WILLIAM DONALD SCHAEFER, Governor Ch. 545

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

Article - Tax - General

8-204.

(a)  A financial institution shall compute its net earnings:

(1) based on the accounting period used as its fiscal
year; and

(2) subject to the additions required under
subsection (b) of this section, in the manner that a corporation
computes, for purposes of the income tax, the Maryland modified
income.

(b)   A financial institution shall add to its net earnings
computed under subsection (a) of this section the amounts that,
even if otherwise allowed to be subtracted under § 10-307 (b) and
(g)(3) AND (8) of this article, equal:

(1) profit realized from the sale or exchange of
bonds issued by this State or a political subdivision of this
State;

(2)  dividends received from foreign corporations and
included in federal gross income under § 78 of the Internal
Revenue Code;

(3)  interest derived from a United States obligation;
[and]

(4)   STATE TAX EXEMPT INTEREST RECEIVED FROM A MUTUAL
FUND AND ALLOWED TO BE SUBTRACTED UNDER § 10-307(G)(8) OF THIS
ARTICLE; AND

[(4)] (5) interest excluded from federal gross income
under § 103 of the Internal Revenue Code and derived from a bond:

(i) issued by a state or a public corporation,
special district, political subdivision of a state or their
instrumentalities; or

(ii) under § 150 of the Internal Revenue Code,
treated as a bond issued by a state or a public corporation,
special district, or political subdivision of a state or their
instrumentalities.

10-207.

(a) To the extent included in federal adjusted gross
income, the amounts under this section are subtracted from the

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