Recognizing the positive effect having a cutting-edge industry centered in your state can bring, Maryland is offering incentives for Cybersecurity companies that locate here. With its close nearness to Washington DC and a profoundly educated workforce, Maryland has the perfect blend of elements for quick development of the Cybersecurity business.
Recognizing the benefits of Maryland, the federal government has made Stronghold Meade, Maryland a center point for Cybersecurity and is searching for other areas in the nearby Maryland rural areas to establish relationships with Cybersecurity businesses. A large number of the federal government agencies that are focused on Cybersecurity are centered in Maryland including the NSA, U.S. Cyber Order, and the Public Institute of Norms and Technology, making this area one of the fastest developing areas in the country for the business.
With the quick expansion of Distributed computing and the steady stream of new “Bugs,” everyone is worried about their online security. Both government and commercial businesses need help with protecting their computer operations and are seeking qualified advisors. Like other states, Maryland has developed Cybersecurity experts, education and preparation programs, technology, products, systems and infrastructure. These projects are specifically tailored to the needs of the emerging Cybersecurity industry.
The states are battling to draw in these types of businesses to their state because of the steady employment and tax revenue that comes from this new-age business model. Recently Maryland lured a Cybersecurity company – Luminal – to relocate to the state with several cash and tax credit incentives. The incentive package included a $600,000 investment by the state in the company and tax credits.
These incentives helped the company secure a new round of market investments so the company can move up to the next level of development. Beginning in 2014, Maryland began offering a tax credit to Cybersecurity companies. The Maryland Cybersecurity Tax Credit is based on new investments in the Maryland-based company. The investors don’t get the tax credit, because the Maryland lawmakers wanted the incentive to remain in Maryland.
Instead, the tax credit is given to the Cybersecurity company.
The tax credit is equal to 33% of investments in the Qualified Maryland Cybersecurity company. The credit can depend on $250,000 per investor and 15% of the program allocation. The tax benefit is realized in one of three ways – reduce the income tax commitment of the company or reduce the owner’s tax bill or the company can get the credit in cash assuming there is no tax commitment. The details concerning what is a qualified Cybersecurity company are extensive. In rundown, it is a Maryland-based, little nonpublic corporation that does specific activities and has a qualified investor, who leaves the investment in the company for a while. In late 2013, the Maryland Department of Business and Economic Development began accepting applications for the primary year of the state’s CyberSecurity tax credit.
When the state’s monetary year ended June 30, 2014, a little over $1 Million of credits had been issued to three qualified companies based on 15 investments in these companies. The state budgeted $3 Million for the credit and only 33% of the money was claimed. There were several reasons suggested why some of the state money was left on the table, for example, the short half year period for applying for the credit, the severe capability requirements and the way that the credit dollars should remain in Maryland. For the new year beginning July 1, 2014, state authorities are trusting more businesses will be attracted to apply for the credit and other incentives offered to businesses.
The Maryland Business and Economic Development authorities are chipping away at ways of carrying new investments to the state by actively pursuing Cybersecurity companies with cash investments of state dollars and tax credits. The state is trusting the creativity of the investment market will track down new ways of enticing investors into the Cybersecurity business and overcome the rule about the investment remaining in Maryland.
It is pretty clear that Cybersecurity will be a high need for government agencies and businesses in the foreseeable future. The practically everyday news reports about prominent advanced “break-ins” will ensure this industry enjoys above-average development and business success. Cybersecurity companies ought to make sure they take advantage of the government incentives -, for example, the Maryland tax credits and cash investments – to improve their main concern and add to their development factor…