Deleware Tax Changes - October 2024
Week Of 10.07.2024
Delaware Cigarette, Alcohol & Miscellaneous Taxes—Delaware enacts annual hospital assessment.
L. 2024, S13 (c. 476), effective 10/01/2024, beginning with the fiscal year of July 1, 2025 through July 30, 2026 (i.e., the initial enactment period), imposes a "hospital quality assessment" on Delaware hospitals, equal to the following percentage of the hospital's net patient revenue during the taxable year: (1) 1.79% for the initial enactment period; and (2) 3.58% for each subsequent year after the initial enactment period.
Week Of 09/30/2024
Delaware Personal Income Tax:
- Military Pension Definition: A "United States military pension" is now defined as a pension received for service in the Army, Navy, Air Force, Marine Corps, Space Force, Coast Guard, National Oceanic and Atmospheric Administration, Public Health Service, or National Guard. This definition clarifies which pensions qualify for the income tax exclusion.
Delaware Sales and Use Taxes:
- Short-Term Rental Lodging Tax: A new 4.5% tax is being imposed on short-term rentals for stays of 31 consecutive nights or less. This tax applies to various types of residential dwelling units rented to tourists or transient guests.
- Accommodations Intermediaries: Companies that facilitate short-term rentals (like Airbnb or VRBO) are responsible for collecting and remitting the tax, unless they have a contractual arrangement with a hotel or motel to do so.
- County Lodging Tax: New Castle and Sussex Counties are authorized to impose an additional lodging tax of up to 3% on short-term rentals.
- License Requirement: Accommodation intermediaries must obtain a license and pay a $25 annual fee starting on December 29, 2024.
These changes are designed to clarify tax rules and generate revenue from the growing short-term rental market in Delaware.
Delaware Property Tax Updates: Key Changes and Exemptions
Delaware has recently enacted legislation making significant changes to its property tax system. Here's a summary of the key updates:
1. County Property Tax Assessment Provisions Amended
- Effective September 19, 2024, Delaware has amended various county property tax assessment provisions, impacting how property is assessed and how property owners are notified.
- Key changes include:
- Electronic Notices: Property owners who have provided an email address can now receive required notices electronically.
- Fair Market Value Assessment: Property must be assessed at its fair market value as of the date of the most recent reassessment base year in the county.
- Mobile Home Assessment and Taxation: Assessments for mobile homes must be developed in the same manner as real property, based on market value. Mobile homes will be taxed at the same rate as real property in the county and school district.
2. School Property Tax Exemption for Affordable Housing
- The Todmorden Foundation's real estate used for affordable housing purposes is now exempt from school property taxes.
- This exemption was enacted through legislation effective September 19, 2024.
For complete details, please refer to the relevant Delaware legislation:
- L. 2024, H403 (c. 412): Amendments to County Property Tax Assessment Provisions
- L. 2024, S78 (c. 415): School Property Tax Exemption for Affordable Housing
Week Of 10.07.2024
Delaware Cigarette, Alcohol & Miscellaneous Taxes—Delaware enacts annual hospital assessment.
L. 2024, S13 (c. 476), effective 10/01/2024, beginning with the fiscal year of July 1, 2025 through July 30, 2026 (i.e., the initial enactment period), imposes a "hospital quality assessment" on Delaware hospitals, equal to the following percentage of the hospital's net patient revenue during the taxable year: (1) 1.79% for the initial enactment period; and (2) 3.58% for each subsequent year after the initial enactment period.
Week Of 09.30.2024
Delaware Personal Income Tax—Delaware defines military pension for purposes of income tax exclusion.
L. 2024, S329 (c. 437), effective 09/26/2024, for purposes of the personal income tax exclusion for military pensions, defines a "United States military pension" as a pension received as the result of an individual's service in the Army, Navy, Air Force, Marine Corps, Space Force, Coast Guard, the commissioned corps of the National Oceanic and Atmospheric Administration, the commissioned corps of the Public Health Service, or the National Guard.
Delaware Sales & Use Taxes—Delaware enacts short-term rental lodging tax.
