H.B. 1322

VETOES

(1) a resident OTHER THAN A FIDUCIARY may claim a credit only against
the State income tax for a taxable year in the amount determined under subsection (c) of
this section for State tax on income paid to another state for the year; AND

(2) A RESIDENT FIDUCIARY MAY CLAIM A CREDIT AGAINST THE STATE
INCOME TAX FOR A TAXABLE YEAR IN THE AMOUNT DETERMINED UNDER
SUBSECTION (D) OF THIS SECTION FOR STATE TAX ON INCOME PAID TO ANOTHER
STATE FOR THE YEAR.

(b) A credit under subsection (a) of this section is not allowed to:

(1)     a resident OTHER THAN A FIDUCIARY, if the laws of the other state:
allow the resident a credit for State income tax paid to this State;

(2)      A RESIDENT FIDUCIARY, IF THE FIDUCIARY CLAIMS, AND THE
OTHER STATE ALLOWS, A CREDIT FOR STATE INCOME f AX PAID TO THIS STATE;

[(2)](3) a resident for less than the full taxable year for tax on income that
is paid to another state during residency in that state; or

[(3)] (4) a nonresident.

(c) [(1)]Except as provided in [paragraph (2)] SUBSECTION (E) of this
[subsection] SECTION, the credit allowed a resident OTHER THAN A FIDUCIARY under
subsection (a) of this section is the lesser of:

[(i)](1) the amount of allowable tax on income that the, resident paid to

another state or

[(ii)](2) an amount that does not reduce the State income tax to an amount
less than would be payable if the income subjected to tax in the other state were
disregarded.

(D) EXCEPT AS PROVIDED IN SUBSECTION (E) OF THIS SECTION, THE CREDIT
ALLOWED A RESIDENT FIDUCIARY UNDER SUBSECTION (A) OF THIS SECTION IS THE
LESSER OF:

(1) THE AMOUNT OF ALLOWABLE TAX ON INCOME THAT THE
FIDUCIARY PAID TO ANOTHER STATE; OR                         

(2)     AN AMOUNT THAT DOES NOT REDUCE THE STATE INCOME TAX TO
AN AMOUNT LESS THAN WOULD BE PAYABLE IF THE INCOME SUBJECTED TO TAX IN
THE OTHER STATE WERE DISREGARDED.

[(2)](E) If the credit allowed a resident under subsection (a) of this section
is based on tax that an S corporation pays to another state, the credit allowable to a
shareholder:

[(i)] (1) may not exceed that shareholder's pro rata share of the tax;

and

[(ii)](2) will be allowed for another state's income taxes or taxes
based on income.

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