Employee Ownership Blog

A long-term employee-owner at Web Industries with 20-plus years at the company once told an audience of NCEO conference-goers in Minneapolis that communication and learning at an ESOP company never really ends.

Our friends across the pond have just celebrated their own employee ownership day (EO Day 2021), releasing some very promising facts and figures along with it to highlight the state of employee ownership in the UK.

Colorado has become the first state to pass a law that helps cover some of the costs to convert to employee ownership. On June 23, Governor Polis signed into law H.B. 21-1311, a bill that makes sweeping changes to Colorado tax law, notably a provision to provide $10 million annually in tax credits over the next six years to fund the professional service costs of conversions to employee ownership.

A new study conducted by John Zogby Strategies on behalf of Employee-Owned S Corporations of America (ESCA), Employee Financial Health and Sentiments Amid the Pandemic, provides evidence that employees in S corporation ESOPs suffered fewer financial setbacks compared to a sample of employees at companies without ESOPs. 

Thank you to all of the sponsors, speakers, attendees, and staff who helped make our 2021 annual conference a rousing success! It not only was the largest virtual gathering in NCEO history but with 1,940 attendees was the second-largest event we’ve ever hosted, placing it just behind our last in-person annual conference in Pittsburgh, PA.

The NCEO is excited to announce that the 2021 Fall ESOP Forum will be back in September, this time as a hybrid event! After more than a year of virtual education, the NCEO’s 2021 Forum will take place both onsite and online.

The Senate has now passed the Endless Frontier Act (S. 1260), Senators Bernie Sanders (I-VT) and Jerry Moran (R-KS) proposed an amendment that would have incorporated a version of the WORK Act (the Worker Ownership, Readiness, and Knowledge Act).

On May 5, 2021, the House Ways and Means Committee unanimously passed the SECURE Act 2.0 (H.R. 2954).The bill makes a number of changes to retirement plan law but, unlike the version introduced last year, does not include a provision allowing owners of S corporation ESOPs to get the same Section 1042 tax deferral on the sale of stock to an ESOP trust as owners of C corporation ESOPs can.

In the factsheet Budget 2021-2022: Tax Incentives to Support the Economy (PDF, page 10), released on May 11, the treasury of Australia announced that it would propose reforms to enhance employee ownership. The reforms, if enacted as proposed, would change the time at which taxes are due on income from tax-deferred employee share schemes (ESS), which is currently taxed at the cessation of employment.

Several California Assembly and Senate members have written letters to the leaders of the Assembly Budget Committee urging inclusion of a $36.5 million appropriation to fund a one-time effort to support employee ownership in the state. A major tax bill in Colorado would provide $10 million in tax credits for conversion to employee ownership.

New York has traditionally been a state where it is difficult to operate as a majority ESOP-owned engineering, architectural, landscape architectural, or land survey firm.

The tax provisions of the Biden administration’s American Families Plan would provide a substantial, if unintentional, boost to employee stock ownership plans (ESOPs). The proposal would significantly increase capital gains taxes for wealthy individuals, marginally increase the top individual tax rate, and increase the top marginal corporate tax from 21% to 28%.