Maine is well known for its many small businesses. They make up the backbone of our economy and our communities, and employee-owned businesses are no exception.
In employee-owned businesses or cooperatives (co-ops), its the workers who own all, or the majority, of the company. For workers and business owners both, this can be a great way to encourage innovation, incentive, and pride in the work you do – because you are working for yourself.
Now, a new bill written by Sen. Reny aims to help encourage and aid businesses looking to move toward some form of employee ownership.
LD 1276 would do the following:
Exclude the amount of gain recognized by a business owner in transferring the business to an employee stock ownership plan, eligible worker-owned cooperative, consumer cooperative, affordable housing cooperative, or agriculture producer cooperative from Maine’s income tax, up to $750,000. It would also exclude the interest from loans that finance transfers of ownership.
Create the Maine Employee Ownership Center, which will provide information and programs to assist businesses in the transition to employee or cooperative ownership. The Department of Economic and Community Development and Office of Business Development will work with a nonprofit development organization with relevant expertise to help develop and manage this center.
The Office of Program Evaluation and Government Accountability and the Government Oversight Committee and the joint standing committee of the Legislature having jurisdiction over taxation matters will create performance parameters in order to qualify for these exemptions. They can include, the number of qualifying business ownership conversions to employee or cooperative ownership; The number of full-time equivalent jobs retained and units of affordable housing created or retained; the number of housing units converted to cooperative housing; and more.
This bill is a great tool to help businesses make the switch to employee ownership. Employee ownership is good for businesses, good for workers, and good for our communities. We urge the Legislature to pass this bill!