presented
to the Recorder of Deeds, in and for Sussex County, for recording
shall set forth therein as part of such document, deed or lease 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, deed or lease
is not subject to tax under this article.
No person shall commit any of the following acts:
A.
Make, execute, deliver, accept or present for recording or cause
to be made, executed, delivered, accepted or presented for recording
any document, deed or lease without the full amount of tax thereon
being duly paid.
B.
Make use of any documentary stamps to denote payment of the realty
transfer tax without canceling stamp as required by this article.
C.
Fraudulently cut, tear or remove from a document, deed or lease any
documentary stamp or other evidence of payment of the transfer tax.
D.
Fraudulently affix to any document, deed or lease upon which tax
is imposed by this article any documentary stamp or other evidence
of payment of the transfer tax which has been removed from any other
document, any documentary stamp or other evidence of payment of the
transfer tax if insufficient value, any forged or counterfeit stamp
or other evidence of payment of the realty transfer tax or any impression,
forged or counterfeited stamp, dye, plate or other articles.
E.
Willfully remove or alter the cancellation marks of any documentary
stamp or restore any such documentary stamp within intent to use or
cause the stamp to be used after it has already been used or knowingly
buy, sell, offer for sale, give away or use any such altered or restored
stamp to any person for use.
F.
Knowingly have in his possession any altered or restored documentary
stamp which has been removed from any document, deed or lease upon
which the realty transfer tax is imposed by this article, provided
that the possession of such stamp shall be prima facie evidence of
an intent to violate the provisions of this article.
G.
Knowingly or willfully prepare, keep, sell, offer for sale or have
in his possession any forged or counterfeit documentary stamp.
H.
Accept for recording in the office of the Recorder of Deeds, in and
for Sussex County, any document, deed or lease upon which the transfer
tax is imposed without the proper documentary stamp or other evidence
of payment of the transfer tax required by this article and as indicated
in such document, deed or lease or accompanying affidavit.
A.
If any person shall fail to pay any transfer tax imposed by this
article for which he is liable, the City Manager may make a determination
of additional tax and interest due by such person, based upon information
within his knowledge or learned by him. All such determinations shall
be made so that notice thereof shall reach the party or parties against
whom it is made within three years after the recording of the document,
deed or lease.
B.
Promptly after the date of such determination, the City Manager shall
send by certified or registered mail, with return receipt requested
with postage prepaid, a copy thereof to the person against whom it
is made.
C.
Within 90 days after the date upon which the copy of determination
of additional tax was mailed, such person may file with the City Manager
a petition for redetermination of such tax. Every petition for redetermination
shall state specifically the reason or reasons which petition believes
entitles him to such redetermination and shall be supported by affirmation
that it is not for the purpose of delay, and that the facts set forth
therein are true and correct.
D.
It shall be the duty of the City Manager within six months after
the date of any determination to dispose of any petition for redetermination.
Notice of the action taken upon the petition for redetermination shall
be given to the petitioner promptly after the date of redetermination
by the City Manager.
E.
Any person shall have the right to review by a court of competent
jurisdiction any determination made by the City Manager pursuant to
this section.
F.
Interest shall be added to any determination of additional tax and
shall be computed at the statutory rate from the date any transfer
tax shall have been paid to the date paid.
Upon determination that any tax collection pursuant to this
article has been collected improperly, the City Manager shall refund
to the tax payer the sum so paid with interest from the date of payment
at the rate of 9% per annum.
Any person who violates any of the provisions of this article
shall be deemed to be guilty of a misdemeanor and, upon conviction
in a court of competent jurisdiction, shall be fined not less than
$50 nor more than $200 or be imprisoned for a term not to exceed 20
days, or both, and shall pay the costs of prosecution.
This article shall become effective on November 1, 1987.
[Adopted 8-13-2001]
A.
The City Manager is hereby authorized annually and not later than
April 1 of each year to direct a notice and questionnaire to each
property owner and leaseholder, as defined in the Charter, such notice
to advise property owner and leaseholder of the tax imposed for the
rental of rooms, apartments, cabins and houses and of the tax for
each such type of rental, together with a penalty for nonpayment of
such tax. The questionnaire so included shall set forth the following:
|
Questionnaire. [please check the applicable block]
| |||
|
▪
|
I do not intend to rent any property.
|
[_____]
| |
|
▪
|
I rent rooms, rooming home, apartments, cottages, cabins, houses,
a rooming house, tourist home, "bed-and-breakfast inn," boardinghouse.
|
[_____]
| |
|
▪
|
I AM SUBJECT TO THE STATE OF DELAWARE LODGING TAX UNDER
TITLE 30, CHAPTER 61.
|
[_____]
| |
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Signed: __________ Date: _____
| |||
|
THE FEE FOR NONPAYMENT OF TAX IS FROM $50 PER DAY TO $500
PER DAY.
| |||
B.
The questionnaire shall be returnable within 30 days of mailing to
the City of Lewes. Any property owner or leaseholder who does not
complete and return the form shall be presumed to have answered the
question posed in the questionnaire in the negative.
[Amended 4-20-2009]
There is hereby imposed and assessed a gross receipts tax at
the rate of 5% of the rent for 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), other than those that are subject to the State of Delaware's
Lodging Tax under Title 30, Chapter 61. 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 City. 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 City.
As used in this article, the following terms shall have the
meanings indicated:
The use or possession of the right to use or possession of
any property referred to in this article.
Could be individuals, partnerships, firms, associations and
corporations.
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.
[Amended 6-13-2005[1]]
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 City Manager and to pay the City Manager,
for the use of the City, the amount of tax due the City 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 December 1, 2005, through
December 31, 2005.
[1]
Editor's Note: This ordinance also provided that it take
effect 12-1-2005.
The rental tax report form shall be furnished by the City Manager to the owner of the rental property, or designated agent thereof, at the time of issuance of the license required by Chapter 128. It is the responsibility of the owner of the rental property to obtain a rental tax report form from the City Manager.
The contents of the rental tax report form shall be kept confidential
by the City 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 from 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 owned the City, 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 City's
reasonable attorney's fees. Each day that such violation continues
shall be deemed a separate offense punishable by like fine or penalty.
For purposes of initial implementation of the rental tax program of this article, the City Manager is authorized and directed to send to each property owner notification of the adoption of the Gross Receipts Rental Tax Ordinance on or before September 15, 2001. The City Manager is further authorized and directed to send to each property owner the questionnaire, as provided in § 172-16 of this article, on or before April 1, 2002. The City Manager is further authorized and directed to take any steps deemed necessary to ensure the full compliance with the provisions 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 City.
The provisions of this article shall become effective December
1, 2001.
