<section article="gtg" article_name="Tax - General" number="8-101" title_number="8" title_name="Franchise Taxes" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <level label="a"> <text>In this title the following words have the meanings indicated.</text> </level> <level label="b"> <text>“Company” means an association, corporation, or joint-stock company.</text> </level> <level label="c"> <level label="1"> <text>“Financial institution” means:</text> <level label="i"> <text>a credit company;</text> </level> <level label="ii"> <text>except as provided in paragraph (2)(i) of this subsection, a finance company;</text> </level> <level label="iii"> <text>an international banking facility;</text> </level> <level label="iv"> <text>a loan company;</text> </level> <level label="v"> <text>a mortgage company;</text> </level> <level label="vi"> <text>a safe-deposit company; and</text> </level> <level label="vii"> <text>a savings and loan association.</text> </level> </level> <level label="2"> <text>“Financial institution” does not include:</text> <level label="i"> <text>a finance company that makes loans only to farmers for agricultural purposes;</text> </level> <level label="ii"> <text>a company licensed under the federal Small Business Investment Act of 1958;</text> </level> <level label="iii"> <text>a corporation that elects to be taxed as a small business corporation under Subchapter S of the Internal Revenue Code;</text> </level> <level label="iv"> <text>an entity that is a real estate mortgage investment conduit as defined in the Internal Revenue Code;</text> </level> <level label="v"> <text>a limited liability company; or</text> </level> <level label="vi"> <text>a commercial bank, savings bank, trust company, or company that substantially competes with national banks in the State.</text> </level> </level> </level> <level label="d"> <text>“Savings and loan association” means:</text> <level label="1"> <text>a savings and loan association that:</text> <level label="i"> <text>is organized under the laws of this State;</text> </level> <level label="ii"> <text>is organized under the laws of another state and is admitted to do business in this State; or</text> </level> <level label="iii"> <text>is organized under the laws of the United States and has an office in this State; or</text> </level> </level> <level label="2"> <text>a savings bank chartered by the Federal Home Loan Bank Board.</text> </level> </level> <level label="e"> <level label="1"> <text>“Savings bank” means a company or other institution that is organized to receive deposits of money and pay interest on the deposits.</text> </level> <level label="2"> <text>“Savings bank” does not include a bank with capital stock.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="8-102" title_number="8" title_name="Franchise Taxes" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <text>The franchise taxes under this title are imposed for the privilege of doing business in the State.</text> </section> <section article="gtg" article_name="Tax - General" number="8-201" title_number="8" title_name="Franchise Taxes" subtitle_number="2" subtitle_name="Financial Institution Franchise Tax"> <level label="a"> <text>In this subtitle the following words have the meanings indicated.</text> </level> <level label="b"> <text>“Approved foreign trade zone” means an area designated as a foreign trade zone under Title 5, Subtitle 8 of the Economic Development Article.</text> </level> <level label="c"> <text>“Taxable net earnings” means the net earnings of a financial institution computed under § 8-204 of this subtitle and modified under §§ 8-205 and 8-206 of this subtitle.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="8-202" title_number="8" title_name="Franchise Taxes" subtitle_number="2" subtitle_name="Financial Institution Franchise Tax"> <level label="a"> <level label="1"> <text>For all taxable years beginning before January 1, 2001, a franchise tax, measured by taxable net earnings, is imposed annually on each financial institution existing or doing business in the State during any part of the fiscal year of the financial institution.</text> </level> <level label="2"> <text>For all taxable years beginning after December 31, 2000, the financial institution franchise tax is terminated, and Maryland taxable income of financial institutions shall be subject to taxation under Title 10 of this article.</text> </level> </level> <level label="b"> <text>A county, municipal corporation, special taxing district, or other political subdivision of the State may not impose on a savings bank or savings and loan association any tax other than its regular tax on property.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="8-203" title_number="8" title_name="Franchise Taxes" subtitle_number="2" subtitle_name="Financial Institution Franchise Tax"> <text>The financial institution franchise tax rate is 7% of taxable net earnings as determined under §§ 8-204 through 8-206 of this subtitle.</text> </section> <section article="gtg" article_name="Tax - General" number="8-204" title_number="8" title_name="Franchise Taxes" subtitle_number="2" subtitle_name="Financial Institution Franchise Tax"> <level label="a"> <text>A financial institution shall compute its net earnings:</text> <level label="1"> <text>based on the accounting period used as its fiscal year; and</text> </level> <level label="2"> <text>subject to the modifications required under this section, in the manner that a corporation computes, for purposes of the income tax, the Maryland modified income.