(a) Except as provided in subsections (b) and (c) of this section, a tax collector shall assess a penalty not exceeding 25% of the amount underestimated, if a person who is required to estimate and pay digital advertising gross revenues tax, financial institution franchise tax, public service company franchise tax, or income tax under § 7.5–301, § 8–210(b), § 8–405(b), or § 10–902 of this article: (1) fails to pay an installment when due; or (2) estimates a tax that is: (i) less than 90% of the tax required to be shown on the return for the current taxable year; and (ii) less than 110% of the tax paid for the prior taxable year, reduced by the credit allowed under § 10–703 of this article. (b) A penalty may not be assessed on the underestimation of individual income tax if: (1) at least 90% of the individual’s taxable income is also taxable by another state; and (2) the underestimation is of the county income tax only. (c) A tax collector may not assess a penalty on unpaid individual income tax under subsection (a) of this section if the amount of unpaid income tax is less than one-half the amount specified in § 6654(e)(1) of the Internal Revenue Code.
Maryland Legal Code