2570

LAWS OF MARYLAND

Ch. 673

shall be allocated to this State[,] only to the extent that
such interest is derived from the trade or business of the
subsidiary corporation within this State.

(2) For purposes of this section, a "holding
company" is a corporation subject to tax under this section,
whose activity is confined to the maintenance and management
of its intangible investments and the collection and
distribution of the income from such investments.

(I) (1) (I) IN THIS SUBSECTION THE FOLLOWING WORDS
HAVE THE MEANINGS INDICATED.

(II)  "APPLICABLE EXPENSES" MEANS ANY
EXPENSE OR OTHER DEDUCTION DIRECTLY OR INDIRECTLY
ATTRIBUTABLE TO ELIGIBLE GROSS EARNINGS.

(III)  "ELIGIBLE GROSS EARNINGS" MEANS THAT
AMOUNT DETERMINED BY THE GROSS EARNINGS DERIVED EITHER
DIRECTLY FROM OR INDIRECTLY BY MEANS OF ANY FOREIGN EXCHANGE
TRADING OR HEDGING TRANSACTION RELATED TO MAKING, ARRANGING
FOR, PLACING, OR SERVICING ANY LOAN TO ANY FOREIGN PERSON.
THE GROSS EARNINGS FROM THESE TRANSACTIONS ARE NOT INCLUDED,
UNLESS EITHER SUBSTANTIALLY ALL THE PROCEEDS OF THE LOAN ARE
FOR USE EITHER OUTSIDE OF THE UNITED STATES OR ALL THE
PROCEEDS ARE FOR USE WITHIN AN APPROVED FOREIGN TRADE ZONE
IN THE CASE OF EITHER:

1.  A FOREIGN PERSON THAT IS AN
INDIVIDUAL;

2.  EITHER A FOREIGN    BRANCH OF A
DOMESTIC CORPORATION (OTHER THAN A BANK),     IN WHICH THE
DOMESTIC CORPORATION HAS AT LEAST 80 PERCENT    OWNERSHIP OR
CONTROL; OR

3.  AN INDIVIDUAL RESIDING IN THE
STATE OF MARYLAND OR THE UNITED STATES.

(IV)  "ELIGIBLE NET EARNINGS" MEANS THAT
AMOUNT DETERMINED BY SUBTRACTING FROM THE ELIGIBLE GROSS
EARNINGS THE APPLICABLE EXPENSES.

(V)  "INELIGIBLE FUNDING AMOUNT" MEANS THAT
AMOUNT DETERMINED BY MULTIPLYING THE ELIGIBLE NET EARNINGS
BY A FRACTION:

1.  THE NUMERATOR OF WHICH IS THE
AVERAGE AGGREGATE AMOUNT FOR THE TAXABLE YEAR OF ALL
LIABILITIES, INCLUDING DEPOSITS AND OTHER SOURCES OF FUNDS
OF THE INTERNATIONAL BANKING FACILITY, WHICH WERE NOT OWED
TO OR RECEIVED FROM ANY FOREIGN PERSON; AND

2.  THE DENOMINATOR OF WHICH IS THE
AVERAGE AGGREGATE AMOUNT FOR THE TAXABLE YEAR OF ALL
LIABILITIES, INCLUDING DEPOSITS AND OTHER SOURCES OF FUNDS
OF THE INTERNATIONAL BANKING FACILITY.