</text> </level> </level> <level label="b"> <text>A financial institution shall add to its net earnings computed under subsection (a) of this section the amounts that, even if otherwise allowed to be subtracted under § 10–307(b) and (g)(1) and (4) of this article, equal:</text> <level label="1"> <text>profit realized from the sale or exchange of bonds issued by this State or a political subdivision of this State;</text> </level> <level label="2"> <text>dividends received from foreign corporations and included in federal gross income under § 78 of the Internal Revenue Code;</text> </level> <level label="3"> <text>interest derived from a United States obligation;</text> </level> <level label="4"> <text>State tax–exempt interest received from a mutual fund and allowed to be subtracted under § 10–307(g)(4) of this article; and</text> </level> <level label="5"> <text>interest excluded from federal gross income under § 103 of the Internal Revenue Code and derived from a bond:</text> <level label="i"> <text>issued by a state or a public corporation, special district, or political subdivision of a state or their instrumentalities; or</text> </level> <level label="ii"> <text>under § 150 of the Internal Revenue Code, treated as a bond issued by a state or a public corporation, special district, or political subdivision of a state or their instrumentalities.</text> </level> </level> </level> <level label="c"> <text>A financial institution shall subtract from its net earnings computed under subsection (a) of this section interest expense incurred to purchase or carry a bond as defined in subsection (b)(5) of this section.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="8-205" title_number="8" title_name="Franchise Taxes" subtitle_number="2" subtitle_name="Financial Institution Franchise Tax"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <level label="i"> <text>“Foreign person” means:</text> <level label="1"> <text>an individual who is not a resident of the United States;</text> </level> <level label="2"> <text>a company, partnership, or trust that is not organized under the laws of the United States or of a state; and</text> </level> <level label="3"> <text>a foreign branch of a company organized under the laws of the United States or of a state.</text> </level> </level> <level label="ii"> <text>“Foreign person” includes:</text> <level label="1"> <text>a foreign government or any of its units;</text> </level> <level label="2"> <text>an international organization or any of its agencies;</text> </level> <level label="3"> <text>an international banking facility; or</text> </level> <level label="4"> <text>a company or partnership that is not organized under the laws of the United States or of a state and that has an office and activities within an approved foreign trade zone.</text> </level> </level> </level> <level label="3"> <text>“International banking facility” means a financial institution that:</text> <level label="i"> <text>qualifies as an international banking facility under the laws of the United States or under regulations that the Board of Governors of the Federal Reserve System adopts;</text> </level> <level label="ii"> <text>is located in a county where an approved foreign trade zone is located; and</text> </level> <level label="iii"> <level label="1"> <text>makes, arranges for, places, or services a loan to a foreign person for use outside the United States or in an approved foreign trade zone in the United States; or</text> </level> <level label="2"> <text>derives earnings from a foreign exchange trading or hedging transaction that is related to a loan described in item 1 of this item.</text> </level> </level> </level> <level label="4"> <text>“Liability” means the total liabilities shown in the records of an international banking facility.</text> </level> </level> <level label="b"> <text>In computing taxable net earnings, an international banking facility shall:</text> <level label="1"> <text>deduct the qualifying amount computed under subsection (c) of this section to the extent that the amount is not deductible in computing its federal taxable income; or</text> </level> <level label="2"> <text>add any loss computed under subsection (c) of this section to its taxable net earnings.</text> </level> </level> <level label="c"> <level label="1"> <text>To compute the qualifying amount allowed under this section, an international banking facility shall determine its gross earnings derived, directly or indirectly, from any foreign exchange trading or hedging transaction that relates to making, arranging for, placing, or servicing a loan to a foreign person if:</text> <level label="i"> <text>substantially all of the proceeds of that loan are used outside the United States; or</text> </level> <level label="ii"> <text>all of the proceeds are used in an approved foreign trade zone by:</text> <level label="1"> <text>a foreign individual;</text> </level> <level label="2"> <text>an individual residing in the United States; or</text> </level> <level label="3"> <text>a foreign branch of a company that is organized under the laws of the United States or of a state, is not a bank, and has at least 80% ownership or control of the foreign branch.</text> </level> </level> </level> <level label="2"> <text>From the gross earnings computed under paragraph (1) of this subsection, an international banking facility shall subtract all deductions or expenses, directly or indirectly, related to those gross earnings.