WILLIAM DONALD SCHAEFER, Governor                       Ch. 2

(F) TAX PREFERENCE ITEMS.

THE ADDITION UNDER SUBSECTION (A) OF THIS SECTION INCLUDES
50% OF THE SUM OF TAX PREFERENCE ITEMS UNDER § 10-222 OF THIS
SUBTITLE.

REVISOR'S NOTE: Subsections (a) through (c), (d)(2), (e),
and (f) of this section are new language derived
without substantive change from former Art. 81, §
280(b)(1), (2), and (4) through (6).

Subsection (d)(1) of this section is new language
added to preserve that addback. The Tax - General
Article Review Committee notes, for the consideration
of the General Assembly, that the referenced
provisions of the 1954 Internal Revenue Code have been
either substantially modified or repealed by the Tax
Reform Act of 1986. As the Committee is unsure of
whether the General Assembly wishes to continue this
addback, it has been preserved, for further
consideration.

The introductory language of subsection (a) of this
section, "[t]o the extent excluded from federal
adjusted gross income", is added to clarify that only
those amounts excluded from computations for federal
income tax purposes are to be added under this
section.

In subsection (a) of this section, the phrase "to
determine Maryland adjusted gross income" is added to
state expressly that which only was implied in the
former law -- i.e., the purpose for the modification.

In subsection (b) of this section, the words "another
state" are substituted for former words "any state ...
(other than this State and its political subdivisions
and authorities)", for brevity.

In subsection (c)(1) of this section, the former word
"[s]alaries" is deleted as included in the defined
term "wages".

In subsections (d)(2) and (e) of this section, the
word "claimed" is substituted for the former words
"allowable" and "claimed and allowed", to avoid the
erroneous inference that both criteria must be met or
that the Internal Revenue Service must, in fact, allow
the amount on a federal return before the required
adjustments may be made in computing Maryland taxable
income for the taxable year. In practice, a
modification must be made for State income tax
purposes if the deduction is claimed on the federal
income tax return for the taxable year.

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