Theodore R. McKeldin                                359

quate time available for deliberation in a ninety day session. I trust
that this will lead to a final, sensible solution of this recurring problem
of alleged confusion of authority in training school administration,
together with a further considered determination between the relative
merits of a single advisory board, as contrasted with individual
boards, and the source of membership selections.

Sincerely,

(s) Theodore R. McKeldin,

Governor.
TRMcK/rk

House Bill No. 115—Non-Resident Income Taxes

AN ACT to repeal and re-enact, with amendments, Section 282 of
Article 81 of the Annotated Code of Maryland, (1951 Edition),
title "Revenue and Taxes", sub-title "Income Tax", exempting a
non-resident's income from taxation under certain instances.

April 17, 1956.

Honorable John C. Luber
Speaker of the House of Delegates
State House
Annapolis, Maryland

Dear Mr. Speaker:

House Bill 115 would exempt the income of a non-resident received
for services performed in this state, as distinguished from income
from operation of a business within the state. The exemption is
granted if the non-resident's home state exempts similar earnings of
a Maryland resident for services within that state. The Bill would
thus apply a reciprocal tax exemption, not only to states having an
income tax law with a provision similar to that of the instant Bill, but
would exempt income of non-residents from states which impose no
income tax whatever. This would seem to be a clear departure from
the existing policy of the state that reciprocal tax exemptions be
applied in exact equivalents. Thus, Section 287 of Article 81 of the
Annotated Code of Maryland (1951 Ed.) recognizes as a credit against
the Maryland tax in the return of a non-resident, the tax paid to his
state of residence, if such state accords similar credit to Maryland
residents who have become liable there.

House Bill 115 would make it unnecessary for exempted non-resi-
dents to file a Maryland return and compute credits, and would elimi-
nate withholding from them for the Maryland income tax. The spon-
sors of the bill fully intended that it cover residents of states with
no income tax law, as well as residents of states having a tax law with
reciprocal provisions. The Income Tax Division of the Comptroller's
office did not oppose the bill in legislative hearings because of doubts
then raised as to the propriety of making a distinction in the exemp-
tion between non-income tax and reciprocal income tax states. In
addition, the Income Tax Division was then, and is still, in general
accord with the basic objectives of the bill, in order to ease difficult
administrative problems of unnecessary collection and refunding of
withholding taxes.