WILLIAM DONALD SCHAEFER, Governor

Ch. 2

The second sentence of former Art. 56, § 137(f), which
required the Comptroller to waive a motor fuel tax
penalty if the taxpayer established, by a fair
preponderance of evidence, that the failure "was due
to reasonable cause and was not intentional or
willful", is deleted to reflect the intent of the
General Assembly, by enactment of Chapter 125, Acts of
1987, to create a uniformly applicable provision for
the waiver of the penalty in this section.
Willfulness and intent are no longer determinative
factors as a result of the deletion but may be
considered as an element of "reasonable cause".

Former Art. 81, § 128B(e)(3) and the fifth clause of
the third sentence of § 133, which provided for a 5%
penalty, are deleted as obsolete in light of the later
enacted provisions of former Art. 81, § 473(a) -- now
subsection (a) of this section. The first sentence of
§ 344(a) and the second sentence of § 345(a), as they
related to penalties, and § 407(a)(1), as it related
to a penalty of 10% for failure to pay tax, § 473(b),
which listed exceptions to the general penalty, and §
399, as it extended §§ 344 and 345 to the former use
tax, are deleted as surplusage.

Former Art. 81, § 407(d), which related to the
distribution of interest and penalties, is deleted as
unnecessary in light of Title 2 of this article.

The Tax - General Article Review Committee notes, for
the consideration of the General Assembly, that, under
subsections (a) and (b)(1) and (2) of this section,
the assessment of penalty is mandatory, but, in
subsection (b)(3) of this section, assessment is
permissive although the taxpayer "willfully" fails to
pay tobacco tax. It would seem that the assessment
would be mandatory on a finding of willfulness. In
any event, the assessment may be waived.

Defined terms: "Financial institution

franchise tax" § 1-101
"Governmental unit" § 13-101 "Income tax" § 1-101
"Inheritance tax" § 1-101

"Motor carrier tax" § 1-101 "Motor fuel tax" § 1-101
"Person" § 1-101 "Tax collector" § 13-101
"Tobacco tax" § 1-101

13-702. UNDERESTIMATION OF FINANCIAL INSTITUTION FRANCHISE OR
INCOME TAX.

(A) FINANCIAL INSTITUTION FRANCHISE TAX.

A TAX COLLECTOR SHALL ASSESS A PENALTY NOT EXCEEDING 25% OF
THE AMOUNT UNDERESTIMATED, IF A PERSON WHO IS REQUIRED TO
ESTIMATE AND PAY FINANCIAL INSTITUTION FRANCHISE TAX UNDER §
8-216 OF THIS ARTICLE:

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