[Code of Federal Regulations]
[Title 26, Volume 18]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR301.6362-3]

[Page 320]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 301_PROCEDURE AND ADMINISTRATION--Table of Contents
 
               Seizure of Property for Collection of Taxes
 
Sec. 301.6362-3  Qualified resident tax which is a percentage of Federal 
tax.

    (a) In general. A tax meets the requirements of section 6362(c) and 
this section only if:
    (1) The tax is imposed as a single specified percentage of the 
excess of the taxes imposed by chapter 1 over the sum of the credits 
allowable under part IV of subchapter A of chapter 1 (other than the 
credits allowable under sections 31 and 39), and
    (2) The amount of the tax is decreased by the amount of the decrease 
in such liability which would result from excluding from the taxpayer's 
gross income an amount equal to the amount of interest on obligations of 
the United States which was included in his gross income for the taxable 
year.
    (b) Permitted adjustments. A tax which otherwise meets the 
requirements of paragraph (a) of this section shall not be deemed to 
fail to meet such requirements solely because it provides for one or 
more of the following three adjustments:
    (1) The amount of a taxpayer's liability for tax is increased by the 
amount of the increase in such liability which would result from 
including in such taxpayer's gross income all of the following:
    (i) An amount equal to the amount of his net State income tax 
deduction, as defined in paragraph (a) of Sec. 301.6362-4, for the 
taxable year,
    (ii) An amount equal to the amount of his net tax-exempt income, as 
defined in paragraph (b) of Sec. 301.6362-4, for the taxable year, and
    (iii) If a credit is allowed against the tax under paragraph (b)(3) 
of this section for sales tax imposed by the State or a political 
subdivision thereof, an amount equal to the amount of his deduction 
under section 164(a)(4) for such sales tax.
    (2) A credit meeting the requirements of paragraph (c) of Sec. 
301.6362-4 is allowed against the tax for the income tax of another 
State or a political subdivision thereof.
    (3) A credit is allowed against the tax for all or a portion of any 
general sales tax imposed by the State or a political subdivision 
thereof with respect to sales either to the taxpayer or to one or more 
of his dependents.
    (c) Method of making adjustments. Except as specifically provided in 
paragraphs (a)(2) and (b)(1) of this section and in paragraph (c)(2) of 
Sec. 301.6362-4, no account shall be taken of any reduction or increase 
in the Federal adjusted gross income which would result from the 
exclusion from, or inclusion in, gross income of the items which are the 
subject of the adjustments provided in those paragraphs. Thus, for 
example, when for purposes of the calculation the taxpayer's Federal 
income tax liability is adjusted to reflect the exclusion from gross 
income of interest on obligations of the United States, no change shall 
be made in the amount of the taxpayer's deduction for medical expenses, 
or in the amount of his charitable contribution base, even though such 
amounts would ordinarily depend upon the amount of adjusted gross 
income. Also, when calculating the adjusted Federal tax liability to 
which the rate of the State tax is to be applied, no adjustment shall be 
made in the amount of any credit against Federal tax to which a taxpayer 
is entitled.

[T.D. 7577, 43 FR 59366, Dec. 20, 1978]