New York Tax Push on Startup Investments Draws Tech Sector’s Ire

A proposal by New York lawmakers to raise taxes on startup investment gains is setting off a fight with the tech industry, which says the move would drive venture capital out of the state.

Under federal tax law, the Qualified Small Business Stock exclusion permits eligible investors to exclude up to 100% of capital gains from the sale of certain company stock up to $15 million. The level was increased from $10 million as part of President Donald Trump’s tax and spending legislation last year.

The New York plan would “decouple” the state from that change and maintain the ...