WILLIAM DONALD SCHAEFER, Governor                            Ch. 578

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect
July 1, 1994.

Approved May 26, 1994.

CHAPTER 578
(House Bill 641)

AN ACT concerning

Income Tax - Estimated Tax Payments - Interest and Penalty

FOR the purpose of prohibiting the assessment of interest and penalty for the
underestimation of State income tax in certain circumstances; providing for the
application of this Act; and generally relating to income tax.

BY repealing and reenacting, with amendments,
Article - Tax - General
Section 13-602 and 13-702
Annotated Code of Maryland
(1988 Volume and 1993 Supplement)

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

Article - Tax - General

13-602.

(A)      [A] EXCEPT AS PROVIDED IN SUBSECTION (B) OF THIS SECTION, A tax
collector shall assess interest on unpaid tax from the due date to the date on which the tax
is paid if a person who is required to estimate and pay financial institution franchise tax,
public service company franchise tax, or income tax under § 8-210(b), § 8-405(b), or §
10-902 of this article:

(1)      fails to pay an installment when due; or

(2)      estimates a tax that is:

(i) less than 90% of the tax required to be shown on the return for the
current taxable year; and

(ii) less than the tax paid for the prior taxable year, REDUCED BY THE
CREDIT ALLOWED UNDER § 10-703 OF THIS ARTICLE.

(B)      INTEREST MAY NOT BE ASSESSED ON THE UNDERESTIMATION OF
INDIVIDUAL INCOME TAX IF:

(1) AT LEAST 90% OF THE INDIVIDUAL'S TAXABLE INCOME IS ALSO
TAXABLE BY ANOTHER STATE; AND

- 2701 -