| Summary |
Under current law, a qualified business is allowed a tax credit in
the amount of 50% of the costs to convert the qualified business to a form
of employee ownership. The tax credit is capped at $25,000 for
converting a qualified business to a worker-owned cooperative or
employee ownership trust, and capped at $100,000 for converting a
qualified business to an employee stock ownership plan.
The bill:
•
Increases the cap for converting a qualified business to a
worker-owned cooperative or employee ownership trust
from $25,000 to $40,000, and increases the cap for
converting a qualified business to an employee stock
ownership plan from $100,000 to $150,000;
•
Expands the tax credit to include 50% of the costs of a
qualified employee-owned business expanding its
employee ownership by at least 20%, not to exceed
$25,000;
•
Expands the tax credit to include 50% of the costs of a
qualified business converting to or expanding an alternate
equity structure, not to exceed $25,000. An alternate equity
structure is a form of employee ownership where an
employer grants to employees an employee stock
ownership plan, LLC membership, phantom stock, profit
interest, profit sharing, restricted stock, stock appreciation
right, stock option, or synthetic equity.
•
Specifies that a qualified business or qualified
employee-owned business may apply for and claim only
one credit for the conversion or expansion costs per tax
year.
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