D.C. Mayor Vincent Gray wants to grow the city's fledgling tech industry by giving tax breaks to those who use their personal funds to invest in a startup. The mayor announced on Thursday that he plans to introduce legislation in April that would exempt the money these investors use for startup investments from the city's income tax. Instead, that investment would be taxed at the 3 percent capital-gains rate.
“I am proud to announce that, through the D.C. Tech Incentives Program, residents who invest in our technology companies will be rewarded with a minimal tax burden when those businesses succeed,” Gray said in a statement. “The tech sector is playing a key role in the economic future of the District."
Gray made the announcement at LearnZillion, a tech and education startup company. The program also expands the tax incentives program for tech businesses located in 'technology development zones' to all qualifying District technology businesses no matter where they are located.
The D.C. Tech Incentives Program attracts technology businesses to the District and incentivizes locally owned technology businesses to grow in the District, according to the office of the mayor. To qualify for incentives, businesses must be located in the District, employ at least two individuals and derive a majority of their revenue from qualifying high-tech activities. Incentives include relocation-expense offsets and modifications to various tax rates.