</text> </level> <level label="3"> <text>From the adjusted gross earnings calculated under paragraph (2) of this subsection, an international banking facility shall subtract the product of multiplying the adjusted gross earnings by a fraction:</text> <level label="i"> <text>the numerator of which is the fiscal year average amount of liability that was neither owed to nor received from a foreign person; and</text> </level> <level label="ii"> <text>the denominator of which is the fiscal year average amount of liability that was owed to or received from any person.</text> </level> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="8-206" title_number="8" title_name="Franchise Taxes" subtitle_number="2" subtitle_name="Financial Institution Franchise Tax"> <level label="a"> <text>In computing taxable net earnings, a financial institution with net earnings derived outside the State shall allocate its net earnings, in the manner that the Department requires, based on the gross volume of the transactions of the financial institution inside and outside the State.</text> </level> <level label="b"> <text>In computing taxable net earnings, a financial institution shall include only that part of interest derived from the trade or business, in this State, of the subsidiaries of the financial institution, if the financial institution is a holding company because its only activities are to:</text> <level label="1"> <text>maintain and manage intangible investments; and</text> </level> <level label="2"> <text>collect and distribute income from intangible investments.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="8-207" title_number="8" title_name="Franchise Taxes" subtitle_number="2" subtitle_name="Financial Institution Franchise Tax"> <text>A financial institution may claim a credit against the financial institution franchise tax equal to the estimated tax paid under § 8-210(b) of this subtitle.</text> </section> <section article="gtg" article_name="Tax - General" number="8-208" title_number="8" title_name="Franchise Taxes" subtitle_number="2" subtitle_name="Financial Institution Franchise Tax"> <text>A savings bank or savings and loan association doing business outside this State may claim a credit against the financial institution franchise tax equal to the amount paid to another jurisdiction as:</text> <level label="1"> <text>a tax based on savings accounts or saving share accounts bought in this State;</text> </level> <level label="2"> <text>a tax on gross receipts from business done in this State; or</text> </level> <level label="3"> <text>a tax on income derived from business done in this State.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="8-209" title_number="8" title_name="Franchise Taxes" subtitle_number="2" subtitle_name="Financial Institution Franchise Tax"> <level label="a"> <text>Each financial institution existing or doing business in the State during any part of the fiscal year of the financial institution shall complete, under oath, and file with the Department a financial institution franchise tax return on or before the 15th day of the 3rd month after the end of that fiscal year.</text> </level> <level label="b"> <level label="1"> <text>Each financial institution that reasonably expects its financial institution franchise tax for a year to exceed $1,000 shall complete, under oath, and file with the Department a declaration of estimated tax, on or before the 15th day of the 4th month of the accounting period used as the fiscal year of the financial institution.</text> </level> <level label="2"> <text>A financial institution required under paragraph (1) of this subsection to file a declaration of estimated tax for a taxable year shall complete and file with the Department a quarterly estimated tax return on or before the 15th day of the 6th, 9th, and 12th months of that year.</text> </level> </level> <level label="c"> <text>To properly identify persons listed in a return or document, a person shall include in a return or document the Social Security or other identifying number that the Department requires.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="8-210" title_number="8" title_name="Franchise Taxes" subtitle_number="2" subtitle_name="Financial Institution Franchise Tax"> <level label="a"> <text>Except as provided in subsection (b) of this section, a financial institution shall pay the financial institution franchise tax with the return that covers the period for which the tax is due.</text> </level> <level label="b"> <text>Each financial institution required to file quarterly estimated financial institution franchise tax returns shall pay:</text> <level label="1"> <text>at least 25% of the estimated financial institution franchise tax shown on the declaration or amended declaration for a taxable year:</text> <level label="i"> <text>with the declaration or amended declaration that covers the year; and</text> </level> <level label="ii"> <text>with each quarterly return for that year; and</text> </level> </level> <level label="2"> <text>any unpaid financial institution franchise tax for the year shown on the financial institution franchise tax return that covers that year, with the return.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="8-211" title_number="8" title_name="Franchise Taxes" subtitle_number="2" subtitle_name="Financial Institution Franchise Tax"> <text>The Department shall:</text> <level label="1"> <text>administer the laws that relate to the financial institution franchise tax, consistent with this subtitle and with Title 10 of this article;</text> </level> <level label="2"> <text>adopt reasonable regulations to administer the provisions of laws that relate to the financial institution franchise tax, including regulations that establish, without regard to the methods required under Title 10 of this article, methods for allocation of net earnings based on gross volume of transactions;</text> </level> <level label="3"> <text>design the returns and other forms that, on completion, provide the information required for the administration of the financial institution franchise tax law;</text> </level> <level label="4"> <text>collect the financial institution franchise tax revenue, including penalties and interest; and</text> </level> <level label="5"> <text>certify that revenue to the Comptroller.