SPIRO T. AGNEW, Governor                        781

as defined in Section 161B of Article 23 of this Code (1965 Replace-
ment Volume), as amended from time to time; (3) net earnings
is an amount equal to the net income of a taxpayer as if computed
for the particular savings bank or building, saving and loan associa-
tion under the provisions of the subtitle "Income Tax" in Article 81
of this Code (1957 Edition), as amended from time to time; pro-
vided, however, that in computing net income, the taxpayer shall
not be entitled to exclude from his gross income any amounts which
might otherwise be excluded by Section 280 [(1)] A (c) (4) of
Article 81 as amended from time to time.

FRANCHISE TAX ON NET EARNINGS

OF FINANCIAL INSTITUTIONS
128A.

(a)    A franchise tax is hereby annually levied and imposed for
each year beginning after December 31, 1967, and for the period
after December 31, 1967 to the end of any taxable year which is a
fiscal year as defined in Section 279 (h) of this Article, upon every
domestic financial institution for the privilege of existing as a cor-
poration during any part of its taxable year, and upon every financial
institution organized under the laws of the United States or another
state or nation for the grant to it of the privilege of transacting
or for the actual transaction by it of any business within this State
during any part of its taxable year, in corporate or organized form.
"Financial institution" as used in this subtitle shall include all com-
mercial banks, safe deposit and trust companies, and finance cor-
porations as defined in Section 2(a) (9) of this Article; but shall not
include domestic or foreign finance corporations which make loans
exclusively to farmers for agricultural purposes OR ANY CORPORA-
TION LICENSED UNDER THE SMALL BUSINESS INVEST-
MENT ACT OF 1958, AS AMENDED (15 USCA 661 ET SEQ., AS
AMENDED).

(b)    The tax imposed by this subtitle shall be measured by the
net earnings of such financial institution. "Net earnings" for
purposes of this subtitle shall mean the net income of such financial
institution for the taxable year for which the tax is imposed, deter-
mined in accordance with the provisions of Section 280A of this
Article, allocable to this State under the provisions of Section 316;
provided however, that the financial institution shall include in its
income interest upon obligations of the United States, of any state
including Maryland, of any county, municipal or public corporation,
authority, special district, or political subdivision of any state includ-
ing Maryland, and of the respective instrumentalities thereof, and
shall further include in its income, Section 280A(c) (4) of this
Article notwithstanding, all other interest and dividends to the extent
included in its taxable income as defined in the laws of the United
States, as amended from time to time and in effect for the corres-
ponding taxable year.

(c)    The rate of tax shall be seven per cent (7%) of net earnings
allocable to this State under the provisions of Section 316 and of this
subtitle.

(d)    Every financial institution shall file a report of its net earn-
ings with the Director of the State Department of Assessments and
Taxation of its net earnings for the taxable year, on or before the