### Question
How is the "maximum tax liability" defined?


### Answer
The term **maximum tax liability** is defined in *15 U.S.C. § 683* as follows -

> the amount of income allocated to each partner or shareholder (including an allocation to the Administration as if it were a taxpayer) for Federal income tax purposes in the income tax return filed or to be filed by the company with respect to the fiscal year of the company immediately preceding such distribution, multiplied by the highest combined marginal Federal and State income tax rates for corporations or individuals, whichever is higher, on each type of income included in such return

#### Citation:
  - *15 U.S.C. § 683*
  - Heading: **CHAPTER 14B-SMALL BUSINESS INVESTMENT PROGRAM > SUBCHAPTER III-SMALL BUSINESS INVESTMENT COMPANIES**