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="8-212" title_number="8" title_name="Franchise Taxes" subtitle_number="2" subtitle_name="Financial Institution Franchise Tax"> <text>If a financial institution franchise tax refund claim under § 13-901 of this article is allowed, the Department shall certify the amount to the Comptroller for payment.</text> </section> <section article="gtg" article_name="Tax - General" number="8-214" title_number="8" title_name="Franchise Taxes" subtitle_number="2" subtitle_name="Financial Institution Franchise Tax"> <text>A financial institution may claim a credit against the financial institution franchise tax for wages paid to qualified employees as provided under Title 6, Subtitle 3 of the Economic Development Article.</text> </section> <section article="gtg" article_name="Tax - General" number="8-215" title_number="8" title_name="Franchise Taxes" subtitle_number="2" subtitle_name="Financial Institution Franchise Tax"> <text>A financial institution may claim a credit against the financial institution franchise tax for neighborhood and community assistance contributions as provided under § 6-404 of the Housing and Community Development Article.</text> </section> <section article="gtg" article_name="Tax - General" number="8-216" title_number="8" title_name="Franchise Taxes" subtitle_number="2" subtitle_name="Financial Institution Franchise Tax"> <text>A financial institution may claim a credit against the financial institution franchise tax for:</text> <level label="1"> <text>wages paid to a qualified employee with a disability; and</text> </level> <level label="2"> <level label="i"> <text>child care provided or paid for by a business entity for the children of a qualified employee with a disability as provided under § 21–309 of the Education Article; or</text> </level> <level label="ii"> <text>transportation provided or paid for by the business entity for a qualified employee with a disability as provided under § 21–309 of the Education Article.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="8-217" title_number="8" title_name="Franchise Taxes" subtitle_number="2" subtitle_name="Financial Institution Franchise Tax"> <text>A financial institution may claim a State tax credit against the financial institution franchise tax payable under this subtitle as provided under § 9-230 of the Tax - Property Article.</text> </section> <section article="gtg" article_name="Tax - General" number="8-218" title_number="8" title_name="Franchise Taxes" subtitle_number="2" subtitle_name="Financial Institution Franchise Tax"> <text>A financial institution may claim a credit against the financial institution franchise tax for employer-provided long-term care insurance as provided under § 10-710 of this article.</text> </section> <section article="gtg" article_name="Tax - General" number="8-220" title_number="8" title_name="Franchise Taxes" subtitle_number="2" subtitle_name="Financial Institution Franchise Tax"> <text>A financial institution may claim a credit against the financial institution franchise tax for One Maryland project costs and start–up costs as provided under Title 6, Subtitle 4 of the Economic Development Article.</text> </section> <section article="gtg" article_name="Tax - General" number="8-221" title_number="8" title_name="Franchise Taxes" subtitle_number="2" subtitle_name="Financial Institution Franchise Tax"> <text>A financial institution may claim a credit against the financial institution franchise tax for the cost of providing commuter benefits to the business entity’s employees as provided under § 2-901 of the Environment Article.</text> </section> <section article="gtg" article_name="Tax - General" number="8-301" title_number="8" title_name="Franchise Taxes" subtitle_number="3" subtitle_name="Savings and Loan Association Franchise Tax"> <level label="a"> <text>For all taxable years beginning before January 1, 2001, a franchise tax, measured by deposits held in the State, is imposed, for each calendar year, on each savings and loan association.</text> </level> <level label="b"> <text>For all taxable years beginning after December 31, 2000, the savings and loan association franchise tax is terminated.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="8-302" title_number="8" title_name="Franchise Taxes" subtitle_number="3" subtitle_name="Savings and Loan Association Franchise Tax"> <text>The savings and loan association franchise tax rate is 0.013% of the total withdrawal value of the deposits that a savings and loan association holds in the State on December 31st.</text> </section> <section article="gtg" article_name="Tax - General" number="8-303" title_number="8" title_name="Franchise Taxes" subtitle_number="3" subtitle_name="Savings and Loan Association Franchise Tax"> <text>A savings and loan association organized under the laws of this State and doing business outside this State may claim a credit against the savings and loan association franchise tax in an amount that equals any tax paid to another jurisdiction as a franchise tax on deposits held in this State.