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Employee Ownership Blog

Corey Rosen

Connecticut Bill Would Give Tax Incentive to Large Companies to Share Ownership

SB 1239, An Act Concerning Certain Employee Stock Ownership Plans, would allow Connecticut companies to avoid a state corporate tax surcharge if they provide at least 80% of their employees with at least 300 shares apiece for each year the surcharge applies. The state surcharge equals 10% of taxes paid and applies to companies with $100 million or more in income or companies that are part of a combined group of companies that file a unitary income tax return, regardless of income.

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Lindsay Isaac

Announcing “The Download,” a Monthly ESOP Communication Resource

ESOP companies are often on the lookout for good communication and education resources to support their efforts around employee onboarding and training, specifically ESOP literacy, ownership culture, and countless other issues. This is why we are thrilled to launch a new member benefit this week—The Download, an email newsletter featuring a new solutions-focused resource every month. The resources are designed with the end user in mind—your employee-owners—to be shared as-is or with minimal adaptation to incorporate the specifics of your plan.

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Jaymie Oviedo

Touchdown for Employee Ownership

One month ago, 1,650 employee-owners and 50 considering employee ownership for their business all descended on Kansas City, Missouri, for the 41st NCEO Annual Conference. We welcomed 880+ first-time attendees to the event. We also saw 130 members join us online.

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Corey Rosen

Employee Equity Investment Act Introduced in Both Houses with Bipartisan Support

Senators Chris Van Hollen (D-MD) and Marco Rubio (R-FL), along with Representatives Dean Phillips (D-MN) and Blake Moore (R-UT), have introduced the Employee Equity Investment Act (EEIA). The bill would create an investment facility within the Small Business Administration's (SBA's) Small Business Investment Company (SBIC) program to provide loan guarantees for investment funds devoted to expanding employee ownership.

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Corey Rosen

SBA Adopts New Guidance Making Loans to ESOPs Much Easier

The Small Business Administration (SBA) has taken steps to make loans to ESOPs much easier than under prior rules. The agency had received considerable criticism for issuing requirements for ESOP loans inconsistent with the language and intention of the Main Street Employee Ownership Act (MSEOA). That law was passed in 2018 to remove numerous barriers that made SBA loans or loan guarantees for ESOP acquisitions impractical. The law was also designed to allow ESOPs to qualify for loans under the SBA’s 7(a) program, which allows qualified lenders to process loan applications that can receive SBA guarantees. The loans can be for up to $5 million.

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Corey Rosen

Texas House Passes Employee Ownership Bill

The Texas House of Representatives has passed HB 2389, “An Act relating to companies in which employees have ownership interests through employee stock ownership plans.” It will now head to the Senate, where, as SB 1233, it has already passed the International Affairs and Economic Development Committee by a vote of 8-0. The bill would:

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Corey Rosen

Colorado Expands Tax Credit for Employee Ownership Conversions

The Colorado legislature has passed (by margins of 54-2 in the House and 26-9 in the Senate) a bill (HB23-1081) to expand its tax credits for converting to employee ownership. Governor Jared Polis has strongly supported the legislation and is expected to sign it. Under prior law, companies converting to ESOP ownership could get a tax credit for up to 50% of costs for conversion, with a maximum credit of $100,000 for conversion expenses; the dollar limit is now increased to $150,000. For worker cooperatives, prior law provided a credit of up to 50% of conversion costs, with a maximum credit of $25,000; the dollar limit is now increased to $40,000. Conversions to other qualified forms of employee ownership now also qualify for a credit of up 50% of the costs, up to a maximum credit of $25,000. Finally, the bill provides a tax credit of 50% of the costs, up to a maximum credit of $25,000, for a qualified employee-owned business expanding its employee ownership by at least 20%.

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