WILLIAM DONALD SCHAEFER, Governor                         Ch. 365

CHAPTER 365
(House Bill 1206)

AN ACT concerning

Maryland Income Tax - Limitation on Tax Rate for Lump-Sum Distributions

FOR the purpose of limiting the State income tax imposed if an individual's Maryland
taxable income includes an addition modification for certain lump-sum
distributions; providing for computation of the county income tax; providing for the
application of this Act; allowing certain individuals to file amended tax returns and
claim refunds for a certain taxable year; providing for the termination of this Act;
and generally relating to the Maryland income taxation of certain lump-sum
distributions.

BY repealing and reenacting, without amendments,
Article - Tax - General
Section 10-601

Annotated Code of Maryland
(1988 Volume and 1992 Supplement)

BY adding to

Article - Tax - General

Section 10-601.1

Annotated Code of Maryland

(1988 Volume and 1992 Supplement)

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

Article - Tax - General

10-601.

Except as otherwise provided in this subtitle, a person shall compute the State
income tax by applying the tax rate in § 10-105 of this title to Maryland taxable income.

10-601.1.

(A) IF AN INDIVIDUAL'S MARYLAND TAXABLE INCOME INCLUDES AN
ADDITION FOR A LUMP-SUM DISTRIBUTION UNDER § 10-204(D) OF THIS TITLE, THE
STATE INCOME TAX MAY NOT EXCEED THE SUM OF:

(1) THE TAX COMPUTED BY APPLYING THE TAX RATES IN § 10-105 OF
THIS TITLE TO THE GREATER OF:

(I)      MARYLAND TAXABLE INCOME REDUCED BY THE AMOUNT OF
THE ADDITION UNDER § 10-204(D); OR

(II)     $3,000; AND

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