Starting next year, cybersecurity companies based in Montgomery County will be eligible for a bonus — a local tax credit to go with the state one passed by the General Assembly in the spring.
The Montgomery County Council recently approved legislation that makes companies involved in the growing cybersecurity field that get certified for the state tax credits to be eligible for supplemental local credits.
The program offers cybersecurity businesses not just financial support but provides a “vote of confidence” for those in the industry, said Kwok Li, president and CEO of Bethesda-based cybersecurity business RioRey. The company develops products that defend systems from a type of Internet attack called distributed denial-of-service.
“This segment requires continuous innovation,” Li said. “It requires a full spectrum of employment levels.”
John Prisco, president and CEO of Rockville cybersecurity firm Triumfant, also praised the program. He said he moved his company to Montgomery in 2006 partly to take advantage of the skilled work force in the cybersecurity industry. The business has eight patents on its products, he said.
“The climate is already great, but [this program] really makes it even better,” Prisco said.
The program is modeled on a similar tax credit Montgomery officials passed in 2010 for life sciences businesses. A difference is that cybersecurity companies receive the credit themselves, rather than investors in the companies under the biotech program.
The county also has a tax credit for investors in green businesses that began this year.
Steven A. Silverman, director of the county’s Department of Economic Development, said in a recent council meeting that to his knowledge he did not know of any other local entities with tax credit programs in those three areas.
“We think this sets Montgomery County apart as the place to start and grow businesses in these sectors,” he said.
The exact amount of the supplement will be depend on the number of companies that receive credits and the amount of funds county officials appropriate each year. The state program is capped at a total of $3 million for next year.
Eligible businesses have to be certified by the state as “qualified” Maryland cybersecurity companies, as well as have fewer than 50 employees and be privately held.
The program piggybacks on other measures the county has taken in the field, such as partnering with the National Institute of Standards and Technology to form the National Cybersecurity Center of Excellence. Officials also want to start a business incubator in Montgomery to help grow startups focused on cybersecurity.