Making Iowa more friendly for employee-owned businesses

Making employee-owned businesses at home in Iowa is the goal of a new bill approved by the Senate Economic Growth Committee.

The bill, Senate Study Bill 3014, provides incentives for businesses to develop their own Employee Stock Ownership Plans. These plans are qualified retirement plans for employees under the Internal Revenue Code.

Encouraging employee stock ownership can help keep businesses in Iowa communities. Business owners who may wish to retire or move on to a new line of work can more easily sell their business to employees rather than an out-of-state buyer. Everybody wins because the business, the employees and the wealth stay in the local community.

The new legislation establishes a loan/forgivable loan program to help businesses determine whether or not forming an Employee Stock Ownership Plan is feasible for them. The bill also provides for a capital gains tax deduction.

The bill will next be reviewed by the Senate Ways & Means Committee and the Senate Appropriations Committee.