</text> </section> <section article="gtg" article_name="Tax - General" number="8-304" title_number="8" title_name="Franchise Taxes" subtitle_number="3" subtitle_name="Savings and Loan Association Franchise Tax"> <text>Each savings and loan association that, on December 31, holds deposits in the State shall complete, under oath, and file with the Comptroller a savings and loan association franchise tax return, on or before April 15 of the next year.</text> </section> <section article="gtg" article_name="Tax - General" number="8-305" title_number="8" title_name="Franchise Taxes" subtitle_number="3" subtitle_name="Savings and Loan Association Franchise Tax"> <text>A savings and loan association shall pay the savings and loan association franchise tax with the return that covers the period for which the tax is due.</text> </section> <section article="gtg" article_name="Tax - General" number="8-401" title_number="8" title_name="Franchise Taxes" subtitle_number="4" subtitle_name="Public Service Company Franchise Tax"> <level label="a"> <text>In this subtitle the following words have the meanings indicated.</text> </level> <level label="b"> <text>“Delivered for final consumption” means delivered by a public service company in its service area as measured at the customer meter or other point of final delivery.</text> </level> <level label="c"> <level label="1"> <text>“Gross receipts” means total operating revenue.</text> </level> <level label="2"> <text>“Gross receipts” includes:</text> <level label="i"> <text>gross or total earnings and total receipts;</text> </level> <level label="ii"> <text>for a telephone company, the full amount of approved and applicable federal and State tariff charges for telephone lifeline service without the discount provided by § 8–201(d) of the Public Utilities Article; and</text> </level> <level label="iii"> <text>for a telecommunications company providing interstate long distance telecommunications service, the gross charges from the sale of long distance telecommunications service that originates or terminates in the State and for which a charge is made to a service address located in the State, regardless of where the amount is billed or paid.</text> </level> </level> <level label="3"> <text>“Gross receipts” does not include:</text> <level label="i"> <text>any revenue that a public service company derives from an activity other than an electric, gas, or telephone business; or</text> </level> <level label="ii"> <text>net uncollectible revenue.</text> </level> </level> <level label="4"> <text>For a public service company engaged in a telephone business in the State, gross receipts does not include:</text> <level label="i"> <text>gross charges from the sale by the public service company to another public service company subject to the tax imposed by this subtitle of a service or product for resale;</text> </level> <level label="ii"> <text>gross charges from the sale by the public service company of Internet access service by which a connection is provided between a computer and the Internet; or</text> </level> <level label="iii"> <text>gross charges from the sale of telecommunications service obtained by using a prepaid telephone calling arrangement, as defined in § 11–101 of this article.</text> </level> </level> <level label="5"> <text>For a public service company engaged in the transmission, distribution, or delivery of electricity or gas in the State:</text> <level label="i"> <text>“gross receipts” includes:</text> <level label="1"> <text>except as provided in item (ii)2 and 3 of this paragraph, gross charges for the transmission, distribution, or delivery of electricity or natural gas or for distribution or delivery–related services; and</text> </level> <level label="2"> <text>competitive transition charges, intangible transition charges, and any other surcharge or other cost–recovery mechanism authorized for recovery of transition costs or the costs of demand side management or other energy conservation programs, universal service or other public purpose programs, or consumer education programs; and</text> </level> </level> <level label="ii"> <text>“gross receipts” does not include:</text> <level label="1"> <text>gross charges from the sale of electricity or natural gas;</text> </level> <level label="2"> <text>gross charges from the transmission, distribution, or delivery of electricity or natural gas to another public service company subject to the tax imposed under § 8–402 of this subtitle if the buyer intends to resell the electricity or natural gas; or</text> </level> <level label="3"> <text>gross charges from an interstate transmission network or from the transmission, distribution, or delivery of electricity or natural gas to a customer located in another state.</text> </level> </level> </level> </level> <level label="d"> <text>“Long distance telecommunications service” means telecommunications service for a telecommunication that does not originate and terminate in the same local calling area.</text> </level> <level label="e"> <text>“Production activity” has the meaning stated in § 11–101 of this article.</text> </level> <level label="f"> <text>“Public service company” means a person:</text> <level label="1"> <text>engaged in a telephone business in the State; or</text> </level> <level label="2"> <text>engaged in the transmission, distribution, or delivery of electricity or natural gas in the State.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="8-402" title_number="8" title_name="Franchise Taxes" subtitle_number="4" subtitle_name="Public Service Company Franchise Tax"> <level label="a"> <text>A franchise tax, measured by gross receipts, is imposed, for each calendar year, on each public service company:</text> <level label="1"> <text>engaged in a telephone business in the State; or</text> </level> <level label="2"> <text>engaged in the transmission, distribution, or delivery of electricity or natural gas in the State.