Comptroller of the Treasury v. American Satellite Corp.

MURPHY, Chief Judge.

The question presented is whether, under Maryland’s income tax statutes, out-of-state losses incurred by a multistate corporation reporting no federal taxable income may offset in-state capital gains allocable to this State under Maryland Code (1957, 1980 Repl.Vol.), Article 81, § 316(b)(3).

I

Maryland’s corporate income tax was originally enacted in 1937. 1 This Act taxed the “net income” of a corporation for the years 1937 and 1938 only. Codified as Code (1935 Supp.), Article 81, § 219, “net income” was defined as “the gross income of a taxpayer less the deductions allowed…