IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

WILLIAM DONATO and )

ROSA DONATO, )

) 

Appellants, )

)

v. ) C.A. No. N22A-10-004 SKR

) 

DIRECTOR OF REVENUE, )

)

Appellee. )

Submitted: March 29, 2023

Decided: June 22, 2023

ORDER

Upon Consideration of an Appeal from the Tax Appeal Board:

AFFIRMED.

This 22

nd day of June 2023, upon consideration of the parties’ briefs and 

submissions and the record below, it appears to the Court that:

1. Pro se appellants William and Rosa Donato appealled the Delaware 

Tax Appeal Board’s (the “Board”) July 22, 2022 ruling that their 2018 

and 2019 wages constituted income subject to Delaware personal 

income tax.1 They also appealled the Board’s order that they reimburse 

the Division of Revenue (the “Division”) in the amount of $4,430.05, 

1 Appellants’ Notice of Appeal (Trans. ID. 68255113).
2

which was erroneously refunded to them in 2019.

2

 In essence, the 

Donatos assert that the Board erred because it failed to recognize that

the income they earned in Delaware was not subject to state income 

tax.

3

2. Initially, the Donatos filed their calendar year 2019 Delaware 

Individual Resident Income Tax Return (the “2019 Original Return”) 

in early 2020.

4

 Through the 2019 Original Return, the Donatos: (1) 

reported that they collectively earned $117,636.00 in wages; (2) paid

state income tax in the amount of $4,322.00; and (3) claimed a refund 

of $469.00.5 The Division refunded the $469.00 to the Donatos as 

requested.6

3. Then, on March 9, 2020, the Donatos filed an amended 2019 Delaware 

Individual Resident Income Tax Return (the “2019 Amended 

Return”).7 Through the 2019 Amended Return, the Donatos claimed a 

revised refund of $4,322.00 for their 2019 wages – or, in other words, 

the entire amount of state income tax that they paid through the 2019 

2 Appellants’ Op. Br. (Trans. ID. 68732422) at 1.

3 See generally Appellants’ Notice of Appeal (Trans. ID. 68255113). 

4

July 22, 2022 Decision and Order of the Tax Appeal Board (“Board’s Decision and 

Order”) at 2.

5

Id.

6

Id.

7

Id.
3

Original Return.8 The Division (ostensibly in error) issued the refund 

to the Donatos with interest in the amount of $4,305.00.9

4. Also on March 9, 2020, the Donatos filed an amended 2018 Delaware 

Individual Resident Income Tax Return (the “2018 Amended 

Return”).10 As with the 2019 Amended Return, the 2018 Amended 

Return claimed a refund for the total amount of income taxes paid for 

the 2018 calendar year.11

5. On December 17, 2020, the Division notified the Donatos that it was 

rejecting their 2018 Amended Return and revising their 2019 Amended 

Return to reflect that they still owed income tax for their 2019 wages.12 

After sending the notice, the Director of Revenue issued a Notice of 

Proposed Assessment (“NOPA”) showing a balance due, inclusive of 

interest and penalties, in the amount of $4,835.24.13

6. The Donatos filed an administrative protest of the NOPA, which the 

Division rejected through a Notice of Determination (“NOD”) on 

8

Id.

9

Id. at 2-3.

10 Id. at 3.

11 Id.

12 Id.

13 R. on Appeal, Stipulation of Facts, Feb. 8, 2022 (“Stipulation”) at ¶ 7.
4

August 3, 2021.14 Thereafter, the Donatos appealed the NOD to the 

Board.15 

7. In a Decision and Order dated July 22, 2022, the Board upheld the NOD 

and found the wages reported by the Donatos’ employers on their W-2 

Forms to be taxable income pursuant to 30 Del. C. §§ 1101 and 1105.16 

Accordingly, the Board ordered the Donatos to “pay Delaware income 

tax on all of the 2019 wages . . . [and] return the $4,430.05 refund they 

received . . . .”17 The Board issued a Final Order setting forth the 

Donatos’ financial obligations on September 14, 2022,18 and the 

Donatos appealed the Board’s Decision to this Court on October 14, 

2022.19

8. In reviewing a decision of the Board, the Court must take due account 

of the experience and specialized competence of the Board, and the 

purposes of the basic law under which the Board has acted.20 The 

14 Id. 

15 Id.

16 Board’s Decision and Order at 4-8.

17 Id. at 8.

18 Sept. 14, 2022, Final Order of the Tax Appeal Board. 

19 See Notice of Appeal. Because the Board’s Decision and Order and Final Order 

comprise the overall determination challenged in this appeal, the Court will refer to 

both orders collectively as the “Decision.”