</text> </level> </level> <level label="b"> <text>The tax imposed under subsection (a) of this section does not apply to a public service company that is:</text> <level label="1"> <text>a county;</text> </level> <level label="2"> <text>a municipal corporation;</text> </level> <level label="3"> <text>a nonprofit electric cooperative; or</text> </level> <level label="4"> <text>a public–private partnership formed for the generation of clean or renewable energy if:</text> <level label="i"> <text>30% or more of the electricity generated through the public–private partnership is purchased by the public partner; and</text> </level> <level label="ii"> <text>the clean or renewable energy generating station is sited on an eligible clean and renewable energy generation site as determined by the Department of the Environment, including:</text> <level label="1"> <text>rooftops;</text> </level> <level label="2"> <text>parking lots;</text> </level> <level label="3"> <text>landfills;</text> </level> <level label="4"> <text>brownfields sites;</text> </level> <level label="5"> <text>voluntary cleanup program sites;</text> </level> <level label="6"> <text>reclaimed mines;</text> </level> <level label="7"> <text>Superfund sites; and</text> </level> <level label="8"> <text>sediment or retention ponds.</text> </level> </level> </level> </level> <level label="c"> <text>The Department of the Environment may adopt regulations regarding the determination of eligible clean or renewable energy generation sites under subsection (b)(4) of this section.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="8-402.1" title_number="8" title_name="Franchise Taxes" subtitle_number="4" subtitle_name="Public Service Company Franchise Tax"> <level label="a"> <level label="1"> <text>In addition to any tax imposed under § 8-402 of this subtitle, a franchise tax is imposed for each calendar year on each public service company engaged in the transmission, distribution, or delivery of electricity or natural gas in the State.</text> </level> <level label="2"> <text>The tax imposed under this section is measured by kilowatt hours of electricity or therms of natural gas delivered by the public service company for final consumption in the State.</text> </level> </level> <level label="b"> <text>The tax imposed under subsection (a) of this section does not apply to therms of natural gas delivered for final consumption by a public service company that is:</text> <level label="1"> <text>a county; or</text> </level> <level label="2"> <text>a municipal corporation.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="8-403" title_number="8" title_name="Franchise Taxes" subtitle_number="4" subtitle_name="Public Service Company Franchise Tax"> <level label="a"> <text>The rate of the franchise tax imposed under § 8-402 of this subtitle is 2% of gross receipts derived from business in the State.</text> </level> <level label="b"> <text>The rate of the tax imposed under § 8-402.1 of this subtitle is:</text> <level label="1"> <level label="0"> <text>062 cents for each kilowatt hour of electricity delivered by the public service company for final consumption in the State; and</text> </level> </level> <level label="2"> <level label="0"> <text>402 cents for each therm of natural gas delivered by the public service company for final consumption in the State.</text> </level> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="8-404" title_number="8" title_name="Franchise Taxes" subtitle_number="4" subtitle_name="Public Service Company Franchise Tax"> <level label="a"> <text>Each public service company that, in a calendar year, has gross receipts derived from business in the State or delivers electricity or natural gas for final consumption in the State shall complete, under oath, and file with the Department a public service company franchise tax return, on or before April 15th of the next year.</text> </level> <level label="b"> <level label="1"> <text>Each public service company that reasonably expects its public service company franchise tax for a year to exceed $1,000 shall complete, under oath, and file with the Department a declaration of estimated tax, on or before April 15 of that year.</text> </level> <level label="2"> <text>A public service company required under paragraph (1) of this subsection to file a declaration of estimated tax for a taxable year shall complete and file with the Department a quarterly estimated tax return on or before June 15, September 15, and December 15 of that year.</text> </level> </level> <level label="c"> <text>A public service company shall file with the return an attachment that states any information that the Department requires to determine gross receipts derived from business in the State or kilowatt hours or therms of natural gas delivered for final consumption in the State.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="8-405" title_number="8" title_name="Franchise Taxes" subtitle_number="4" subtitle_name="Public Service Company Franchise Tax"> <level label="a"> <text>Except as provided in subsection (b) of this section, each public service company shall pay the public service company franchise tax with the return that covers the period for which the tax is due.