Maryland Code, TAX – GENERAL 8-205
Terms Used In Maryland Code, TAX - GENERAL 8-205
- County: means a county of the State or Baltimore City. See
- Federal Reserve System: The central bank of the United States. The Fed, as it is commonly called, regulates the U.S. monetary and financial system. The Federal Reserve System is composed of a central governmental agency in Washington, D.C. (the Board of Governors) and twelve regional Federal Reserve Banks in major cities throughout the United States. Source: OCC
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Person: includes an individual, receiver, trustee, guardian, personal representative, fiduciary, representative of any kind, corporation, partnership, business trust, statutory trust, limited liability company, firm, association, or other nongovernmental entity. See
- state: means :
(1) a state, possession, territory, or commonwealth of the United States; or
(2) the District of Columbia. See
(2) (i) “Foreign person” means:
1. an individual who is not a resident of the United States;
2. a company, partnership, or trust that is not organized under the laws of the United States or of a state; and
3. a foreign branch of a company organized under the laws of the United States or of a state.
(ii) “Foreign person” includes:
1. a foreign government or any of its units;
2. an international organization or any of its agencies;
3. an international banking facility; or
4. 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.
(3) “International banking facility” means a financial institution that:
(i) 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;
(ii) is located in a county where an approved foreign trade zone is located; and
(iii) 1. 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
2. derives earnings from a foreign exchange trading or hedging transaction that is related to a loan described in item 1 of this item.
(4) “Liability” means the total liabilities shown in the records of an international banking facility.
(b) In computing taxable net earnings, an international banking facility shall:
(1) 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
(2) add any loss computed under subsection (c) of this section to its taxable net earnings.
(c) (1) 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:
(i) substantially all of the proceeds of that loan are used outside the United States; or
(ii) all of the proceeds are used in an approved foreign trade zone by:
1. a foreign individual;
2. an individual residing in the United States; or
3. 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.
(2) 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.
(3) 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:
(i) the numerator of which is the fiscal year average amount of liability that was neither owed to nor received from a foreign person; and
(ii) the denominator of which is the fiscal year average amount of liability that was owed to or received from any person.