Do You Qualify for the Buy Maryland Tax Credit (BMC)?
As world events and technology continue to disrupt small businesses and everyday people become more exposed to cyber threats, digital technology is required for business success and survival.
Because these trends have introduced increased cybersecurity threats that affect millions of people and organizations, regardless of your industry, now is the time to prioritize data and information systems protection by investing in security technologies.
Many businesses and individuals still believe that encryption and firewalls are enough to keep data and information systems secure. But, if the 21st-century data breaches and cyberattacks have proven anything, it is that these two security measures provide the allure of safety on the surface.
Below the surface, cybersecurity demands more than firewalls and encryption. Sure, they provide some protection against breaches, but 40% of internet break-ins happen despite these measures. This is why incentives like the Buy Maryland Tax Credit are essential for businesses regardless of industry. This initiative provides businesses a tax credit once they invest in security technologies in Maryland.
Let's dig deeper into the Buy Maryland Cybersecurity (BMC) Tax Credit, how it works, who is eligible, and why it is crucial for your business.
Defining The Buy Maryland Cybersecurity (BMC) Tax Credit
State and local governments routinely offer businesses fiscal incentives in rebates, tax credits, and cash grants, which amount to $90 billion. Now, the state of Maryland under the Department of Commerce is offering the BMC Tax Credit for two primary reasons:
- To promote the cybersecurity industry
- To help small businesses buy cybersecurity technology or services to protect business data and information
What is Small Business Cybersecurity
These products can detect and prevent:
- Unauthorized access to data, information, information systems, and the transfer of data and information
- Impairment or manipulation of the integrity, availability, and confidentiality of information and data stored or transferred
- Extrusion or exfiltration of data
What Does This Mean For Your Business?
It's simple. Invest in security technologies and services to earn tax credits. The only caveat here is that you must purchase these products or services from a Qualified Maryland Cybersecurity seller and qualify for the tax credit yourself.
Don't miss it: The BMC grant totals $4 million. $3 million designated for purchasing cybersecurity technologies, and $1 million assigned to cybersecurity services.
Do you qualify? Talk to a qualified Maryland Cybersecurity Seller and find out if you qualify.
The BMC Tax Credit is given on a first-come, first-served basis, meaning the earlier you send your registration, the better the chance you will have at saving cost on your taxes. This is a yearly claim for 50% of your net purchase cost of the cybersecurity products and services for that year.
You can claim up to $50,000 in tax credit every year if you qualify. Since the Tax Credit is a 50% claim on your purchases, this means that you can apply for a tax credit of $100,000 for your yearly purchases of cybersecurity technologies and services from any qualified seller. Before calculating your sales purchase price, you must deduct 20% and apply for the 50% tax credit. The 20% is the estimate made by the Department of Commerce to commemorate the percentage added by the third party during resale.
How to Qualify for the BMC Tax Credit
- You must be registered as a company in Maryland and for profit, but not as a sole proprietor
- You must register your business at least four months before being considered eligible
- Your business must be in operation five years or more
- You must file your income tax return in Maryland
- Your company must have less than 50 employees
- Every product or service you purchase must be from an authorized seller or reseller
- An eligible seller must sell cybersecurity technologies that fit the description above and services qualified by the National Institute of Standards and Technology's (NIST)
How to Apply for the BMC Tax Credit
Program applications must be submitted for review each year to gain the tax credit. You must also gather specific documentation as instructed by the Department of Commerce in Maryland, such as a Certificate of Good Standing and a business plan.
As a business:
- Buy cybersecurity products or services from an authorized Cybersecurity seller in Maryland
- Fill out the Application form provided by the Department of Commerce and submit your form and documents to the Department of Commerce in Maryland
If considered eligible, you will get your tax credit certificate. This is the certificate you submit to the Maryland Comptroller when filing your income tax return to claim the tax credit.
The Ultimate Goal: Get You Protected
Like any other state or government incentive, the Buy Maryland Tax Credit is designed to entice businesses to relocate, retain, or expand their operations in Maryland. But more importantly, it's to get you protected.
Contact us to help you walk through the rest of the process during or after your registration. If you find that the time frame is tightening, you still have the opportunity to request an amendment. Let us guide you and help you take full advantage of the Maryland Department of Commerce's BMC Tax Credit.
See if you qualify for an amendment to your taxes?