WASHINGTON, DC—Mayor Vincent C. Gray hasproposed a bill entitled “Promoting Economic Growth and JobCreation Through Technology Act of 2014” that would establish alower capital gains tax rate at 3% for long-term investments inQualified High Technology Companies.

“Now, more than ever, it is important to diversify theDistrict's economy and create more jobs. I previously introducedthis capital-gains legislation in the 'Technology SectorEnhancement Act of 2012,' but it was removed before the Councilapproved the legislation,” says Mayor Gray. “I am reintroducingthis provision because I believe it is essential that we help ourstartups and do everything we can to encourage the creation,expansion and retention of these home-grown businesses and goodjobs for District residents.”

The proposed tax-rate benefit would apply only to thoseinvestments in a QHTC. The 3% tax rate will help to create greateraccess to capital for local technology businesses and encourageemployees and investors to remain in the District even whenpreparing for an IPO or other financial transaction, the mayorstated. A lower tax rate would also incentivize District investorsto diversify their portfolios by placing capital in technologystartups, an opportunity they would not have considered without thetax rate incentive.