Maryland’s newest tax credit, the Buy Maryland Cybersecurity (BMC) Tax Credit, was established to promote the cybersecurity industry by helping small businesses buy cybersecurity technology and services from Maryland-based cybersecurity companies.
Businesses are eligible for the tax credit on a first-come, first-served basis while funding is available. Maryland’s Department of Commerce is granting $3.0 million for the purchase of cybersecurity technologies and $1.0 million for cybersecurity services.
Eligible Maryland companies may claim a tax credit of 50% of the net purchase price of cybersecurity technology and services or up to $50,000 per tax year from a Qualified Maryland Cybersecurity Seller. Additionally, a Qualified Maryland Company may apply for the tax credit of up to $100,000 in cybersecurity purchases from Qualified Maryland Cybersecurity Sellers in a single tax year.
Purchasing Cybersecurity Technologies or Services from a Third-Party Reseller: How it Works
- Maryland companies may purchase Cybersecurity technologies or services from a third-party reseller, however the purchase price of the sales must be decreased by 20% before calculating the 50% tax credit.
- A reseller is any company selling cybersecurity technologies or services which is not identified as a certified Qualified Maryland Cybersecurity Seller by the Maryland Department of Commerce. However, the technology or service purchased must have been created by a Qualified Maryland Cybersecurity Seller.
- The name of the Qualified Maryland Cybersecurity Seller must be identified on the invoice from the third-party seller along with a description of the technology or service purchased.
Who is Eligible and Where to Purchase
- A Maryland business may apply for the tax credit if they employ 50 or fewer workers, operate as a for-profit organization and file an income tax return in the state of Maryland.
- The tax credit is authorized for the purchase of cybersecurity technologies that are goods and products designed to protect business information.
- All purchases must be made from a Qualified Maryland Cybersecurity Seller or Qualified Maryland Cybersecurity Reseller.
Application Steps
- Purchase cybersecurity technologies and/or services from a Qualified Maryland Cybersecurity Seller.
- Complete the Application form and submit your application plus your back-up documents to:
Maryland Department of Commerce
ATTN: Tax Incentives
World Trade Center
401 E. Pratt Street, 17th Floor
Baltimore, Maryland 21202 - Receive your tax credit certificate from the Department of Commerce.
- Submit tax credit certificate to the Comptroller of Maryland when filing your state income tax return.
Questions? Need help with your application? We can help. Contact us at 703-218-3600 or click here. To review our business planning articles, click here. To learn more about MCB’s tax practice and our tax experts, click here.
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