1390

LAWS OF MARYLAND

Ch. 316

of a "tax option" corporation shall be treated as
belonging to the individual shareholders of the
corporation; requiring each shareholder to report his
pro rata share of the items of the tax preference; and
providing for the applicability of this Act to certain
tax years.

BY repealing and reenacting, with amendments,

Article 81 — Revenue and Taxes

Section 280B(b)

Annotated Code of Maryland

(1975 Replacement Volume and 1977 Supplement)

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That section(s) of the Annotated Code of Maryland
be repealed, amended, or enacted to read as follows:

Article 81 — Revenue and Taxes

280B.

(b) A "tax option" corporation which has elected to
file its federal income tax return under the provisions of §
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.] INDIVIDUAL SHAREHOLDERS OF THE CORPORATION. A
PRO RATA APPORTIONMENT OF THE ITEMS OF TAX PREFERENCE IS
REPORTABLE BY EACH SHAREHOLDER ON HIS INDIVIDUAL RETURN IN A
MANNER CONSISTENT WITH FEDERAL REQUIREMENTS.

SECTION 2. AND BE IT FURTHER ENACTED, That this Act
shall take effect June 1, 1978 and shall be applicable for
all taxable years beginning after December 31, 1977.

Approved May 2, 1978.

CHAPTER 317

(House Bill 152)

AN ACT concerning

Income Tax — Tax Preference Income

FOR the purpose of providing that State and local income
taxes are not included as deductions in arriving at
adjusted itemized deductions under the provisions of
law dealing with the taxation of tax preference income;
and providing for the applicability of this Act to