Ch. 22                                     2004 LAWS OF MARYLAND

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 withholding purposes, IF 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, IF:

(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)     for tips, to the extent that the amount required to be withheld on the
tips causes the total withholdings for the period to exceed the available net wages
other than tips after deductions are made for:

(i) the federal income and social security taxes and income tax
required to be withheld on wages other than tips; and

(ii) the federal income and social security taxes required to be
withheld on the tips; OR

(4)      IF THE WAGES ARE PAID TO AN INDIVIDUAL RENDERING POLICE,
FIRE, RESCUE, OR EMERGENCY SERVICES IN AN AREA COVERED UNDER A STATE OF
EMERGENCY DECLARED BY THE GOVERNOR UNDER ARTICLE 16A, § 6A OF THE CODE
BY:

(I)      A NONPROFIT ORGANIZATION NOT REGISTERED TO DO
BUSINESS IN THE STATE AND NOT OTHERWISE DOING BUSINESS IN THE STATE; OR

(II)     A STATE, COUNTY, OR POLITICAL SUBDIVISION OF A STATE,
OTHER THAN THE STATE OF MARYLAND.

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take
effect July 1, 2004 and shall be applicable to all taxable years beginning after
December 31, 2003.

Approved April 13, 2004.

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