(a) (1) In this section the following words have the meanings indicated.
(2) "Costs" means the costs to an individual or corporation for:
(i) security clearance administrative expenses incurred with
regard to an employee in the State including, but not limited to:
1. processing application requests for clearances for
employees in the State;
2. maintaining, upgrading, or installing computer
systems in the State required to obtain federal security clearances; and
3. training employees in the State to administer the
application process; and
(ii) construction and equipment costs incurred to construct or
renovate a sensitive compartmented information facility ("SCIF") located in the State
as required by the federal government.
(3) "Department" means the Department of Commerce.
(4) "Secretary" means the Secretary of Commerce.
(5) "Small business" has the meaning stated in § 7-218 of this article.
(b) (1) Subject to the limitations of this section, for a taxable year
beginning after December 31, 2022, but before January 1, 2028, an individual or a
corporation that employs not more than 500 employees may claim credits against the
State income tax for:
(i) security clearance administrative expenses, not to exceed
$200,000;
(ii) expenses incurred for rental payments owed during the
first year of a rental agreement for spaces leased in the State if the individual or
corporation is a small business that performs security-based contracting, not to
exceed $200,000; and
(iii) subject to paragraph (2) of this subsection, construction
and equipment costs incurred to construct or renovate a single SCIF in an amount
equal to the lesser of 50% of the costs or $200,000.
(2) The total amount of construction and equipment costs incurred to
construct or renovate multiple SCIFs for which an individual or a corporation is
eligible to claim as a credit against the State income tax is $500,000.
(c) (1) By September 15 of the calendar year following the end of the
taxable year in which the costs were incurred, an individual or a corporation shall
submit an application to the Department for the credits allowed under subsection (b)
of this section.
(2) (i) The total amount of credits approved by the Department
under subsection (b) of this section may not exceed $2,000,000 for any calendar year.
(ii) If the total amount of credits applied for by all individuals
and corporations under subsection (b) of this section exceeds the maximum specified
under subparagraph (i) of this paragraph, the Department shall approve a credit
under subsection (b) of this section for each applicant in an amount equal to the
product of multiplying the credit applied for by the applicant times a fraction:
1. the numerator of which is the maximum specified
under subparagraph (i) of this paragraph; and
2. the denominator of which is the total of all credits
applied for by all applicants under subsection (b) of this section in the calendar year.
(3) By December 15 of the calendar year following the end of the
taxable year in which the costs were incurred, the Department shall certify to the
individual or corporation the amount of tax credits approved by the Department for
the individual or corporation under this section.
(4) To claim the approved credits allowed under this section, an
individual or a corporation shall:
(i) 1. file an amended income tax return for the taxable
year in which the costs were incurred; and
2. attach a copy of the Department's certification of the
approved credit amount to the amended income tax return; or
(ii) subject to subsection (d) of this section, attach a copy of the
Department's certification of the approved credit amount to an income tax return
filed for any taxable year after the taxable year in which the costs were incurred.
(d) If the credit allowed for any taxable year under this section exceeds the
total tax otherwise due, an individual or corporation may apply the excess as a credit
against the State income tax for succeeding taxable years until the full amount of the
excess is used.
(e) The Department, in consultation with the Comptroller, shall adopt
regulations to carry out the provisions of this section.
(f) In accordance with § 2.5-109 of the Economic Development Article, the
Department shall submit a report on the number of credits certified in the previous
calendar year.‹ Prev All Maryland sections Next ›
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