WILLIAM DONALD SCHAEFER, Governor                       Ch. 2

The introductory clause of subsection (a) of this
section, "[e]xcept as provided in § 10-907 of this
subtitle", is added for clarity.

In the introductory language of subsection (a) of this
section, the defined term "payor" is substituted for
the former, specific references to an "'S'
corporation" and "fiduciary", for brevity.

In subsection (a)(1) of this section, the defined term
"income tax" is substituted for the former references
to "the tax imposed under this section", "a tax as
provided in this section", "a tax for each nonresident
shareholder", and "the tax imposed under § 288 of this
subtitle", for clarity. In light of this addition,
former Art. 81, § 283(c)(1)(ii), which related to the
applicability of withholding and estimated tax
provisions to the county income tax, is deleted.

Similarly, the second and third sentences of former
Art. 81, § 312(m), which provided for the treatment of
deductions in withholdings for nonresidents, is
deleted since computation of income tax for
nonresidents includes deductions.

In subsections (b) and (c) of this section, the
reference to the "person who withholds the tax" is
substituted for the former, limited references to the
"employer", to extend these subsections to payors.

Defined terms: "Comptroller" § 1-101
"Employer" § 10-905 "Income tax" § 1-101
"Payor" § 10-905 "Person" § 1-101
"Property" § 1-101 "Withhold" § 10-905

10-907. EXCEPTIONS.

(A) WAGES.

INCOME TAX IS NOT REQUIRED TO BE WITHHELD AT THE TIME WAGES
ARE PAID TO A NONRESIDENT IF:

(1) FOR STATE INCOME TAX WITHHOLDING PURPOSES:

(I)  THE MARYLAND TAXABLE INCOME OF THE
NONRESIDENT IN A CALENDAR YEAR IS DERIVED ONLY FROM WAGES FOR
EMPLOYMENT IN THIS STATE; AND

(II)  THE STATE IN WHICH THE NONRESIDENT
RESIDES:

1. IMPOSES A TAX ON NET INCOME FOR THOSE
WAGES UNDER A LAW THAT IS SUBSTANTIALLY SIMILAR TO THE INCOME TAX
LAWS OF THIS STATE; AND

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