WASHINGTON, DC—Mayor Vincent C. Gray has proposed a bill entitled “Promoting Economic Growth and Job Creation Through Technology Act of 2014” that would establish a lower capital gains tax rate at 3% for long-term investments in Qualified High Technology Companies.

“Now, more than ever, it is important to diversify the District's economy and create more jobs. I previously introduced this capital-gains legislation in the 'Technology Sector Enhancement Act of 2012,' but it was removed before the Council approved the legislation,” says Mayor Gray. “I am reintroducing this provision because I believe it is essential that we help our startups and do everything we can to encourage the creation, expansion and retention of these home-grown businesses and good jobs for District residents.”

The proposed tax-rate benefit would apply only to those investments in a QHTC. The 3% tax rate will help to create greater access to capital for local technology businesses and encourage employees and investors to remain in the District even when preparing for an IPO or other financial transaction, the mayor stated. A lower tax rate would also incentivize District investors to diversify their portfolios by placing capital in technology startups, an opportunity they would not have considered without the tax rate incentive.