SB 175 Summary

• Amends Delaware's income tax withholding requirements for nonresidents selling or exchanging Delaware real estate by providing multiple alternative filing options instead of a single method.

• Allows nonresidents to file one of three forms: a Declaration of Estimated Income Tax using highest marginal rates, an alternative form calculating tax on net proceeds after lien payoffs, or a form declaring the transaction is exempt from capital gains recognition or qualifies for gain exclusion under federal law.

• Adds two new definitions for "transfer under a deed in lieu of foreclosure" and "transfer under a foreclosure of a mortgage or other lien instrument" to specify which transactions are exempt from withholding requirements.

• Extends the same withholding alternatives to nonresident pass-through entities (like partnerships and LLCs) and nonresident corporations, allowing them to file forms on behalf of their nonresident members or declaring foreclosure-related exemptions.

• Takes effect July 1, 2018.