20 Professional Staff Leasing Corp. v. Director of Revenue, 2005 WL 2158711, at *2 

(Del. Super. July 7, 2005).
5

Court’s review is limited to a determination of whether the Board’s 

decision was supported by substantial evidence and correct as a matter 

of law.21

9. Briefly, the Court notes that the Donatos’ Opening Brief raises, for the 

first time, the contention that “[i]ncome tax is an excise tax arising only 

upon the happening of distinguished taxable events.”22 Substantively 

meritless as this argument may be, it is also procedurally improper.

23

 

When the Superior Court acts in its appellate capacity, it “will not 

consider issues not raised before the [administrative] tribunal.”24 

Therefore, the Donatos cannot appropriately join the “excise tax” claim 

with the rest of their appeal, and the Court will not consider it.

10.The remainder of the Donatos’ appeal amounts to a stream of 

consciousness complaint that the Delaware Tax Code’s use of the word 

“federal” in “federal adjusted gross income” renders all income not 

derived from the federal government and related entities untaxable.25 

For example, the Donatos offer:

21 United Water Delaware, Inc. v. Public Service Com’n, 723 A.2d 1172, 1173 (Del. 

1999).

22 Op. Br. at 2.

23 See Wilmington Trust Co. v. Conner, 415 A.2d 773, 781 (Del. 1980).

24 Tatten Partners, L.P. v. New Castle Cnty. Bd. of Assessment Review, 642 A.2d 

1251, 1262 (Del. Super. 1993).

25 R. on Appeal, Appellants’ Basis for Appeal and Jurisdiction at 2.
6

. . . Under the “includes” rule the definition of employee 

at 3401(c) embraces any variety of federal worker-- even 

those not described (some of which may not even exist at 

the time the definition is written). All such, listed in the 

statutory definition or not, are within the general class 

defined and circumscribed by the illustrative examples 

that ARE listed or described. At the same time, this 

“indefiniteness” in the statutory definition is “calculated” 

in that it can’t be construed to embrace workers NOT 

having the characteristics of members of the class which 

are listed and by which the class’s nature is illustrated.

This means that while any kind of federal worker can be 

deemed an “employee” (whose renumeration received as 

such qualifies as “wages”) NON-federal workers, being 

unrepresented in the illustrative list provided by Congress, 

cannot be deemed to be such “employees”, and the pay to 

such excluded workers cannot be deemed “wages”.26

That continues for seventeen pages.

11.Delaware law, however, makes plain that compensation for services 

constitutes taxable income.27 Title 30 Del. C. § 1105 states that taxable 

income shall be federal adjusted gross income with the modifications, 

and less the deductions and personal exemptions, provided in that 

subchapter.28 This interpretation tracks with the federal tax code, as 

“[a]ny term used in [the Delaware Tax Code] should have the same 

meaning as when used in [the federal tax code], unless a different 

26 Op. Br. at 10-11 (emphasis in original).

27 Slater v. Director of Revenue, 1989 WL 16957, at *1 (Del. Super. Feb. 28, 1989).

28 30 Del. C. § 1105.
7

meaning is clearly required.”29 The federal tax code defines “gross 

income” as “all income from whatever source derived,”

30 and “adjusted 

gross income” as income minus certain enumerated deductions.31

12.In other words, it is apparent that the amounts reflected by the Donatos’ 

employers on their W-2 Forms are taxable as gross income.32 Any 

argument to the contrary is patently frivolous.

33

29 Id. § 1101.

30 26 U.S.C. § 61.

31 26 U.S.C. § 62.

32 See Beard v. Comm’r of IRS, 82 T.C. 766, 773 (T.C. 1984) (“There is no doubt 

that such amounts [reflected on the W-2 Form] are taxable as gross income.”).

33 See United States v. Connor, 898 F.2d 942, 943 (3d Cir. 1990) (“[W]ages are 

income within the meaning of the Sixteenth Amendment. Unless subsequent 

Supreme Court decisions throw doubt on this conclusion, [the Court] will view 

arguments to the contrary as frivolous . . . .”).
8

13.“Every court which has ever considered the issue has unequivocally

rejected the argument that wages are not income.”34 The Decision of 

the Board is AFFIRMED. The Donatos are required to reimburse the 

Division the sum of $4,430.05 that was refunded in error pursuant to 

the 2019 Amended Return, as well as any applicable interest, fees, and 

penalties that may be assessed in accordance with Delaware law.

IT IS SO ORDERED.

_____________________

Sheldon K. Rennie, Judge

Original to Prothonotary

Cc: William Donato and Rosa Donato, Townsend, DE, 19743.

Anthony Testa, Jr., Esq., Rebecca Song, Esq., Deputy Attorneys 

General, Wilmington, DE.

34 Id.