Lawmakers Introduce Legislation to Promote ESOPs

The National Center for Employee Ownership (NCEO) reports that the bill would:  

• allow owners of stock in an S corporation to have the same opportunity as owners of C corporation stock currently have to defer taxation on gains made from the sale to a qualifying Employee Stock Ownership Plans (ESOP)
• permit lenders to S corporations with 50% or more ownership through an ESOP to exclude 50% of the interest from the loan if used to acquire stock for the ESOP
• set up an office in the Department of the Treasury to provide technical assistance to S corporations with ESOPs
• provide that companies that are 50% or more owned by an ESOP that were previously qualified under one of the various Small Business Administration set-aside programs (the most important of these are for minority- and woman-owned companies) to continue to qualify if, after the ESOP gaining 50% or more ownership, the workforce remains substantially the same