A Push For Cyber Security

CyberMaryland Act Of 2018 Could Encourage A Tax Credit Of Up To $50,000 To Maryland Small Businesses Who Purchase Cybersecurity Technology From Maryland Cybersecurity Firms

“In the emerging field of cybersecurity, Maryland has become the cyber capital of America. Our nation’s premier cyber-related federal agencies and intelligence assets are located here, and we are home to more than 1,200 cybersecurity companies.” (Remarks by Maryland Governor Larry Hogan, “Maryland Governor’s Business Summit,”  5/18/17).

 “‘Qualified buyer’ means any entity that has less than 50 employees in the State and that is required to file an income tax return in the state. ‘Qualified seller’ means a cybersecurity business that: has its headquarters and base of operations in the State;... owns or has properly licensed any proprietary cybersecurity technology… Subject to paragraphs (2) and (3) of this subsection, a qualified buyer may claim a credit against the State income tax in an amount equal to 50% of the cost incurred during the taxable year to purchase cybersecurity technology from one or more qualified sellers.. For any taxable year, the credit allowed under this section may not exceed $50,000 for each qualified buyer.” (“Senate Bill 310,” Maryland General Assembly, 1/22/18) 

Provision From Governor Hogan’s Proposal Which Offers A Tax Credit Up To $50,000 To Maryland Small Businesses Who Purchase Cybersecurity Technology From Maryland Cybersecurity Firms. Subject to paragraphs (2) and (3) of this subsection, a qualified buyer may claim a credit against the State income tax in an amount equal to 50% of the cost incurred during the taxable year to purchase cybersecurity technology from one or more qualified sellers.. For any taxable year, the credit allowed under this section may not exceed $50,000 for each qualified buyer.” (“Senate Bill 228,” Maryland General Assembly, 3/16/18) 

The Proposal Also Incentivizes Investment In Maryland Cybersecurity Companies By Providing A Subtraction Modification From Federal Adjusted Gross Income For Certain Income Realized On The Disposition Of An Investment. “Long-term capital gain’ has the meaning stated in § 1222 of the Internal Revenue Code. The subtraction under subsection (a) of this section includes the amount of long-term capital gain income that is realized from the sale, transfer, assignment, or other disposition of an investment in a cybersecurity company.”  (“Senate Bill 310,” Maryland General Assembly, 1/22/18)