The Missouri Chamber of Commerce and Industry recently offered testimony to renew legislation that would help companies become employee owned.
Earlier this year, the Missouri Senate voted out SB 247, sponsored by Sen. Justin Brown (R-Rolla), and sent it to the Missouri House. The House has passed HB 356, sponsored by Rep. Mike McGirl (R-Potosi), which includes Rep. Don Mayhew’s (R-Crocker) ESOP language.
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.
“This tax deduction is important to startups and companies in tech innovation that are moving to employee ownership,” Brown told the House Special Committee on Tax Reform. “More and more companies are offering this benefit to employees. I have two ESOP companies in my hometown of Rolla – one is a bank and the other a biotech company.”
“There are less than 100 ESOP companies in Missouri,” Brown added, “but the trend over the last 10 years shows it’s really starting to grow.”
Phillip Arnzen, director of legislative affairs for the Missouri Chamber, also testified in favor of the legislation, saying only a few companies have taken advantage of the tax deduction because it was only in effect for a few years. If the sunset is removed, more companies would take advantage of it.
“We believe that ESOPs are vital to attract new and innovative companies, as well as ensuring that the companies we already have here, stay here,” Arnzen added.
For more information, contact Arnzen at parnzen@mochamber.com or 573-634-3511.
