The Missouri Chamber of Commerce and Industry is urging lawmakers to renew legislation that helps companies become employee-owned.
This week, the Senate Economic Development and Tax Policy Committee heard testimony on SB 247, sponsored by Sen. Justin Brown (R-Rolla). A companion bill, HB 512, is sponsored by Rep. Don Mayhew (R-Crocker). It was heard in the House Ways and Means Committee.
“This tax deduction is important to startups and companies in tech innovation that are moving to employee ownership,” Brown said. “More and more companies are offering this benefit to employees. Therefore, having the tax deduction reauthorized helps more companies in Missouri form ESOPs and stay competitive in attracting talent.”
In 2016, Missouri lawmakers created a new 50 percent income tax deduction on the proceeds business owners receive when they sell their companies to their employees. The incentive was intended to encourage businesses to go the Employee Stock Ownership Plan (ESOP) route versus selling to a competitor or passing the business to out-of-state ownership.
The current law sunset at the end of 2022. Both Sen. Brown’s bill and Rep. Mayhew’s bill would repeal that sunset and extend the successful incentive program.
Trevor Monnig, president of the Heart of America Chapter of The ESOP Association and former CFO at PFSbrands, testified in support of the legislation.
“The ESOP provides an additional retirement plan at no cost to the employees, which builds retirement wealth for them, specifically, retirement wealth that is associated with the company they work for, that they can actually impact the financial performance of those companies,” Monnig said. “The capital model also allows for significant growth. In my experience at PFSbrands, we were about 100 employee owners at the time of the transaction in 2017. We’re now more than 200 employee owners there, so we’ve created over 100 jobs since the transaction.”
Since 2016, the incentive has also helped businesses like Brewer Science, which is celebrating its third year as an ESOP company.
“This very much fits within our culture and supports the overall sustainability plan for keeping the jobs and keeping the company located and growing in Rolla, Missouri,” said Doyle Edwards, director of government programs at Brewer Science.
Phillip Arnzen, director of legislative affairs for the Missouri Chamber, also testified in favor of the bills, citing the incentive’s positive impact on Missouri’s workforce.
“We believe that ESOPs are incredibly important, especially when we’re in a global competition for jobs,” Arnzen said. “We believe it’s vital to make sure that we have every tool that we can to attract and retain employees.”
For more information, contact Arnzen at firstname.lastname@example.org or 573-634-3511.