§ 10-402. Corporate allocations of income
West's Annotated Code of MarylandTax-GeneralEffective: July 1, 2020
Effective: July 1, 2020
MD Code, Tax - General, § 10-402
§ 10-402. Corporate allocations of income
(a) In this section, “worldwide headquartered company” means a corporation included in a group of corporations including a parent corporation that:
(b) In computing Maryland taxable income, a corporation shall allocate Maryland modified income derived from or reasonably attributable to its trade or business in this State in the following manner:
(2) if a corporation carries on its trade or business within and outside the State, the corporation shall allocate to the State the part of the corporation's Maryland modified income that is derived from or reasonably attributable to the part of its trade or business carried on in the State, in the manner required in subsection (c), (d), or (e) of this section.
(c)(1) Except as provided in subsection (d) or (e) of this section, the part of the corporation's Maryland modified income derived from or reasonably attributable to trade or business carried on in the State may be determined by separate accounting if practicable.
(2) If in any taxable year a corporation is permitted or required to use the separate accounting method in determining all or a portion of its Maryland taxable income, the portion that is separately accounted for to Maryland shall be taxable whether or not the Maryland modified income of the corporation for the taxable year is zero or less.
(d)(1)(i) In this paragraph:
1. “manufacturing corporation” means a domestic or foreign corporation which is primarily engaged in activities that, in accordance with the North American Industrial Classification System (NAICS), United States Manual, United States Office of Management and Budget, 1997 Edition, would be included in Sector 11, 31, 32, or 33; and
(ii) If a manufacturing corporation carries on its trade or business within and outside the State and the trade or business is a unitary business, the part of the corporation's Maryland modified income derived from or reasonably attributable to trade or business carried on in the State shall be determined using a single sales factor apportionment formula, by multiplying its Maryland modified income by 100% of the sales factor.
(i) for a taxable year beginning after December 31, 2017, but before January 1, 2019, if the trade or business is a unitary business, the part of the corporation's Maryland modified income derived from or reasonably attributable to trade or business carried on in the State shall be determined using a 3-factor apportionment fraction:
(ii) for a taxable year beginning after December 31, 2018, but before January 1, 2020, if the trade or business is a unitary business, the part of the corporation's Maryland modified income derived from or reasonably attributable to trade or business carried on in the State shall be determined using a 3-factor apportionment fraction:
(iii) for a taxable year beginning after December 31, 2019, but before January 1, 2021, if the trade or business is a unitary business, the part of the corporation's Maryland modified income derived from or reasonably attributable to trade or business carried on in the State shall be determined using a 3-factor apportionment fraction:
(iv) for a taxable year beginning after December 31, 2020, but before January 1, 2022, if the trade or business is a unitary business, the part of the corporation's Maryland modified income derived from or reasonably attributable to trade or business carried on in the State shall be determined using a 3-factor apportionment fraction:
(v) for a taxable year beginning after December 31, 2021, if the trade or business is a unitary business, the part of the corporation's Maryland modified income derived from or reasonably attributable to trade or business carried on in the State shall be determined using a single sales factor apportionment formula, by multiplying its Maryland modified income by 100% of the sales factor.
(ii) To determine under subparagraph (i) of this paragraph the Maryland modified income of a corporation or group of corporations that is a worldwide headquartered company that filed a federal corporate income tax return for the taxable year, gross income from intangible investments, including dividends, interest, royalties, and capital gains from the sale of intangible property, shall be included in the calculation of the numerator based on the average of the property and payroll factors.
(e) To reflect clearly the income allocable to Maryland, the Comptroller may alter, if circumstances warrant, the methods under subsections (c) and (d) of this section, including:
Credits
Added by Acts 1988, c. 2, § 1, eff. Jan. 1, 1989. Amended by Acts 1989, c. 5, § 1; Acts 1989, c. 171; Acts 1992, c. 249; Acts 1992, 1st Sp. Sess., c. 1, § 6; Acts 2001, c. 633, § 1, eff. July 1, 2001; Acts 2007, 1st Sp. Sess., c. 3, § 6, eff. Jan. 1, 2008; Acts 2008, c. 177, § 1, eff. July 1, 2008; Acts 2008, c. 178, § 1, eff. July 1, 2008; Acts 2015, c. 22, §§ 1, 5, eff. April 14, 2015; Acts 2016, c. 8, § 5; Acts 2018, c. 341, § 1, eff. July 1, 2018; Acts 2018, c. 342, § 1, eff. July 1, 2018; Acts 2020, c. 641, § 1, eff. July 1, 2020.
Formerly Art. 81, § 316.
MD Code, Tax - General, § 10-402, MD TAX GENERAL § 10-402
Current through legislation effective through April 9, 2023, from the 2024 Regular Session of the General Assembly. Some statute sections may be more current, see credits for details.
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