The sponsor of a vetoed bill that would give Missouri businesses a tax break for shifting to an employee ownership program says he’ll pursue an override of the veto.
The bill would give companies a break on 50-percent of the tax on capital gains resulting from the sale of shares to employees if they switch to an employee stop option program (ESOP).
Governor Jay Nixon (D) said in his veto of HB 2030 that it would cost the state too much – up to $10.3-million dollars – without creating any jobs.
“There’s a whole lot of tax breaks for employee-owned businesses right now. Adding another state one costing us $10-million dollars, I didn’t think it would affect the behavior of folks to get into that enterprise,” said Nixon, who said tax breaks for switching to employee ownership already exist.
Bill sponsor, Representative Denny Hoskins (R-Warrensburg), said the bill would give more employees a chance at what he calls the American dream: to have ownership in a company.
“It works similar to a 401K. Whether you’re just starting with the company of you’ve been with the company 30 years and you’re a senior vice president, everybody is a part owner in the company,” said Hoskins.
Hoskins argues the incentive the bill would create would give companies considering changing ownership another reason to stay in Missouri.
“The last thing we want is an out-of-state or out-of-country company coming in, buying 100-percent of the company, and then moving it out-of-state or out-of-country,” said Hoskins.
Hoskins disagrees with the projected cost to the state of the bill, saying it was based on a prediction that every company in the state would adopt an ESOP.
The bill passed the legislature with bipartisan support, with enough votes to overturn the veto in September if enough lawmakers continue to support it.