There is overwhelming evidence that ESOP Companies are more productive, more profitable and more sustainable by providing locally controlled Jobs. The Pro-Private ESOP Company Tax Bill introduced in House and Senate would expand the availability of ESOPs in S Corporations.
Pro-ESOP Bill, S. 1212, Introduced in Senate; May 2015 and
Pro-ESOP Bill, H.R. 2096, Introduced in House; April 2015 will:
- Permit owners of S stock to sell the stock to an ESOP and defer the capital gains tax on his/her gain if the proceeds are reinvested in the equities of U.S. Operating corporations as owners of C corporations stock have done under IRS 1042 since 1984.
- Establish an office in the Department of Treasury to provide technical assistance to S corporations with ESOPs.
- Provide that a small business (S or C) eligible for one of the many programs provided by the Small Business Administration to remain eligible for SBA programs if the company becomes owned 50% or more by an ESOP, and the workforce remains the same or nearly the same as before the establishment of the 50% ownership by employees through the ESOP.
Watkins Ross encourages ESOP advocates to promote private company ESOPs by providing their own company story to its member of Congress. SPEAK UP – Push for Representatives and Senators to co-sponsor H.R.2096 and S.1212, respectively.
ESOPs are in the law and Congress can take them away. It is important to keep advocating laws that encourage the creation and operation of ESOPs so that ESOP Companies and their engaged and committed employee owners may continue to realize the benefits of employee ownership.
The ESOP Association Spring 2015 Advocacy Kit is available at www.esopassociation.org.