(a) Any nonresident person or firm, whether incorporated or not, either doing business in this State, so as to be subject to Delaware income tax or state occupational or business licenses, or having employees or agents performing labor or services in this State, so as to subject such employees or agents to Delaware income tax and such employer to Delaware income tax withholdings and to the Delaware Unemployment Compensation Law, shall file a surety bond with the Department of Finance, payable to the State, to guarantee the payment of state income taxes, state occupational or business licenses, unemployment compensation contributions and income taxes withheld from wages of employees, together with any penalties and interest thereon, the form and contents of such bond and the amount thereof to be approved and fixed by the Department of Finance in such amount as shall be sufficient to protect the tax revenues of the State, except as otherwise provided in this section.
(1) The amount of the surety bond to be required of any nonresident contractor or subcontractor required to be licensed under Chapter 25 of this title shall be as follows:
6% of the contract or subcontract price on all contracts of $20,000 or more, or 6% of contractor's or subcontractor's estimated cost-and-profit under a cost-plus contract of $20,000 or more. When the aggregate of 2 or more contracts in 1 calendar year is $20,000 or more, the amount of the bond or bonds shall be 6% of the aggregate amount of such contracts. The Division of Revenue may by regulation prescribe cash bonds in lieu of the foregoing and shall deposit such cash bonds in a special fund of the State to be established for this purpose.(2) The surety bond shall be filed before construction is begun in this State by the nonresident contractor or subcontractor on any contract the price of which is $20,000 or more, or the estimated cost and profit of which is $20,000 or more, and before construction is begun in this State by such nonresident contractor or subcontractor on any contract for less than $20,000 when the amount of the contract when aggregated with any other contracts on which construction was begun by such nonresident contractor or subcontractor in the same calendar year equals or exceeds $20,000.
(3) If the Department concludes that no bond is necessary to protect the tax revenue of this State, the requirements of this section may be waived in whole or in part by the Secretary of Finance or the Secretary's designated departmental representative. Any bond issued pursuant to this section shall remain in force until the liability thereunder is released by the Secretary or the Secretary's designated departmental representative.
(b) Any person or firm subject to this section shall notify the Department of the termination of business within this State within 20 days after such termination or, as to a construction contractor or subcontractor, within 20 days after the completion of every such construction project in this State.
(c) In the case of any person or firm failing or refusing to comply with this section, there shall be assessed by the Secretary of Finance a civil penalty of not more than $10,000 for each such occurrence.
(d) Any person or firm who wilfully or knowingly fails or refuses to comply with this section shall be guilty of a misdemeanor and shall upon conviction be punishable by a fine not to exceed $3,000, or imprisonment not to exceed 6 months, or both.
(e) The definition of the terms “nonresident contractor” or “subcontractor” as used in paragraphs (a)(1) and (2) of this section is the same as defined at § 2501 of this title.
(f) As to each specific construction project in this State, upon the request of the nonresident engaged as a contractor or subcontractor within the meaning of subsection (e) of this section who establishes to the satisfaction of the Department that such nonresident is in compliance with all the provisions of this section applicable to such nonresident, the Department shall issue to such nonresident a certificate of compliance on a form prescribed by the Department.
(g) In lieu of the surety bond required under subsection (a) of this section, the Director of Revenue may accept bank letters of credit in the amount specified by and subject to the same conditions as contained in that subsection; provided, however, that any such letter is in a form approved by the Director, is issued or confirmed by a bank meeting whatever requirements the Director may by regulation prescribe, and the Director is satisfied that the letter is sufficient to protect the tax revenue of the State.