Ch. 2                                    LAWS OF MARYLAND

Subsection (a) of this section is revised to
incorporate the substance of former Art. 81, §
128(a)(1), which imposed a franchise tax on every
savings bank and savings and loan association. As to
the transfer of former Art. 81, § 128(a) through (h-1)
to the Session Laws, see the General Revisor's Note to
this subtitle.

In subsection (a) of this section, the reference to a
financial institution "existing or doing business in
the State during that year" is substituted for the
former phrase "for the privilege of existing as a
corporation during any part of the State's fiscal
year" and "for the privilege of engaging in business
in this State during any part of the State's fiscal
year", for clarity and brevity. In light of this
substitution, the words "domestic" and "not organized
under the laws of this State", which formerly modified
the separate references to a "financial institution",
are deleted as surplusage.

In subsection (b) of this section, the specific
reference to a "special taxing district" is added to
clarify the broad scope of the reference to a
"political subdivision". Several provisions preempt
imposition of taxes where the State imposes a tax
under this article, but the former law referred
generally to a "political subdivision" or specifically
to a "county, municipal corporation, or other
political subdivision". In this article, each
preemption provision specifically enumerates "county,
municipal corporation, special taxing district, or
other political subdivision", to avoid the inference
that failure to mention a particular type of
subdivision allows that subdivision to impose a tax.

Also in subsection (b) of this section, the defined
term "savings and loan association" is substituted for
the former term "building, savings and loan
associations", for clarity.

Also in subsection (b) of this section, the former
reference to a January 1, 1966 effective date is
deleted as obsolete.

The Tax - General Article Review Committee notes, for
the consideration of the General Assembly, a possibly
unintended result of imposing the financial
institution franchise tax based on the fiscal year of
the State but measured by earnings during the fiscal
year of the financial institution. An institution
could avoid tax liability for part of the first year
in which the institution operates in this State by
beginning business after the close of the State's
fiscal year and using an accounting period that does

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