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2006 LAWS OF MARYLAND
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Ch. 389
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(7) (I) "SMALL BUSINESS EMPLOYER" MEANS, WITH RESPECT TO ANY
TAXABLE YEAR, AN EMPLOYER WHO EMPLOYED AN AVERAGE OF 50 OR FEWER
EMPLOYEES ON BUSINESS DAYS DURING THE TAXABLE YEAR
(II) FOR PURPOSES OF SUBPARAGRAPH (I) OF THIS PARAGRAPH,
ALL PERSONS TREATED AS A SINGLE EMPLOYER UNDER § 411(B), (C), (M), OR (O) OF
THE INTERNAL REVENUE CODE SHALL BE TREATED AS A SINGLE EMPLOYER
(B) A READY RESERVE NATIONAL GUARD SELF EMPLOYED INDIVIDUAL OR
AN INDIVIDUAL OR CORPORATION THAT IS A SMALL BUSINESS EMPLOYER MAY
CLAIM AS A CREDIT AGAINST THE STATE INCOME TAX FOR A TAXABLE YEAR FOR
EACH QUALIFIED REPLACEMENT EMPLOYEE THE LESSER OF:
(1) 50% OF THE QUALIFIED COMPENSATION OF THE EMPLOYEE DURING
THE TAXABLE YEAR THAT IS ATTRIBUTABLE TO SERVICE RENDERED AS A QUALIFIED
REPLACEMENT EMPLOYEE; OR
(2) $6,000.
(C) THE CREDIT UNDER THIS SECTION MAY NOT BE ALLOWED:
(1) FOR ANY TAXABLE YEAR IN WHICH THE TAXPAYER IS UNDER A
FINAL ORDER, JUDGMENT, OR OTHER PROCESS ISSUED OR REQUIRED BY A DISTRICT
COURT OF THE UNITED STATES UNDER 38 U.S.C. § 4323 WITH RESPECT TO A
VIOLATION OF CHAPTER 13 OF TITLE 38 OF THE UNITED STATES CODE; OR
(2) FOR THE 2 SUCCEEDING TAXABLE YEARS AFTER ANY TAXABLE YEAR
DESCRIBED IN ITEM (1) OF THIS SUBSECTION.
(D) IF THE CREDIT ALLOWED UNDER THIS SECTION IN ANY TAXABLE YEAR
EXCEEDS THE STATE INCOME TAX FOR THAT TAXABLE YEAR AN INDIVIDUAL OR
CORPORATION MAY APPLY THE EXCESS AS A CREDIT AGAINST THE STATE INCOME
TAX FOR SUCCEEDING TAXABLE YEARS UNTIL THE EARLIER OF:
(1) THE EXHAUSTION OF THE FULL AMOUNT OF THE EXCESS; OR
(2) THE EXPIRATION OF THE 5TH TAXABLE YEAR AFTER THE TAXABLE
YEAR IN WHICH THE CREDIT IS EARNED.
SECTION 3. AND BE IT FURTHER ENACTED, That the tax credit under §
10-726 of the Tax General Article as enacted by Section 1 of this Act shall be
applicable to all taxable years beginning after December 31, 2005.
SECTION 3. 2. AND BE IT FURTHER ENACTED, That this Act shall take
effect July 1, 2006.
Approved May 2, 2006.
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- 2110 -
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