2013 Maryland Code
TAX - GENERAL
§ 10-703 - For tax paid by resident to another state

§10-703.

(a) Except as provided in subsection (b) of this section, a resident 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.

(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 tax paid to this State;

(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

(4) a nonresident.

(c) (1) Except as provided in paragraph (2) of this subsection, the credit allowed a resident under subsection (a) of this section is the lesser of:

(i) the amount of allowable tax on income that the resident paid to another state; or

(ii) 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) 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) may not exceed that shareholder’s pro rata share of the tax; and

(ii) will be allowed for another state’s income taxes or taxes based on income.

§ 10-703 - 1. Gains from sale or exchange of residence in another state

Abrogated.

§ 10-703 - 2. Gains from installment sale of property in another state

(a) "Installment sale" defined. -- In this section, "installment sale" has the meaning stated in § 453 (b) of the Internal Revenue Code.

(b) Eligibility. -- A credit against the State income tax in the amount determined under subsection (c) of this section may be claimed by a resident who recognizes income for the current taxable year for federal income tax purposes from an installment sale of property located in a state other than Maryland if:

(1) the disposition of the property occurred in an earlier taxable year; and

(2) the taxpayer paid state tax on income for the earlier taxable year to the state where the property was located on the income that for federal income tax purposes is recognized in the current taxable year.

(c) Amount of credit. -- The amount of the credit allowed under this section is equal to the income recognized for federal income tax purposes for the current year on which state income tax was paid to another state in an earlier year, as described in subsection (b) (2) of this section, multiplied by the lesser of:

(1) the rate of tax imposed by the other state on the income described in subsection (b) (2) of this section; or

(2) the maximum rate of Maryland State income tax.