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Commerce seeks changes to cybersecurity tax credit to boost participation

Ways and Means Committee · March 25, 2026

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Summary

Deputy Secretary April Dawson and Commerce staff told the committee SB 25 would revise the Bay Maryland Cybersecurity Tax Credit to broaden eligible buyers and sellers, raise certain caps, and improve utilization; members asked whether larger firms could crowd out smaller businesses.

April Dawson, deputy secretary for policy and stakeholder engagement at the Maryland Department of Commerce, and Abigail McKnight, program manager for tax credit programs, presented SB 25 on March 24 as a departmental bill designed to increase utilization of the Bay Maryland Cybersecurity Tax Credit.

Dawson said the credit encourages Maryland businesses to buy cybersecurity products and services from in-state sellers and that the bill’s adjustments aim to remove structural barriers to participation. "This is a departmental bill, which would make the program more effective and increase utilization," she said.

Committee members probed several substantive changes. Delia Young asked why the definition of a "qualified seller" was broadened from minority- and women-owned firms to a more general category described as entities "belong[ing] to a group that has historically been deprived of access to normal economic or financial resources." The deputy secretary said she would follow up with the rationale. Members also pressed the employee-size threshold and seller caps: Commerce staff confirmed the proposal removes the prior 50-employee limit and sets a threshold aligned around 100 employees to widen the pool of buyers; staff also said they want to raise per-seller credit availability (examples discussed included raising the seller cap from $200,000 up to requests as high as $1,000,000 so a seller could receive up to $500,000 in credits if awarded on a $1,000,000 application).

Abigail McKnight said the program has been underutilized and that raising thresholds and adjusting caps is intended to make it easier for both sellers and buyers to participate. Delegates expressed concern that larger sellers or buyers could crowd out smaller firms, and several asked Commerce to clarify equity protections and how the agency will assess cumulative effects. Commerce agreed to provide follow-up materials.