Cybersecurity businessStates eager to attract cybersecurity companies
As the threat of cyberattacks grows, Maryland, Washington D.C., and Virginia want to cash in on the growing business of cybersecurity. Analysts say that several states are using tax breaks to get in on the $207 billion cybersecurity industry, which is expected to show “impressive growth” in the next five years.
As the threat of cyberattacks grows, Maryland, Washington D.C., and Virginia want to cash in on the growing business of cybersecurity.
Analysts say that several states are using tax breaks to get in on the $207 billion cybersecurity industry, which, according to Entrepreneur.com, is expected to show “impressive growth” in the next five years.
The Valley News reports that the state of Maryland has rounded up $3 million in tax breaks to be distributed among cybersecurity startups currently located in the state, or which are willing to relocate to the state.
“It’s the new global threat, not only to our state and nation, but to the whole world,” Mark Vulcan, program manager at the Maryland Department of Business and Economic Development told the Valley News.
Vulcan added that the money from the tax break goes directly to the company, unlike what they do in other states.
Michael Colavito, state and local tax expert at Aronson LLC, saidthat although the companies get a tax break in Maryland, the state will still benefit if a company is successful because it will have to pay taxes to the state, but the break is a “refundable credit” so even if the company does not make a dime, it still applies.
Consultant Javier Siervo, with the Berkeley Research Group LLC, said Washington D.C. offers additional incentives to companies which are set up in the district and “derive most of their revenue from technology-related activities.”
Colavito said the reason tech companies should gravitate to the nation’s capital is that many government contractors call the Washington area home. He believes security needs to be taken seriously “because of all the hackers out there.”
Virginia has increased technology zones in order to encourage tech companies to set up their offices in the state, and started a statewide program that will offer tax exemptions to tech companies, including cybersecurity companies and other high-tech ventures.
According to Cameron Kilberg, the state’s assistant secretary of technology, the program began in 2010 and will continue through 2015.
While the incentives could lead to cybersecurity companies being started, the return on investment is not guaranteed. The cybersecurity field is not going to diminish anytime soon, so there are sure to be some companies that will benefit from the breaks and some states that will benefit from new jobs.
