What's happening
This bill exempts 100% of capital gains taxes on sales of New York corporation stock to employee-owned enterprises based in New York.
Why it matters
Encourages employee ownership. By removing capital gains taxes for those selling New York corporate stock to employee-owned enterprises, the bill creates a strong incentive for business owners to transfer ownership to their employees rather than outside buyers or investors.
Targets local economic stability. The exemption only applies if the employee-owned enterprise is domiciled in New York, which supports keeping businesses—and the economic benefits they generate—rooted in the state.
Promotes federally-compliant ESOPs. If the buyer is an Employee Stock Ownership Plan (ESOP), it must meet federal standards, ensuring that only legitimate, regulated employee ownership structures benefit from the tax break.
Potential to preserve jobs and community ties. By making employee buyouts more attractive, the bill could help prevent business closures or relocations after ownership changes, thus protecting local jobs and maintaining community connections.
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Exempt Capital Gains for Employees
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History
- Referred to ways and means
- Referred to ways and means
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Exempt Employee Stock Sale Gains
In Senate Committee · Investigations And Government Operations · Sponsor Kenneth P. LaValle
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
S. 4601 A. 5970
2017-2018 Regular Sessions
SENATE - ASSEMBLY
February 21, 2017
IN SENATE -- Introduced by Sen. LAVALLE -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations
IN ASSEMBLY -- Introduced by M. of A. THIELE -- read once and referred to the Committee on Ways and Means
AN ACT to amend the tax law, in relation to a capital gains exemption from the sale of stock from a New York corporation to an employeeowned enterprise as defined by subdivision five of section eighteen hundred thirty-six-b of the public authorities law
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subsection (c) of section 612 of the tax law is amended by adding a new paragraph 44 to read as follows:
(44) one hundred percent (100%) of the capital gains from the sale of stock from a New York Corporation to an employee-owned enterprise, as defined by subdivision five of section eighteen hundred thirty-six-b of the public authorities law. In order to qualify for such modification as described in this paragraph, such employee-owned enterprise must have its commercial domicile in New York. If the employee-owned enterprise is an "employee stock ownership plan," it must comply with federal requirements as such plan as defined in 26 U.S.C. § 4975(e) (7).
§ 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06766-01-7
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.