Senators Benjamin Cardin (D-MD) and Rob Portman (R-OH) re-introduced the Promotion and Expansion of Private Employee Ownership Act (S.1300) on April 22, 2021
The ESOP Association looks forward to a companion bill being introduced in the House of Representatives.
The legislation includes provisions that seek to:
Expand financing opportunities for S Corp ESOPs
Provide technical assistance for companies that may be interested in forming an S Corporation ESOP
Ensure that small businesses adopting ESOPs retain their Small Business Administration 8(a) preference when competing for government contracts at all levels
S. 1300 encourages the establishment of employee stock ownership plans in S corporations, thereby promoting retirement security and employee ownership.
Under current law, the sale of C corporation stock to an ESOP qualifies for a deferral of capital gains, however the sale of S corporation stock to an ESOP does not. The bills would equalize the treatment of S Corp and C Corp stock under IRC Section 1042(c)(1) by extending the deferral to include S Corps; provide technical assistance to ESOPs; clarify that S corporation ESOPs may retain their small business status with the SBA, and take other steps to encourage the creation of ESOPs in S corporations.
The ESOP Association requests that you please consider co-sponsoring the legislation and getting this legislation to a vote after more than a decade in Congress.
For more information:
Senior Director of Public Policy and Communications