MEMORANDUM OPINION AND ORDER
CCA Pаrtnership, a Chapter 11 debtor, has moved for summary judgment on its complaint against the Director of Revenue, State of Delaware. CCA seeks a declaratory judgment to the effect that a proposed transfer of its real estate is exempt from the Delaware Realty Transfer *697 Tax by virtuе of § 1146(c) of title 11, United States Code which provides:
The issuance, transfer, or exchange of a security, or the making or delivery of an instrument of transfer under a plan confirmed under section 1129 of this title, may not be taxed under any law imposing a stamp tax or similar tax.
The Director’s position is that only the portion of tax imposed on the grantor (CCA) is exempt and the portion imposed on the grantee is not exempt. The pertinent provisions of the Delaware Realty Transfer Tax law are as follows:
Every person who makes, executes, delivers, accepts or presents for rеcording any document, except as defined or described in § 5401(4) of this title, or in whose behalf any document is made, executed, delivered, acсepted or presented for recording shall be subject to pay for and in respect to the transaction, or any part thereof, a rеalty transfer tax at the rate of 2 percent of the value of the property represented by such document, which tax shall be payablе at the time of making, execution, delivery, acceptance or presenting of such document for recording. Said tax is to be appоrtioned equally between grantor and grantee.
30 Del.C. § 5402(a).
The payment of the tax imposed by this chapter shall be evidenced by the affixing of a documentary stamp or stamps to every document by the person making, executing, delivering or presenting such document for recording.
30 Del.C. § 5405(a).
No document upоn which tax is imposed by this chapter shall be recorded in the office of any recorder of deeds of any county of this State, unless proof оf the payment of the realty transfer tax appears on the document as is provided in § 5405(a) of this title.
30 Del.C. 5408.
As between the parties to any transaction which js subject to the realty transfer tax imposed by this chapter, in the absence of an agreement to the contrary, the burden for paying the tax shall be on the grantor.
30 Del.C. § 5412
The following facts, essential to a determination of the issue, are not in dispute. The debtor and bondholders committee jointly sponsored a plan that was confirmed December 18, 1986. The plan provided for the sale of debtor’s principal asset, a nursing home facility, for $7,400,000 cash. Pursuant to the plan, debtor entered into an agreement for sale of assets dated December 1, 1986 with Beverly Enterprises. The agrеement provides for payment by debtor of all applicable real estate transfer taxes. No argument was made that this contractual provision affects the statutory liability for the tax.
The Director concedes that the Delaware Realty Transfer Tax is a stamp tax or similar tаx within the meaning of 11 U.S.C. § 1146(c) but that only the debtor’s activity — the making or delivery of an instrument of transfer — is exempt; not the buyer’s activity — accepting and presеnting the deed for recording.
In support of his position, the Director appears to rely on the court’s comments in
Director of Revenue v. Barry,
Del.Super.,
But we see nothing in this section quoted (i.e. 11 U.S.C. § 267 the predecessor of § 1146(c)) to relieve another party to the transaction, thе grantee, the grantee who accepted the deed and presented it for recording. It is no detriment to an insolvent’s estate to impose a tax on a solvent purchaser of assets. The purchaser is liable under the state law and under the state decisions, and there is nothing in the Federal Bankruptcy Act to exempt him. 11 Pa.D. & C.2d at 586.
This holding too narrowly construes the exemption granted in § 1146(c) in that it runs contra to the definition that a stamp
*698
tax is a tax on the instrument of transfer not the parties to the transfer or the act of recording the transfer.
See In re Jacoby-Bender, Inc.,
This conclusion is not contrary to the rules of statutory сonstruction nor has Congress exceeded its constitutional authority as the Director has argued. The Director is correct in stating that as a general rule grants of tax exemptions are given a strict interpretation against the assertions of the taxpayer and in favor of the taxing powеr but it is equally true that such interpretation may not be so literal and narrow as to defeat the exemption’s purpose. Moreover, as pointed out by the debtor, a remedial statute such as the bankruptcy law should be liberally construed. 3 Sutherland,
Statutory Construction,
§§ 60.01, 60.02, 66.09 (4th ed. 1974). The Director has conceded that thе Code seeks to provide the debtor an unburdened opportunity to resolve its debts and start anew. Yet, the imposition of such a tax will frustrate that рurpose. Such a tax “certainly will affect greatly the price gotten by the estate.”
In re Cantrup,
Congress through its bankruptcy power (Article I, § 8(4)) may circumvent the states’ powеr to tax implicit in the Xth Amendment. The United States Supreme Court has held that “[t]he Constitution grants Congress exclusive power to regulate bankruptcy and under this рower Congress can limit the jurisdiction which courts, state or federal, can exercise over the person and property of a debtor who duly invokes the bankruptcy law.”
Kalb v. Feuerstein,
For the foregoing reasons, the Director may not divide liability for a stamp or similar tax among the parties to a transaction under a сonfirmed plan between debtor grantor and a solvent grantee. Once an instrument becomes exempt, it remains exempt throughout the transaction.
An order is attached.
ORDER
AND NOW, February 19, 1987, for the reasons stated in the attached Memorandum Opinion, the plaintiff/debtor’s motion for summary judgment is GRANTED, AND IT IS SO ORDERED.