S.B. 129

VETOES

(D) (1) THE COUNTY INCOME TAX ON A NONRESIDENT IS MEASURED BY
THE STATE INCOME TAX ATTRIBUTABLE TO THE EARNED INCOME OF THE
NONRESIDENT THAT IS DERIVED FROM EMPLOYMENT IN THAT COUNTY.

(2) THE COUNTY INCOME TAX DOES NOT APPLY TO A NONRESIDENT
WHO RESIDES IN A STATE THAT HAS ENTERED INTO A RECIPROCAL AGREEMENT
WITH THE COMPTROLLER UNDER § 10-907(A) OF THIS TITLE.                           

10-806.

(c) For county income tax purposes, a nonresident who derives EARNED income,
AS DEFINED IN § 32(C)(2) OF THE INTERNAL REVENUE CODE, from [salary, wages, or
other compensation for personal services for] employment, in. a county shall file an
income tax return, unless [the Comptroller determines that each locality in which the
nonresident resides:

(1) imposes no tax on the income of a Maryland resident derived from wages
for employment in that locality;

(2) exempts that income from its tax on income; or

(3) allows a credit for that income and exempts that income from the
withholding requirements for its tax on income] THE NONRESIDENT RESIDES IN A
STATE THAT HAS ENTERED INTO A RECIPROCAL AGREEMENT WITH THE
COMPTROLLER UNDER § 10-907(A) OF THIS TITLE.

10-907.

(a) Income tax is not required to be withheld at the time wages are paid to a
nonresident if;

(1) for State income tax AND COUNTY INCOME TAX withholding purposes
the Comptroller and the state in which the nonresident resides have agreed in writing to
allow a reciprocal exemption from tax and withholding for the. wages of residents of each
state that are earned in the other state;

[(2) for county income tax withholding purposes:

(i) the nonresident derives wages from employment in a county; and

(ii) the Comptroller determines that each locality in which the
nonresident resides:

1. imposes no tax on the income of a Maryland resident from
wages from employment in that locality;

2. exempts that income from its tax on income; or

3. allows a credit for that income and exempts that income from
the withholding requirement for its tax on income;] and

[(3)] (2) for tips, to the extent that the amount required to be withhold on
the tips causes the total withholdings for the period to exceed the available not wages
other than tips after deductions are made for:

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