As reported in the January 2013, ESOP Report newsletter, Assemblyman and Deputy Speaker of the New Jersey State Legislature, Upendra J. Chivukula (D), introduced a bill to encourage small businesses to establish ESOPs in December 2012. The bill would provide “…a gross income tax exclusion for certain capital gains from the sale of employer securities to a non-publicly traded business with fewer than 500 employees, whose headquarters or base of operations is in this State, to an employee stock ownership plan, a New Jersey S corporation owned by an employee stock ownership plan…” The bill is very similar to Iowa Governor Terry Brandstad’s ESOP initiative program which passed the Iowa State Legislature in 2012. When additional information about the New Jersey bill becomes available, it will be shared with Association members.
“It’s encouraging to see states considering bills to facilitate ESOP creation,” said ESOP Association President, J. Michael Keeling. “Indiana and Iowa with their respective states’ ESOP Initiatives, and now New Jersey, are leading the way on a state level and clearly see the value employee ownership brings to a company.”