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HB 1321

Income Tax - Credit for Cybersecurity Measures Undertaken by Small Businesses

2025 Regular Session Introduced by Jason Buckel and 10 co-sponsors

Maryland tax credit rewards small businesses implementing cybersecurity measures, reducing barriers to cyber defense adoption while lowering state tax revenue.

Hearing 2/20 at 1:00 p.m.
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WeVote Research Nonpartisan
Bill Summary · HB 1321

Legislative bill overview

HB 1321 establishes an income tax credit for small businesses in Maryland that implement cybersecurity measures to protect their operations and customer data. The credit would reduce the state income tax liability of eligible small businesses that invest in approved cybersecurity infrastructure, software, training, or professional services. The bill incentivizes proactive cyber defense adoption among businesses that typically lack dedicated IT security resources.

Why is this important

Small businesses are increasingly targeted by cyberattacks and ransomware, yet many lack the capital or expertise to implement robust security measures. This tax credit could lower barriers to cybersecurity adoption, reducing data breaches that harm both businesses and consumers. It also reflects Maryland's interest in strengthening its economic ecosystem by supporting small business resilience without direct government spending—using foregone tax revenue instead.

Potential points of contention

  • Definition ambiguity: The bill's effectiveness depends on which cybersecurity measures qualify for the credit; overly broad definitions could reward minimal efforts, while overly narrow ones limit participation
  • Cost to state revenue: Fiscal impact is unclear; the credit could represent significant foregone tax revenue if adoption is widespread, affecting budget allocations elsewhere
  • Equity concerns: Businesses with accounting expertise and capital to invest upfront may benefit disproportionately, potentially widening the security gap between well-resourced and under-resourced small businesses

Compiled from official sources — confirm details with the bill’s official record.

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