Form Cra - Combined Registration Application For State Of Delaware Business License And/or Withholding Agent Page 18
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20• Construction trailer rentals
• Building permits, zoning costs or any amount paid to any state, county,
city or municipal government body
• Environmental impact studies
• Utility costs during construction Non-construction services such as:
o Accounting
o Interior Design
o Architectural
o Legal
o Cleaning
o Sanitation
o Engineering
o Scaffolding
o Exterminating
o Security
o Horticultural
o Surveying
o Inspections and/or
o Trash Removal
testing related to
workmanship or
quality of
materials/supplies.
V.
REAL ESTATE DEVELOPERS
Persons engaging in real estate development as defined in Paragraph IV. 5. of this
memorandum are contractors as to a portion of their business activities. In light of the
difficulty of drawing a bright line between non-taxable development and taxable
contractor activities, the Division of Revenue has determined that a tax based upon the
gross proceeds from sales of real estate and any structures erected thereon less deductions
according to the terms of Paragraphs V. 2. through 5. below accurately reflects the proper
amount of gross receipts received by the developer for the portion of his business
activities falling within the definition of “contractor.” The Division reserves the right,
however, to assert, in litigation with any developer seeking to assert a tax liability based
upon a lesser amount than indicated by this calculation, that Delaware statutory law
provides for a tax that is, in fact, greater than the one provided under Paragraph V. of this
memorandum.
1. The developer shall treat as gross proceeds, subject to gross receipts tax, gross
proceeds received from the 'sale of real property with structures (commercial
and/or residential) built thereon. Gross receipts shall not include gross proceeds
received from the sale of real estate which has been improved by the developer as
owner of the property, but upon which no structures have been built (i.e., see Rak
v. Division of Revenue. Delaware Tax Appeal Board Docket #977, September 10,
1990).
2. The developer shall be entitled to deduct, in addition to the statutory monthly
exclusion, at the time of sale and not before, from gross proceeds the developer's
cost of the land and improvements thereto other than structures. In determining
the cost of the land and improvements thereto other than structures, only the
following costs may be included, and they must be allocated on a per lot basis:
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