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A.  The tax imposed by this Part upon corporations shall be imposed upon real estate investment trusts and shall be computed only upon that part of the net income of the real estate investment trust which is subject to federal income tax as provided in Sections 857 and 858 of the Internal Revenue Code of 1986, as amended, except as otherwise provided in this Section.

B.  The term “real estate investment trust” shall have the meaning ascribed to such term in Section 856 of the Internal Revenue Code of 1986, as amended.

C.  The dividend paid deduction otherwise allowed by federal law in computing net income of a real estate investment trust that is subject to federal income tax shall not be allowed as a deduction in computing the tax imposed by this Part unless the real estate investment trust is either (1) a publicly traded real estate investment trust or (2) a qualified real estate investment trust as defined in this Section.

D.  For purposes of this Section, the term “qualified real estate investment trust” shall mean any real estate investment trust other than a real estate investment trust more than fifty percent of the voting power or value of the beneficial interests or shares of which are owned or controlled, directly or indirectly, by a single entity that is:

(1)  Subject to the provisions of Subchapter C of Chapter 1 of Subtitle A of Title 26 of the United States Code, as amended, and not exempt from federal income tax pursuant to the provisions of Section 501 of the Internal Revenue Code of 1986, as amended.

(2)  Not a real estate investment trust as defined in this Section or a qualified real estate investment trust subsidiary under Section 856(i) of the Internal Revenue Code of 1986, as amended.

Acts 1986, 1st Ex. Sess., No. 16, §1, eff. Dec. 24, 1986; Acts 2005, No. 396, §1, eff. for all taxable periods beginning after Dec. 31, 2005.