The DC qualified high-technology company program: Recent developments
Credits & Incentives talk with Deloitte
“Credits & Incentives talk with Deloitte,” is a monthly column by Kevin Potter of Deloitte Tax LLP, featured in the Journal of Multistate Taxation and Incentives, a Thomson Reuters publication. The August 2017 edition, co-authored with Scott Frishman and Jennifer Alban-Bond, provides an overview of the tax credits and exemptions available to a Qualified High-Technology Company (QHTC).
Self driving cars, drones, 3D printers, virtual reality, artificial intelligence. Not only have they been subjects of science fiction movies throughout the years, these technological advancements are now a part of our daily lives. We are surrounded by technology that manages our homes, schools, and businesses. While technology has become an integral facet of our daily lives, it is also an ever-evolving area bringing with it new implications, new breakthroughs, and even the opportunity for new tax incentives.
While 20 years ago, few could have imagined the scale and scope of technology advancements that exist today, the District of Columbia recognized the potential in technology from an economic development perspective as a significant source of economic growth and job creation.
In 2001, the District City Council enacted the "New E-Conomy Transformation Act of 2000."1 The Committee on Finance and Revenue report stated that "the 'New E-Conomy Transformation Act of 2000' had its genesis with a local group of technology experts brought together . . . with the goal of identifying barriers to entry and expansion of technology companies in the District of Columbia."2
At its inception, the goal of the legislation was to attract and retain high-technology companies in the District, thus creating technology-focused jobs. The legislation created a series of tax credits and exemptions available to a QHTC.
The tax benefits afforded to a company under the QHTC program have generally remained unchanged throughout the years, though the "how "and "what" that qualifies for tax benefits as "High Tech" under the QHTC program have evolved over the last five years. Therefore, it's worth looking at the QHTC program provisions with a fresh perspective.
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1 A13-0543 (B13-0752) (effective Apr. 3, 2001).
2 The Committee on Finance and Revenue Report on Bill 13-752, "New E-Conomy Transaction Act of 2000" (Oct. 19, 2000).