1969]                  OF THE HOUSE OF DELEGATES                       21

The purpose of this Bill was to remove the double taxation of income
received by the estate of a decedent during administration. However, both
the sponsor of the Bill, Delegate John A. Whitney, and the Comptroller of
the Treasury, have requested that I veto the Bill because of certain tech-
nical uncertainties and administrative difficulties in regard to it.

For the reasons given in the copies of the attached letters from the
sponsor and the Comptroller, which are to be considered part of this mes-
sage, I am complying with their requests to veto House Bill 506.

Sincerely,

/s/ Marvin Mandel,

Governor.
Read and journalized.

COMPTROLLER OF THE TREASURY

Annapolis, Md., April 16, 1969.

Hon. Marvin Mandel
Governor of Maryland
State House
Annapolis, Maryland

Re: H.B. 506
Dear Governor Mandel:

We wish to call your attention to the provisions of H.B. 506, which
amends Article 81, Section 151 of the Annotated Code of Maryland and
provides that income received by an Executor or Administrator, on which
Maryland income tax has been paid by him or is payable by the distributee,
shall be exempt from the Inheritance Tax.

From a careful reading of the Bill it appears that the intent of this
legislation is to avoid double taxation by providing that where income
earned during administration is subject to the Income Tax, it shall be
exempt from any Inheritance Taxes.

We take no exception to the intent, but it is our feeling that the Bill
as it is now worded would result in a chaotic situation insofar as Executors,
Administrators, the Registers of Wills, the distributees, and the Comp-
troller's Office are concerned.

When the Income Tax Law was amended two years ago to provide for
the use of the Federal adjusted gross income base, the provisions exempt-
ing income received by an Executor or Administrator were eliminated
from the Maryland Law. Under certain conditions such income is subject
to the Federal income tax, and consequently is subject also to Maryland
income tax. This poses no particular problem insofar as the Executor's
dealings with the Federal Government are concerned, since he is respon-
sible not merely for paying the Federal income tax but also for filing the
Federal Estate Tax Return. Estate Taxes are, of course, levied on the
value passing under probate; whereas, the Maryland Inheritance Tax is
levied on the amount received by the distributee.

This Bill would place the onus on an Executor or Administrator to
determine whether or not the amount of income being distributed would
be taxable to each distributee. This information would be most difficult