L. 2024, H168 (c. 474), effective 09/30/2024 and as otherwise provided, for short-term rental agreements entered into after December 31, 2024, imposes a short-term rental lodging tax at the rate of 4.5% of the rent upon every occupancy of a short-term rental. Accommodations intermediaries are responsible for collecting and remitting the tax unless the accommodations intermediary has a contractual arrangement with a hotel, motel, tourist home, or other accommodations intermediary to collect the tax. An "accommodations intermediary" is defined as any person engaged in the business of facilitating or arranging a short-term rental to an occupant on a website or through other means, including the renting of properties subject to a timeshare plan. A "short-term rental" means a house, duplex, multiplex, apartment, condominium, houseboat, trailer, or other residential dwelling unit where a tourist or transient guest, for consideration, rents sleeping or living accommodations for no more than 31 consecutive nights. The legislation also authorizes New Castle and Sussex Counties to impose a county lodging tax of up to 3% on short-term rentals. Effective December 29, 2024, accommodation intermediaries must obtain a license and pay an annual license fee of $25.
Delaware Property Tax—Delaware amends various county property tax assessment provisions.
L. 2024, H403 (c. 412), effective 09/19/2024, among other provisions, provides that, in all counties: (1) any required notice may be sent by e-mail when the property owner has provided an electronic mail address; (2) property must be assessed at its fair market value as of the date of the most recent reassessment base year in the county; and (3) assessments for mobile homes must be developed in the same manner as real property and be predicated on market value, and mobile homes must be taxed at the same rate as the real property in the county and school district.
Delaware Property Tax—Delaware school property tax exemption.
L. 2024, S78 (c. 415), effective 09/19/2024, exempts from school property taxes real estate owned by the Todmorden Foundation and used for the purposes of affordable housing.
Week Of 10.07.2024
Delaware Cigarette, Alcohol & Miscellaneous Taxes—Delaware enacts annual hospital assessment.
L. 2024, S13 (c. 476), effective 10/01/2024, beginning with the fiscal year of July 1, 2025 through July 30, 2026 (i.e., the initial enactment period), imposes a "hospital quality assessment" on Delaware hospitals, equal to the following percentage of the hospital's net patient revenue during the taxable year: (1) 1.79% for the initial enactment period; and (2) 3.58% for each subsequent year after the initial enactment period.
Week Of 09.30.2024
Delaware Personal Income Tax—Delaware defines military pension for purposes of income tax exclusion.
L. 2024, S329 (c. 437), effective 09/26/2024, for purposes of the personal income tax exclusion for military pensions, defines a "United States military pension" as a pension received as the result of an individual's service in the Army, Navy, Air Force, Marine Corps, Space Force, Coast Guard, the commissioned corps of the National Oceanic and Atmospheric Administration, the commissioned corps of the Public Health Service, or the National Guard.
Delaware Sales & Use Taxes—Delaware enacts short-term rental lodging tax.
L. 2024, H168 (c. 474), effective 09/30/2024 and as otherwise provided, for short-term rental agreements entered into after December 31, 2024, imposes a short-term rental lodging tax at the rate of 4.5% of the rent upon every occupancy of a short-term rental. Accommodations intermediaries are responsible for collecting and remitting the tax unless the accommodations intermediary has a contractual arrangement with a hotel, motel, tourist home, or other accommodations intermediary to collect the tax. An "accommodations intermediary" is defined as any person engaged in the business of facilitating or arranging a short-term rental to an occupant on a website or through other means, including the renting of properties subject to a timeshare plan. A "short-term rental" means a house, duplex, multiplex, apartment, condominium, houseboat, trailer, or other residential dwelling unit where a tourist or transient guest, for consideration, rents sleeping or living accommodations for no more than 31 consecutive nights. The legislation also authorizes New Castle and Sussex Counties to impose a county lodging tax of up to 3% on short-term rentals. Effective December 29, 2024, accommodation intermediaries must obtain a license and pay an annual license fee of $25.
Delaware Property Tax—Delaware amends various county property tax assessment provisions.
L. 2024, H403 (c. 412), effective 09/19/2024, among other provisions, provides that, in all counties: (1) any required notice may be sent by e-mail when the property owner has provided an electronic mail address; (2) property must be assessed at its fair market value as of the date of the most recent reassessment base year in the county; and (3) assessments for mobile homes must be developed in the same manner as real property and be predicated on market value, and mobile homes must be taxed at the same rate as the real property in the county and school district.
Delaware Property Tax—Delaware school property tax exemption.
L. 2024, S78 (c. 415), effective 09/19/2024, exempts from school property taxes real estate owned by the Todmorden Foundation and used for the purposes of affordable housing.