May 26, 2005

The Honorable Michael E. Busch
Speaker of the House
State House
Annapolis, MD 21401

Dear Mr. Speaker:

In accordance with Article II, Section 17 of the Maryland Constitution, today I have vetoed House Bill 638 - Income Tax - Corporations - Payments to Related Entities - Foreign Taxes.

This bill provides that specified taxes imposed by specified foreign nations be taken into account for purposes of specified exceptions to a requirement that otherwise deductible interest expenses and intangible expenses paid by a corporation to related entities be added to the federal taxable income to determine Maryland modified income under specified circumstances and applies the Act to tax years after 2004. Senate Bill 341, which was passed by the General Assembly and signed by me, accomplishes the same purpose. Therefore, it is not necessary for me to sign House Bill 638.

Very truly yours,
Robert L. Ehrlich, Jr.