Washington, D.C. passes the Promoting Economic Growth and Job Creation Through Technology Act of 2014
Outgoing mayor, Vince Gray of the District of Columbia, signed important legislation before leaving office. By passing Bill 20-0945, the Promoting Economic Growth and Job Creation Through Technology Act of 2014, Mayor Gray hoped to encourage long-term investment in technology companies by way of a lower capital gains tax of three percent.
The legislation requires that the investment be made in D.C.-based qualified high technology companies, that the investor hold the investment for at least 24 continuous months, and that the purchased stock was not publically traded at the time of purchase.
In its coverage of the bill, The Washington Post cited city officials who hoped the tax reduction would motivate wealthy investors to put their money in tech firms, as opposed to investment in the stock market or real estate. Backing from these kinds of investors “can be early stage capital for the companies that will be born and raised and stay in the District.” And the new law offers a sizeable reduction in tax liability because capital gains, currently treated as ordinary income, can be taxed up to 8.95 percent.
Among those cheering Mayor Gray’s move is 1776dc.com, a “platform to reinvent the world by connecting the hottest startups with the resources they need to excel.” The group asserts that encouraging these kinds of investment relationships contributes to a “vibrant atmosphere of entrepreneurship and creativity in the city.”