</text> </level> <level label="b"> <text>A public service company required to file estimated public service company franchise tax returns under § 8-404(b) of this subtitle shall pay:</text> <level label="1"> <text>at least 25% of the estimated public service company franchise tax shown on the declaration or amended declaration for a taxable year:</text> <level label="i"> <text>with the declaration or amended declaration that covers the year; and</text> </level> <level label="ii"> <text>with each quarterly return for that year; and</text> </level> </level> <level label="2"> <text>any unpaid public service company franchise tax for the year shown on the public service company franchise tax return that covers that year, with the return.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="8-406" title_number="8" title_name="Franchise Taxes" subtitle_number="4" subtitle_name="Public Service Company Franchise Tax"> <level label="a"> <text>A public service company may claim a credit against the public service company franchise tax equal to the estimated tax paid under § 8-405(b) of this subtitle.</text> </level> <level label="b"> <level label="1"> <level label="i"> <text>Subject to the limitations of this subsection, a public service company, including any multijurisdictional public service company, may claim a credit against the public service company franchise tax in the amount of $3 for each ton of Maryland–mined coal that the public service company purchased in the calendar year.</text> </level> <level label="ii"> <text>The credit under this subsection may not be claimed for Maryland–mined coal purchased in a calendar year beginning after December 31, 2020.</text> </level> </level> <level label="2"> <level label="i"> <text>This paragraph applies only to credits claimed under this subsection for calendar years beginning on or after January 1, 2007.</text> </level> <level label="ii"> <text>The amount claimed as a credit under this subsection may not exceed the amount approved by the Department under this paragraph.</text> </level> <level label="iii"> <text>By January 15 of the calendar year following the end of the calendar year in which the Maryland–mined coal was purchased, a public service company, or a cogenerator or electricity supplier as defined in § 10–704.1 of this article, shall submit an application to the Department for approval of the credit allowed under this paragraph.</text> </level> <level label="iv"> <text>Subject to subparagraph (vi) of this paragraph, the total amount of credits approved by the Department under this paragraph for any calendar year may not exceed:</text> <level label="1"> <text>$4,500,000 for a calendar year beginning after December 31, 2008, but before January 1, 2013;</text> </level> <level label="2"> <text>$6,000,000 for a calendar year beginning after December 31, 2012, but before January 1, 2015; or</text> </level> <level label="3"> <text>$3,000,000 for a calendar year beginning after December 31, 2014, but before January 1, 2021.</text> </level> </level> <level label="v"> <text>Subject to subparagraph (vi) of this paragraph, if the total amount of credits applied for in any calendar year under this paragraph exceeds the maximum specified under subparagraph (iv) of this paragraph, the Department shall approve a credit under this paragraph for each applicant in an amount equal to the product of multiplying the credit applied for by the applicant times a fraction:</text> <level label="1"> <text>the numerator of which is the maximum specified under subparagraph (iv) of this paragraph; and</text> </level> <level label="2"> <text>the denominator of which is the total of all credits applied for by all applicants under this paragraph for the calendar year.</text> </level> </level> <level label="vi"> <level label="1"> <text>Of the total credits approved for any calendar year beginning after December 31, 2006, but before January 1, 2021, the Department shall reserve $2,250,000 of the credits for purchases of Maryland–mined coal that will be used by a facility in Maryland.</text> </level> <level label="2"> <text>If the total amount of credits applied for by all applicants for any calendar year for the purchase of Maryland–mined coal that will be used in Maryland exceeds $2,250,000, the Department shall approve a credit under this paragraph for each applicant in an amount equal to the product of multiplying the credit applied for by the applicant times a fraction:</text> </level> <level label="A"> <text>the numerator of which is $2,250,000; and</text> </level> <level label="B"> <text>the denominator of which is the total of all credits applied for by all applicants under this paragraph for the calendar year for the purchase of Maryland–mined coal that will be used in Maryland.</text> </level> </level> <level label="vii"> <text>On or before February 15 of the calendar year following the end of the calendar year in which the Maryland–mined coal was purchased, the Department shall certify to each applicant claiming a credit the amount of the tax credits approved by the Department for that applicant under this paragraph.</text> </level> </level> </level> <level label="c"> <level label="1"> <text>To prevent actual multiple taxation of the sale of interstate long distance telecommunications service, a long distance telecommunications company, upon proof that it has paid a properly due excise, sales and use, or gross receipts tax in another state on a sale the gross receipts from which are subject to taxation under this subtitle, shall be allowed a credit against the public service company franchise tax for the amount paid.</text> </level> <level label="2"> <text>The credit permitted under this subsection may not exceed the tax imposed under this subtitle.