Ch. 2                                    LAWS OF MARYLAND

wish to consider extending this section to the taxes
excluded under subsection (d) of this section and
extending subsection (c) of this section.

At the direction of the Joint Subcommittee on Code
Revision, House Bill 1295 was introduced, during the
1987 Session, to authorize the payment of interest on
refunds that are not due to an error of the taxpayer
or are due to an error of the State or a political
subdivision or unit. House Bill 1295 passed the House
and passed the Senate with amendments. The Session
ended before the House concurred on the amendments.
The bill will be reintroduced for consideration by the
General Assembly in the 1988 Session.

Defined terms: "Alcoholic beverage tax" § 1-101

"Financial institution franchise tax" § 1-101

"Income tax" § 1-101 "Inheritance tax" § 1-101

"Maryland estate tax" § 1-101

"Motor carrier tax" § 1-101

"Sales and use tax" § 1-101

"Tax collector" § 13-101 "Tobacco tax" § 1-101

13-604. INTEREST RATES.

(A)  IN GENERAL.

(1)  THE RATE OF INTEREST FOR EACH MONTH OR FRACTION
OF A MONTH IS THE PERCENT EQUAL TO ONE-TWELFTH OF THE ANNUAL
INTEREST RATE THAT THE COMPTROLLER SETS FOR THE CALENDAR YEAR
UNDER PARAGRAPH (2) OF THIS SUBSECTION.

(2)  ON OR BEFORE OCTOBER 1 OF EACH YEAR, THE
COMPTROLLER SHALL SET THE ANNUAL INTEREST RATE FOR THE NEXT
CALENDAR YEAR AS THE PERCENT, ROUNDED TO THE NEAREST WHOLE
NUMBER, THAT IS AT THE PERCENT THAT EQUALS:

(I)  FOR MONEYS OWED TO THE STATE, THE GREATER
OF:

1.  12%; OR

2.  2 PERCENTAGE POINTS ABOVE THE AVERAGE
PRIME RATE OF INTEREST QUOTED BY COMMERCIAL BANKS TO LARGE
BUSINESSES DURING THE STATE'S PREVIOUS FISCAL YEAR, BASED ON
DETERMINATION BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE
BANK; AND

(II)  FOR REFUNDS, 2 PERCENTAGE POINTS ABOVE THE
AVERAGE INVESTMENT YIELD ON STATE MONEY FOR THE STATE'S PREVIOUS
FISCAL YEAR, AS PUBLISHED IN THE TREASURER'S ANNUAL REPORT.

(B)  MOTOR FUEL TAX REFUNDS.

THE RATE OF INTEREST ON A MOTOR FUEL TAX REFUND IS 6% A
YEAR.

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