Ch. 171

LAWS OF MARYLAND

Article - Tax - General
Section 10-402
Annotated Code of Maryland
(1988 Volume)

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:

Article - Tax - General

10-402.

(a)   In computing Maryland taxable income, a corporation
shall allocate net income derived from or reasonably attributable
to its trade or business in this State in the following manner:

(1)   if a corporation carries on its trade or business
wholly within the State, the corporation shall allocate to the
State all of the net income of the corporation; and

(2)   if a corporation carries on its trade or business
in and out of the State, the corporation shall allocate to the
State the part of the corporation's Maryland modified income that
is derived from or reasonably attributable to the part of its
trade or business carried on in the State, in the manner required
in subsection (b), (c), or (d) of this section.

(b)  (1) Except as provided in subsection (c) or (d) of this
section, the part of the corporation's Maryland modified income
derived from or reasonably attributable to trade or business
carried on in the State may be determined by separate accounting
if practicable.

(2) IF IN ANY TAXABLE YEAR A CORPORATION IS PERMITTED
OR REQUIRED TO USE THE SEPARATE ACCOUNTING METHOD IN DETERMINING
ALL OR A PORTION OF ITS MARYLAND TAXABLE INCOME, THE PORTION THAT
IS SEPARATELY ACCOUNTED FOR TO MARYLAND SHALL BE TAXABLE WHETHER
OR NOT THE MARYLAND MODIFIED INCOME OF THE CORPORATION FOR THE
TAXABLE YEAR IS ZERO OR LESS.

(c)  (1) If the trade or business is a unitary business, the
part of the corporation's Maryland modified income derived from
or reasonably attributable to trade or business carried on in the
State shall be determined using a 3-factor formula that weighs
property, payroll, and sales equally.

(2) The property factor under paragraph (1) of this
subsection shall include:

(i) rented and owned real property; and

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