Recently, Maryland Governor Martin O’Malley signed into law the Cybersecurity Investment Incentive Tax Credit. The credit is to be used against the state income tax of a Maryland cybersecurity company. To be eligible for the credit, a Maryland-headquartered company primarily engaged in developing cybersecurity technology, as defined by Maryland, must have fewer than 50 full-time employees, have an aggregate capitalization of at least $100,000, and cannot have been active for more than five years. The amount of the credit, capped at $250,000, will equal 33 percent of a qualified investment made by an outside investor in the company. The investor, after making the proposed investment, cannot own or control more than 25 percent of the company’s equity interests. An application must be filed with the Maryland Department of Business and Economic Development for approval and certification.
This credit comes at a time when the U.S. Congress debates legislation related to cybersecurity and cybercrime. The cybersecurity industry will very likely see an increase in investment by both the public and private sectors during the coming years.
If you have questions regarding this credit or other issues, please contact Javier Siervo at JSiervo@brg-expert.com or 202.480.2735.
The views expressed in this article are those of the authors and do not necessarily reflect the position or policy of Berkeley Research Group, LLC.
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