Income Tax - Credit for Cybersecurity Measures Undertaken by Small Businesses
Impact
If enacted, HB1210 would amend the state's tax laws to allow qualified small businesses to claim a refundable tax credit for costs incurred during the taxable year. For example, businesses could receive up to $1,000 for initial cybersecurity risk assessments and up to $500 for recurring cybersecurity measures, which can include antivirus software, multi-factor authentication, and data encryption. This could foster a safer business environment, particularly for small enterprises that may struggle to allocate funds for such critical investments.
Summary
House Bill 1210 proposes to establish a credit against the Maryland state income tax specifically aimed at small businesses that invest in cybersecurity measures. This bill defines small businesses as those employing 50 or fewer individuals, or no employees at all. The primary purpose of the bill is to alleviate some financial burden that small businesses face when implementing necessary cybersecurity protocols, thereby encouraging them to enhance their security postures in response to increasing cyber threats.
Contention
Discussions surrounding the bill are expected to touch upon its fiscal implications for the state budget, particularly concerning the potential loss of tax revenue due to these credits. Proponents of HB1210 argue that investing in cybersecurity is crucial for protecting small businesses from disruptive cyberattacks, while opponents may raise concerns about the overall effectiveness of these credits in driving substantial change in cybersecurity practices. Therefore, a key point of contention will likely be how effectively the bill addresses the actual cybersecurity needs of small businesses against the backdrop of state fiscal responsibility.