The Missouri Chamber and some of its members are among those urging Governor Jay Nixon (D) to sign into law a tax break for business owners who sell their a company to its employees.
Representative Denny Hoskins sponsored HB 2030, a proposed capital gains tax break for business owners who sell a company to its employees. (photo courtesy; Tim Bommel, Missouri House Communications)
It would allow a 50-percent break in the capital gains tax for the sale of stock to an employee stock option program (ESOP) if it owns at least 30-percent of the company.
Tony Kempf with Garney Construction in Kansas City says his company has had an ESOP for 30 years, and it has given his employees more security.
“We’ve got secretaries, hourly craft workers, administrative staff, officer team staff, all retiring with great, secure retirements that they don’t necessarily have to count on the social security side of things if it’s not there for ’em,” said Kempf.
Chamber President Dan Mehan said the law could keep companies from leaving Missouri.
“The deduction allowed would create an incentive to sell their companies in Missouri to their employees as opposed to running the risk of, as a lot of baby boomers are these days, moving out of the business and offering it up on the auction block for anyone outside of the state or even outside of the country,” said Mehan.
Bill sponsor Representative Denny Hoskins (R-Warrensburg) said for employees to have ownership gives them more pride in their work.
“Study after study shows that as an employee when you are a part owner in the business that you are working for, your productivity increases, your sense of pride in workmanship increases,” said Hoskins.
The bill’s Senate handler, Senator Ryan Silvey (R-Kansas City) said the bill was one of the few that passed this session that could help keep jobs in Missouri.
“It’s just a simple matter of it being an incentive. When you see something that works you want to encourage other companies to follow the same path rather than sell out to a foreign company or move out of state.”
The bill had broad bipartisan support, but some Democrats opposed because it is projected to take away more than $10-million in state tax revenue, that they said could go to schools and other state-backed programs.
Governor Nixon could sign the bill, veto it, or allow it to become law without his action. If he vetoes it, the votes in both chambers were such that unless some lawmakers switched to “no” votes, supporters could override his veto.
