J. MILLARD TAWES, Governor                     1043

Sec. 2. And be it further enacted, That this Act shall take effect
June 1, 1966.

Approved May 6, 1966.

CHAPTER 595
(Senate Bill 403)

AN ACT to enact a new subsection (b-1) to Section 312 of Article 81
of the Annotated Code of Maryland (1965 Replacement Volume),
title "Revenue and Taxes", subtitle "Income Tax", to extend the
provisions of the withholding tax law to tips reported to the
employer by the employee pursuant to Section 6053 of the Internal
Revenue Code, as amended from time to time.

Section 1. Be it enacted by the General Assembly of Maryland,
That new subsection (b-1) of Section 312 of Article 81 of the Anno-
tated Code of Maryland (1965 Replacement Volume), title "Revenue
and Taxes", subtitle "Income Tax", be and it is hereby added to said
section to follow immediately after subsection (b) thereof and to
read as follows:

312.

(b-1) For the quarterly period beginning July 1, 1966, in com-
puting salary, wages, and compensation subject to the provisions of
this section, the employer shall include all tips reported in written
statements furnished to the employer by the employee pursuant to
Section 6053 of the Internal Revenue Code, as amended from time to
time. Such tips shall be deemed to be paid, for withholding tax pur-
poses, on the date that the employer receives each such written
statement and the employer shall deduct, withhold, and pay over the
tax due and comply with the other provisions of this section accord-
ingly. In the event that the tax to be withheld by the employer on
tips reported exceeds the net wages payable to the employee after
first deducting federal and Maryland income taxes and social security
taxes to be withheld on the wages of the employee and after next
deducting federal income taxes and social security taxes to be with-
held on tips reported, the employer shall be required to withhold
tax on tips reported only to the extent of such net wages available.
In such event, the employer shall furnish the employee with a written
statement indicating such excess. The annual statements to be fur-
nished by the employer pursuant to subsection (i) of this section
shall disclose all tips reported by the employee pursuant to this sub-
section in addition to all other information required by said subsection.

Sec. 2. And be it further enacted, That this Act shall take effect
July 1, 1966.

Approved May 6, 1966.