Page:United States Statutes at Large Volume 86.djvu/980

 PUBLIC LAW 92-512-OCT. 20, 1972



[86 STAT.

"SEC. 6362. QUALIFIED STATE INDIVIDUAL INCOME TAXES. " (a) QUALIFIED STATE INDIVIDUAL INCOME TAXES DEFINED.—For

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purposes of this subchapter— " (1) IN GENERAL.—The term 'qualified State individual income tax' means— " (A) a qualified resident tax, and " (B) a qualified nonresident tax. "(2) QUALIFIED RESIDENT TAX.—The term 'qualified resident tax' means a tax imposed by a State on the income of individuals who are residents of such State which is either— "(A,) a tax based on taxable income which meets the requirements of subsection (b), or " (B) a tax which is a percentage of the Federal tax which meets the requirements of subsection (c), and which, in addition, meets the requirements of subsections (e) and (f). "(3) QUALIFIED NONRESIDENT TAX.—The term 'qualified nonresident tax' means a tax which is imposed by a State on the wage and other business income of individuals who are not residents of such State and which meets the requirements of subsections (d),(e),and(f). " (b) QUALIFIED RESIDENT TAX BASED ON TAXABIE INCOME.—

^f'To^*;,^*' 26 USC 63.

JB3 Stat.^5^80; 85 Stat. 558.

78 Stat. 40.

" (1) IN GENERAL.—A tax meets the requirements of this subsection only if it is imposed on an amount equal to the individual's taxable income (as defined in section 63) for the taxable year, T

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adjusted— " (A) by subtracting an amount equal to the amount of his interest on obligations of the United States which was included in his gross income for the year, " (B) by adding an amount equal to his net State income tax deduction for the year, and " (C) by adding an amount equal to his net tax-exempt income for the year. "(2) PERMITTED ADJUSTMENTS.—A tax which otherwise meets the requirements of paragraph (1) shall not be deemed to fail to meet such requirements solely because it provides for one or more of the following adjustments: " (A) There is imposed a tax on the amount taxed under section 56 (relating to the minimum tax for tax preferences). " (B) A credit determined under rules prescribed by the Secretary or his delegate is allowed against such tax for income tax paid to another State or a political subdivision thereof. "(3) N E T STATE INCOME TAX DEDUCTION.—For purposes of this subsection and subsection (c), the term 'net State income tax deduction' means the excess (if any) of (A) the amount deducted from income under section 164(a)(3) as taxes paid to a State or a political subdivision thereof, over (B) amounts included in income as recoveries of prior income taxes paid to a State or a political subdivision thereof which had been deducted under section 164(a)(3). "(4) N E T TAX-EXEMPT INCOME.—For purposes of this subsection and subsection (c), the term 'net tax-exempt income' means the excess (if any) of— " (A) the interest on obligations described in section 103 (a)(1) other than obligations of the State and its political subdivisions, and

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