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BLAIR LEE III, Acting Governor
1*69
CHAPTER 359
(House Bill 893)
AN ACT concerning
Corporate Taxation
FOR the purpose of taxing dividends received by a Maryland
corporation from the earnings of an affiliated
subsidiary domestic international sales corporation to
the same extent as dividends received by Maryland
corporation from any other affiliated corporation.
BY repealing and reenacting, with amendments,
Article 81 — Revenue and Taxes
Section 280A(c)
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be repealed, amended, or enacted to read as follows: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
280A.
(c) There shall be subtracted from taxable income of
the taxpayer the following items to the extent included in
federal income: (1) operating revenue subject to gross
receipts taxes imposed by this article (less related
expenses) of railroads, other public utilities and contract
carriers; (2) the amount of any refunds of income taxes paid
to the State of Maryland, any other state, the District of
Columbia, and any political subdivision of the State of
Maryland and any other state; (3) interest income on
obligations of the United States and its instrumentalities;
[and] (4) any amounts included therein by operation of the
provisions of §78 of the Internal Revenue Code of 1954; AND
(5) TO THE EXTENT THAT THE DIVIDENDS ARE INCLUDED IN TAXABLE
INCOME, THE PERCENTAGE OF DIVIDENDS RECEIVED FROM AN
AFFILIATED DOMESTIC INTERNATIONAL SALES CORPORATION (AS
DEFINED BY INTERNAL REVENUE CODE OF 1954 SECTION 992 (A)),
WHICH IS EQUIVALENT TO THE PERCENTAGE THAT WOULD BE EXCLUDED
IF THE DOMESTIC INTERNATIONAL SALES CORPORATION WAS NOT
QUALIFIED UNDER SECTION 992 (A). HOWEVER, THIS EXCLUSION
SHALL BE AVAILABLE ONLY IF AT LEAST 50 PERCENT OF THE NET
TAXABLE INCOME OF THE DOMESTIC INTERNATIONAL SALES
CORPORATION IS SUBJECT TO MARYLAND TAXATION.
SECTION 2. AND BE IT FURTHER ENACTED, That this Act
shall take effect July 1, 1978.
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