S.B. 412

VETOES.

Annotated Code of Maryland

(1988 Volume and 1995 Supplement)

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

Article - Tax - General

10-702.

(a)     (2) (i) "Business entity" means:

1.       a person conducting or operating a trade or business; OR

2.       AN ORGANIZATION THAT IS EXEMPT FROM TAXATION
UNDER § 501(C)(3) OR (4) OF THE INTERNAL REVENUE CODE[;].

(b)     (1) Any business entity that is located in an enterprise zone and satisfies the
requirements of Article 83A, § 5-404 of the Code may claim a credit only against the
State income tax for the wages specified in subsections (c) and (d) of this section that are
paid in the taxable year for which the entity claims the credit.

(2) AN ORGANIZATION THAT IS EXEMPT FROM TAXATION UNDER §
501(C)(3) OR (4) OF THE INTERNAL REVENUE CODE MAY APPLY THE CREDIT UNDER
THIS SECTION AS A CREDIT AGAINST INCOME TAX THAT THE ORGANIZATION HAS
WITHHELD FROM THE WAGES OF EMPLOYEES AN IS REQUIRED TO PAY TO THE
COMPTROLLER UNDER § 10-906(A) OF THIS TITLE.

(2) AN ORGANIZATION THAT IS EXEMPT FROM TAXATION UNDER §
501(C)(3) OR (4) OF THE INTERNAL REVENUE CODE MAY APPLY THE CREDIT UNDER
THIS SECTION AS A CREDIT AGAINST INCOME TAX DUE ON UNRELATED BUSINESS
TAXABLE INCOME AS PROVIDED UNDER §§ 10-304 AND 10-812 OF THIS TITLE.

(e) (1) If the credit allowed under this section in any taxable year exceeds the
State income tax for that taxable year, a business entity may apply the excess as a credit
against the State income tax for succeeding taxable years until the earlier of:

[(1)] (I) the full amount of the excess is used; or

[(2)] (II) the expiration of the 5th taxable year from the date on which the
business entity hired the qualified employee to whom the credit first applies.

(2) FOR AN ORGANIZATION THAT IS EXEMPT FROM TAXATION UNDER §
501(C)(3) OR (4) OF THE INTERNAL REVENUE CODE, IF THE CREDIT ALLOWED UNDER
THIS SECTION IN ANY TAXABLE YEAR EXCEEDS THE SUM OF THE STATE INCOME
TAX OTHERWISE PAYABLE BY THE ORGANIZATION FOR THAT TAXABLE YEAR AND
THE INCOME TAX THAT THE ORGANIZATION HAS WITHHELD FROM THE WAGES OF
EMPLOYEES FOR THAT TAXABLE YEAR AND IS REQUIRED TO PAY TO THE
COMPTROLLER UNDER § 10-906(A) OF THIS TITLE, THE ORGANIZATION MAY APPLY
THE EXCESS AS A CREDIT FOR SUCCEEDING TAXABLE YEARS UNTIL THE EARLIER
OF:

(I) THE FULL AMOUNT OF THE EXCESS IS USED; OR
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