MARVIN MANDEL, Governor

3499

percentage depletion allowance as claimed and allowed
under Section 613 of the Internal Revenue Code; AND (5)
FOR ALL TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 1974,
50 PERCENT OF THE SUM OF THE ITEMS OF TAX PREFERENCE AS
DETERMINED UNDER THE PROVISIONS OF SECTION 280B OF THIS
SUBTITLE.]]

SECTION 2. AND BE IT FURTHER ENACTED, That new
Section 280B be and it is hereby added to Article 81 —
Revenue and Taxes, of the Annotated Code of Maryland
(1969 Replacement Volume and 1974 Supplement) to read as
follows:

Article 81 — Revenue and Taxes

280B.

(A)    FOR PURPOSES OF THIS SUBTITLE, ITEMS OF TAX
PREFERENCE ARE THOSE ITEMS OF TAX PREFERENCE AS
DETERMINED AND DEFINED IN SECTIONS 57 AND 58 OF THE
INTERNAL REVENUE CODE, AS AMENDED FROM TIME TO TIME, THE
SUM TOTAL OF WHICH IS IN EXCESS OF:

(1)    $30,000 AS SPECIFIED AND APPORTIONED
UNDER THE PROVISIONS OF SECTIONS 57 AND 58, RESPECTIVELY,
OF THE INTERNAL REVENUE CODE, AS AMENDED FROM TIME TO
TIME[[; AND

(2)    THE TAXPAYER'S MARYLAND STATE INCOME
TAXES IMPOSED BY THIS SUBTITLE FOR THE TAXABLE YEAR
(COMPUTED WITHOUT REGARD TO SECTIONS 280(B)(6) AND
280A (B)(5)), REDUCED BY THE CREDITS ALLOWED UNDER

(I)    SECTION 288(G) RELATIVE TO
PERSONAL PROPERTY TAX CREDITS,

(II)   SECTION 290 RELATING TO RESIDENT
TAX CREDIT, AND

(III)  SECTION 291 RELATING TO
NONRESIDENT TAX CREDIT.]]

(B)    A "TAX OPTION" CORPORATION WHICH HAS ELECTED
TO FILE ITS FEDERAL INCOME TAX RETURN UNDER THE
PROVISIONS OF SECTION 1371 OF SUBCHAPTER "S" OF THE
INTERNAL REVENUE CODE AND FOR PURPOSES OF SUBSECTION (A)
OF THIS SECTION, SHALL ACCOUNT FOR ITS TAX PREFERENCE
ITEMS AS BELONGING TO THE CORPORATION. THESE ITEMS OF
TAX PREFERENCE MAY NOT BE TREATED AS BELONGING TO THE
INDIVIDUAL SHAREHOLDERS OF THE CORPORATION.

(C)    THE DETERMINATION OF THE TAX PREFERENCE ITEMS
OF A NONRESIDENT INDIVIDUAL UNDER SUBSECTION (A) OF THIS