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="8-407" title_number="8" title_name="Franchise Taxes" subtitle_number="4" subtitle_name="Public Service Company Franchise Tax"> <text>A telephone company may claim a credit against the public service company franchise tax equal to all approved and applicable federal and State tariff charges for telephone lifeline service not billed to eligible subscribers as provided in § 8–201 of the Public Utilities Article.</text> </section> <section article="gtg" article_name="Tax - General" number="8-408" title_number="8" title_name="Franchise Taxes" subtitle_number="4" subtitle_name="Public Service Company Franchise Tax"> <text>The Department shall:</text> <level label="1"> <text>administer the laws that relate to the public service company franchise tax;</text> </level> <level label="2"> <text>adopt reasonable regulations to administer the provisions of laws that relate to the public service company franchise tax;</text> </level> <level label="3"> <text>design the returns and forms that, on completion, provide the information required for the administration of the public service company franchise tax laws;</text> </level> <level label="4"> <text>collect the public service company franchise tax revenue, including penalties and interest;</text> </level> <level label="5"> <text>pay that revenue into the General Fund of the State; and</text> </level> <level label="6"> <text>certify to the Comptroller that revenue.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="8-409" title_number="8" title_name="Franchise Taxes" subtitle_number="4" subtitle_name="Public Service Company Franchise Tax"> <level label="a"> <text>The public service company franchise tax with respect to gross receipts from telecommunications service shall be added to and disclosed as an element of the public service company’s charge to the customer for the service.</text> </level> <level label="b"> <text>A public service company may surcharge its customers for the public service company franchise tax imposed under § 8-402.1 of this subtitle.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="8-411" title_number="8" title_name="Franchise Taxes" subtitle_number="4" subtitle_name="Public Service Company Franchise Tax"> <text>A public service company may claim a credit against the public service company franchise tax for wages paid to qualified employees as provided under Title 6, Subtitle 3 of the Economic Development Article.</text> </section> <section article="gtg" article_name="Tax - General" number="8-412" title_number="8" title_name="Franchise Taxes" subtitle_number="4" subtitle_name="Public Service Company Franchise Tax"> <text>A public service company may claim a credit against the public service company franchise tax for neighborhood and community assistance as provided under § 6-404 of the Housing and Community Development Article.</text> </section> <section article="gtg" article_name="Tax - General" number="8-413" title_number="8" title_name="Franchise Taxes" subtitle_number="4" subtitle_name="Public Service Company Franchise Tax"> <text>A public service company may claim a credit against the public service company franchise tax for:</text> <level label="1"> <text>wages paid to a qualified employee with a disability; and</text> </level> <level label="2"> <level label="i"> <text>child care provided or paid for by a business entity for the children of a qualified employee with a disability as provided under § 21–309 of the Education Article; or</text> </level> <level label="ii"> <text>transportation provided or paid for by the business entity for a qualified employee with a disability as provided under § 21–309 of the Education Article.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="8-415" title_number="8" title_name="Franchise Taxes" subtitle_number="4" subtitle_name="Public Service Company Franchise Tax"> <text>A public service company may claim a credit against the public service company franchise tax for employer-provided long-term care insurance as provided under § 10-710 of this article.</text> </section> <section article="gtg" article_name="Tax - General" number="8-417" title_number="8" title_name="Franchise Taxes" subtitle_number="4" subtitle_name="Public Service Company Franchise Tax"> <level label="a"> <text>A public service company may claim a credit against the public service company franchise tax in an amount equal to:</text> <level label="1"> <level label="0"> <text>002 cents for each kilowatt hour of electricity in excess of 500 million up to 1,500 million kilowatt hours during a calendar year delivered for final consumption to a single industrial customer for use in a production activity at the same location in the State; and</text> </level> </level> <level label="2"> <level label="0"> <text>0455 cents for each kilowatt hour of electricity in excess of 1,500 million kilowatt hours during a calendar year delivered for final consumption to a single industrial customer for use in a production activity at the same location in the State.</text> </level> </level> </level> <level label="b"> <text>A public service company may claim a credit against the public service company franchise tax in an amount equal to the tax imposed for each therm of natural gas delivered for final consumption in the State to an industrial customer for use in a production activity in the State.</text> </level> <level label="c"> <text>The Public Service Commission shall require that the credits allowed under this section are passed through to the customers to whom the electricity or natural gas on which the credits are based is delivered.</text> </level> </section>