8/1/2013 UPDATE: The Iowa legislature recently passed a bill appropriating $500,000 per year to help offset the costs of determining if an ESOP is an appropriate strategy for the business owner, the company and the employees. The fund will be administered by the Iowa Economic Development Authority with the help of local ESOP experts, including service providers and representatives from ESOP companies. For more information about the fund, read this article in the Corridor Business Journal.

6/6/2012 UPDATE: On May 25, 2012, Governor Terry Branstad signed into law a bill that encourages employee ownership by providing a 50% exclusion of the Iowa net capital gains tax from the sale of an Iowa corporation to an ESOP if the ESOP owns at least 30% of the company after the sale. A number of the other provisions were left out of the final bill, including funds to establish a loan program for qualifying ESOPs and technical assistance, marketing, and education on ESOPs.

3/1/2012 UPDATE: The Iowa House of Representatives passed a bill to encourage ESOPs in the state by a vote of 92-3. The proposal, strongly backed by the governor, now moves to the Senate, where approval seems certain. The bill would exempt capital gains from taxation if a company is sold to an ESOP that owns at least 30% of the stock. No mention is made of a requirement that the company be a C corporation. The bill also provides for an appropriation of $1 million to the state economic development authority to establish a loan program for qualifying ESOPs, and to provide technical assistance, marketing, and education on ESOPs.

1/10/2012 ORIGINAL ARTICLE: Today, the Governor of Iowa, Terry Branstad delivered his "Condition of the State Speech." In it, he said, that he would be "proposing legislation that will encourage the formation of Employee Stock Ownership Plans to encourage the sale of these local businesses to the very employees who have made that company a profitable success." The legislation is to address the dilemma that, "When hometown businesses are sold to out of town, out of state, or out of country buyers, the local community often suffers."

Employee stock ownership plans (ESOPs) provide a tax-friendly way for business owners to protect jobs and reward employees while ensuring the integrity of their business. By promoting employee ownership at the state level, Iowa is pioneering a new model for addressing the economic problems our country faces. As the governor said, "Employee ownership is great for the Iowa communities in which these businesses, jobs, and careers exist."

The full speech is available here.


0

Add a comment

Loading