Md. Code, Tax - General § 8-204
This is the official text of Md. Code, Tax - General § 8-204, part of Maryland’s Code, Tax - General — governs state taxation.
Not legal advice. This page reproduces the official text of a government statute for reference only. Laws change, and how a statute applies depends on your specific facts. For advice about your situation, consult a licensed attorney in your state.
§8–204.
Official statutory text
(a) A financial institution shall compute its net earnings:
(1) based on the accounting period used as its fiscal year; and
(2) 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.
(b) 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:
(1) profit realized from the sale or exchange of bonds issued by this State or a political subdivision of this State;
(2) dividends received from foreign corporations and included in federal gross income under § 78 of the Internal Revenue Code;
(3) interest derived from a United States obligation;
(4) State tax–exempt interest received from a mutual fund and allowed to be subtracted under § 10–307(g)(4) of this article; and
(5) interest excluded from federal gross income under § 103 of the Internal Revenue Code and derived from a bond:
(i) issued by a state or a public corporation, special district, or political subdivision of a state or their instrumentalities; or
(ii) 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.
(c) 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.
(1) based on the accounting period used as its fiscal year; and
(2) 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.
(b) 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:
(1) profit realized from the sale or exchange of bonds issued by this State or a political subdivision of this State;
(2) dividends received from foreign corporations and included in federal gross income under § 78 of the Internal Revenue Code;
(3) interest derived from a United States obligation;
(4) State tax–exempt interest received from a mutual fund and allowed to be subtracted under § 10–307(g)(4) of this article; and
(5) interest excluded from federal gross income under § 103 of the Internal Revenue Code and derived from a bond:
(i) issued by a state or a public corporation, special district, or political subdivision of a state or their instrumentalities; or
(ii) 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.
(c) 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.
Status: in_force · Read it on the official government site
Need a lawyer in Maryland?
Find a Maryland lawyer
About this page: Statute text is reproduced from official government publishers via the
Open US Law dataset
(Vaquill AI, snapshot v2026.08, CC BY 4.0). Primary legislative text like this is public domain under the government-edicts doctrine
(Georgia v. Public.Resource.Org, 2020). We link every section back to its official source so you can verify it independently.