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SENATE BILL 25
Q3 6lr0255
(PRE–FILED) CF HB 290
By: Chair, Budget and Taxation Committee (By Request – Departmental –
Commerce) and Senators Augustine, Hettleman, King, Lewis Young,
McCray, Rosapepe, and Zucker
Requested: September 30, 2025
Introduced and read first time: January 14, 2026
Assigned to: Budget and Taxation
Committee Report: Favorable with amendments
Senate action: Adopted
Read second time: February 9, 2026
CHAPTER ______
AN ACT concerning 1
Income Tax – Cybersecurity Technology and Service Tax Credit – Alterations 2
FOR the purpose of designating the credit against the State income tax for certain costs 3
incurred to purchase certain cybersecurity technology and services as the Buy 4
Maryland Cybersecurity Tax Credit; stating the purpose of the credit; repealing the 5
authority of the Department of Commerce to establish a certain panel to assist the 6
Department in administering the credit; altering eligibility for the credit; altering 7
the aggregate amount of credits that may be issued for certain cybersecurity 8
purchases; making the credit refundable; repealing a certain requirement that the 9
Secretary award a certain percentage of tax credits to qualified buyers of 10
cybersecurity services; prohibiting the Department from approving the credit after a 11
certain taxable year; and generally relating to the Buy Maryland Cybersecurity Tax 12
Credit. 13
BY repealing and reenacting, with amendments, 14
Article – Tax – General 15
Section 10–733.1 16
Annotated Code of Maryland 17
(2022 Replacement Volume and 2025 Supplement) 18
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 19
That the Laws of Maryland read as follows: 20
2 SENATE BILL 25
Article – Tax – General 1
10–733.1. 2
(a) (1) In this section the following words have the meanings indicated. 3
(2) “Cybersecurity business” means an entity organized for profit that is 4
engaged primarily in the development of innovative and proprietary cybersecurity 5
technology or the provision of cybersecurity service. 6
(3) “Cybersecurity service” means an activity that is associated with a 7
category or subcategory identified under the Framework Core established by the National 8
Institute of Standards and Technology’s Cybersecurity Framework. 9
(4) “Cybersecurity technology” means products or goods intended to detect 10
or prevent activity intended to result in unauthorized access to, exfiltration of, 11
manipulation of, or impairment to the integrity, confidentiality, or availability o f an 12
information system or information stored on or transiting an information system. 13
(5) “Department” means the Department of Commerce. 14
(6) [“Panel” means the panel that the Department may establish under 15
subsection (c) of this section composed of e xperts in the areas of cybersecurity technology 16
and cybersecurity service. 17
(7)] “Qualified buyer” means any entity [that has fewer than 50 employees 18
in the State and] that is required to file an income tax return in the State. 19
[(8)] (7) “Qualified seller” means a cybersecurity business that: 20
(i) has its headquarters and base of operations in the State; 21
(ii) 1. has less than [$5,000,000] $10,000,000 in annual 22
revenue; 23
2. IS OWNED BY AN INDIV IDUAL OR GROUP OF 24
INDIVIDUALS WHO BELONG TO A GROUP THAT HISTORICALLY HAS BEEN DEPRIVED 25
OF ACCESS TO NORMAL ECONOMIC OR FINANCIAL RESOURCES; 26
3. is a [minority–owned, woman–owned,] veteran–owned[,] 27
or service–disabled–veteran–owned business; or 28
[3.] 4. is located in a historically underutili zed business 29
zone designated by the United States Small Business Administration; 30
SENATE BILL 25 3
(iii) 1. owns or has properly licensed any proprietary 1
cybersecurity technology; or 2
2. provides a cybersecurity service; 3
(iv) is in good standing; 4
(v) is current in the payment of all tax obligations to the State or any 5
unit or subdivision of the State; and 6
(vi) is not in default under the terms of any contract with, 7
indebtedness to, or grant from the State or any unit or subdivision of the State. 8
(b) (1) THERE IS A BUY MARYLAND CYBERSECURITY TAX CREDIT 9
ALLOWED UNDER THIS SECTION. 10
(2) THE BUY MARYLAND CYBERSECURITY TAX CREDIT IS INTENDED 11
TO PROMOTE THE CYBER SECURITY INDUSTRY IN THE STATE BY HELPING 12
MARYLAND BUSINESSES A ND NONPROFITS PURCHA SE CYBERSE CURITY 13
TECHNOLOGIES AND SERVICES FROM MARYLAND CYBERSECURITY COMPANIES TO 14
