EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb1284*
HOUSE BILL 1284
Q3 2lr1199
By: Delegates Rose, Buckel, Chisholm, Hartman, Howard, Kipke, Kittleman,
Krebs, McComas, Reilly, Saab, Shoemaker, Szeliga, and Thiam
Introduced and read first time: February 11, 2022
Assigned to: Ways and Means
A BILL ENTITLED
AN ACT concerning 1
Income Tax – Credit for Cybersecurity Measures Undertaken by Small 2
Businesses 3
FOR the purpose of authorizing a credit against the State income tax for a certain small 4
business for costs incurred by the small business during the taxable year for certain 5
cybersecurity measures undertaken by the small business; making the credit 6
refundable; and generally relating to a credit against the State income tax for 7
cybersecurity measures undertaken by small businesses. 8
BY adding to 9
Article – Tax – General 10
Section 10–754 11
Annotated Code of Maryland 12
(2016 Replacement Volume and 2021 Supplement) 13
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 14
That the Laws of Maryland read as follows: 15
Article – Tax – General 16
10–754. 17
(A) (1) IN THIS SECTION , “SMALL BUSINESS ” MEANS A BUSINESS 18
CONDUCTED BY AN INDIVIDUAL , A PARTNERSHIP , A LIMITED PARTNERSHI P, A 19
LIMITED LIABILITY PA RTNERSHIP, A LIMITED LIABILITY COMPANY, OR A 20
CORPORATION THAT EMP LOYS 50 OR FEWER EMPLOYEES . 21
(2) “SMALL BUSINESS ” INCLUDES A BUSINESS THAT DOES NOT 22
EMPLOY ANY EMPLOYEES . 23 2 HOUSE BILL 1284
(B) A SMALL BUSINESS MAY C LAIM A CREDIT AGAINS T THE STATE INCOME 1
TAX IN AN AMOUNT EQUAL T O THE ACTUAL COSTS INCURRED BY TH E SMALL 2
BUSINESS DURING THE TAXABLE YEAR : 3
(1) TO CONDUCT A N INITIAL CYBERSECURITY RISK A SSESSMENT AND 4
IMPLEMENT RECOMMENDA TIONS RESULTING FROM THE ASSESSMENT , NOT TO 5
EXCEED $1,000; OR 6
(2) FOR RECURRING CYBERSECURITY MEASURES UNDERTAKEN BY 7
THE SMALL BUSINESS , INCLUDING CYBERSECUR ITY RISK ASSESSMENTS OTHER 8
THAN AN INITIA L ASSESSMENT UNDER P ARAGRAPH (1) OF THIS SUBSECTION , 9
ANTIVIRUS SOFTWARE , MULTIFACTOR AUTHENTI CATION, AND DATA ENCRYPTION , 10
NOT TO EXCEED $500. 11
(C) IF THE CREDIT ALLOWED UNDER THIS SECTION I N ANY TAXABLE YEAR 12
EXCEEDS THE STATE INCOME TAX FOR THAT TAXABLE YEAR , THE SMALL BUSINESS 13
MAY CLAIM A REFUND I N THE AMOUNT OF THE EXCESS. 14
(D) TO CLAIM THE CREDIT A LLOWED UNDER THIS SE CTION, THE SMALL 15
BUSINESS SHALL ATTACH TO THE SMALL BUSINESS ’S INCOME TAX RETURN OR 16
OTHERWISE FILE WITH THE COMPTROLLER PROOF OF THE COSTS I NCURRED BY THE 17
SMALL BUSINESS FOR WHICH THE SMALL BUSI NESS MAY CLAIM THE C REDIT UNDER 18
THIS SECTION. 19
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 20
1, 2022, and shall be applicable to all taxable years beginning after December 31, 2021. 21