The state of New Jersey has joined several other states in encouraging the creation of ESOPs. Recently, the New Jersey State Senate advanced bill S. 945, which provides for gross income tax exclusion for capital gains from the sale of certain employer securities, if at least 30% of the company is sold to the employees. The bill was introduced in January 2014 by New Jersey State Senator Donald Norcross (D-5th District).
This new bill is very similar to one introduced in December 2012 by New Jersey Deputy Speaker of the State Assemblyman, Upendra J. Chivukula (D-17th District) to help motivate small businesses, with 500 or fewer employees, to create ESOPs.
“It’s encouraging to see states introducing bills to encourage ESOP creation,” said ESOP Association President, J. Michael Keeling. “Clearly more state officers are seeing the benefits that employee-owned companies bring to the local economy.”
Similar legislation was also introduced in Missouri earlier this year. In 2012, Iowa’s Governor, Terry Branstad, signed into law an ESOP Initiative, and in addition to the Iowa law encouraging ESOP creation, Iowa’s Economic Development Authority has also put together a new ESOP initiative program to assist companies interested in creating an ESOP.