PROTECT BUSINESS AND CUSTOMER INFORMATION. 15
[(1)] (3) Subject to paragraphs [(2) and (3) ] (4) THROUGH (6) of this 16
subsection, a qualified buyer may claim a credit against the State income tax in an amount 17
equal to 50% of the cost incurred during the taxable year to purchase cybersecurity 18
technology or a cybersecurity service from one or more qualified sellers. 19
[(2)] (4) For any taxable year, the credit allowed under this section may 20
not exceed $50,000 for each qualified buyer. 21
(5) IF THE CREDIT ALLOWED UNDER THIS SECTION IN ANY TAXABLE 22
YEAR EXCEEDS THE STATE INCOME TAX FOR THAT TAXABLE YEAR , A QUALIFIED 23
BUYER MAY CLAIM A REFUND IN THE AMOUNT OF THE EXCESS. 24
[(3)] (6) For any taxable year, the aggregate credits claimed for 25
cybersecurity technology or cybersecurity service purchased from a single qualified seller 26
may not exceed [$200,000] $1,000,000. 27
(c) [(1) The Department, in consultation with the Maryland Technology 28
Development Corporation, may establish a panel composed of experts in the areas of 29
cybersecurity technology and cybersecurity service. 30
(2) The Department may establish the panel under service contracts with 31
independent reviewers. 32
4 SENATE BILL 25
(3) The panel shall assist the Department in its determination as to 1
whether a company is a qualified seller. 2
(4) A member of the panel is not eligible to receive any benefit, direct or 3
indirect, from the tax credit under this section. 4
(5) (i) Except as provided in subparagraph (ii) of this paragraph, 5
Division II of the State Finance and Procurement Article does not apply to a service that 6
the Department obtains under this section. 7
(ii) The Department is subject to Title 12, Subtitle 4 of the State 8
Finance and Procurement Article for services the Department obtains under this section.] 9
[(d)] (1) (i) A qualified buyer eligible for the credit under this section may 10
apply to the Department for a credit certificate that states the amount of the credit the 11
qualified buyer may claim under subsection (b) of this section. 12
(ii) A qualified buyer shall attach the credit certificate to the income 13
tax return on which the qualified buyer claims the credit under subsection (b) of this 14
section. 15
(2) Subject to paragraph (3) of this subsection, the Secretary of Commerce 16
shall approve each application under paragraph (1) of this subsection that qualifies for a 17
credit certificate. 18
(3) [(i)] The total amount of the credit certificates approved by the 19
Secretary of Commerce under this subsection may not exceed: 20
[1.] (I) for taxable year 2018, $2,000,000; and 21
[2.] (II) for taxable year 2019 and each taxable year 22
thereafter, $4,000,000. 23
[(ii) For each taxable year, the Secretary of Commerce shall award 24
25% of the a mount of tax credits authorized under subparagraph (i) of this paragraph to 25
qualified buyers that purchase cybersecurity services.] 26
[(e)] (D) (1) The Department may revoke its certification of a credit under 27
this section if any representation made in connection with the application for the 28
certification is determined by the Department to have been false. 29
(2) The revocation may be in full or in part as the Department may 30
determine and, subject to paragraph (3) of this subsection, shall be communicate d to the 31
qualified buyer and the Comptroller. 32
SENATE BILL 25 5
(3) The qualified buyer shall have an opportunity to appeal any revocation 1
to the Department before notification of the Comptroller. 2
(4) The Comptroller may make an assessment against the qualified buyer 3
to recapture any amount of tax credit that the qualified buyer has already claimed. 4
[(f)] (E) In accordance with § 2.5–109 of the Economic Development Article, the 5
Department shall submit a report on the credit certificates awarded under this section for 6
the calendar year. 7
[(g)] (F) The Department and the Comptroller jointly shall adopt regulations to 8
carry out this section and to specify criteria and procedures for application for, approval of, 9
and monitoring continuing eligibility for the tax credit under this section. 10
(G) THE DEPARTMENT MAY NOT APPROVE A CREDIT UNDER THIS SECTION 11
FOR A TAXABLE YEAR BEGINNING AFTER DECEMBER 31, 2030. 12
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 13
1, 2026, and shall be applicable to all taxable years beginning after December 31, 2025. 14
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.