DIVISION OF REVENUETECHNICAL
INFORMATION MEMORANDUM 98-1
April 24, 1998
SUBJECT: FINAL "CHECK THE BOX" REGULATIONS
Purpose of Regulation -- The purpose of this regulation is to explain the relationship
between the classification of organizations for federal and state tax purposes and the
procedures for electing entity classification.
Authority to make regulations; general information --
(i) The Director of Revenue is charged with the administration and
enforcement of all state tax laws unless such duties are expressly conferred upon another
agency. Title 30 Delaware Code §563
(ii) Published regulations are made and promulgated pursuant to
authority vested in the Director.
30 Del. C. §563
(iii) As used in published regulations, references to a section (§)
number refer to a section of the Delaware Code. References to a section (§) number
preceded by a "l", as in §1.502.1, refer to sections of regulations published
by the Division of Revenue of this State.
REGULATION:
§1.502.1 In general; Classification of organizations for state tax purposes;
election of entity classification.
(a) Meaning of terms -- Any term used in these
regulations shall have the same meaning as when used in a comparable context in the laws
and income tax regulations of the United States referring to federal income taxes, unless
a different meaning is clearly required. Any reference to the laws of the United States or
to the Internal Revenue Code shall mean the Internal Revenue Code of 1986 [26 U.S.C. §l
et seq.] as amended and regulations and amendments thereto and other laws of the United
States relating to federal income taxes, as the same may be or become effective, for the
taxable year.
(b) Classification of entities -- The
classification of entities for Delaware tax purposes shall be as prescribed for federal
tax purposes. Unless inconsistent with Delaware law, the provisions of Sections
301.7701-1; 301.7701-2; and 301.7701-3 of the Regulations to the Internal Revenue Code of
1986 are hereby adopted for Delaware purposes.
(c) Notice of election to be classified as a
corporation -- A business entity electing to be classified as a corporation for federal
tax purposes shall attach a copy of Internal Revenue Service Form 8832, "Entity
Classification Election" to its Delaware Corporate Income Tax Return, Form 1100, for
its first taxable year ending after the date of this Regulation.
(d) Tax return requirements --
(1) In general -- Members or partners of a
business entity which has not elected to be classified as a corporation and which does
business in this State shall be subject to the filing requirements of Title 30 of the
Delaware Code for all such years in which the business entity does business in this state.
