What's happening
This bill exempts 100% of capital gains tax on sales of New York corporation stock to qualified employee-owned enterprises.
Why it matters
Encourages Employee Ownership. By providing a tax break on capital gains for selling stock to employee-owned enterprises, this bill incentivizes business owners to transition ownership to their workers, potentially increasing the number of employee-owned companies in New York.
Promotes Local Economic Stability. Requiring that the employee-owned enterprise have its commercial domicile in New York means that the benefits (such as job retention, local investment, and economic empowerment) are targeted to the state, helping to anchor businesses and jobs locally.
Supports Federally Compliant ESOPs. The bill specifically includes employee stock ownership plans (ESOPs) that meet federal standards, ensuring that only established, regulated forms of employee ownership benefit, which may reduce risk of abuse and encourage best practices in employee ownership transitions.
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Exempt Employee Stock Sale Gains
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to investigations and government operations
- Referred to investigations and government operations
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 Capital Gains for Employees
In Assembly Committee · Ways And Means · Sponsor Fred Thiele
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.
Sponsor's memo
Title of bill
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 employee-owned enterprise as defined by subdivision five of section eighteen hundred thirty-six-b of the public authorities law
Purpose
Qualifies employee-owned enterprises whose commercial domicile is in New York to a 100% exemption from capital gains from the sale of stock from a New York corporation to such employee-owned enterprise.
Summary of provisions
Subsection (c) of Section 612 of the Tax Law is amended by adding a new paragraph 44 relating to modifications to the adjusted gross income of a resident individual. Provides that 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).
Justification
The purpose of this legislation is to promote the creation of worker cooperatives to help support a vibrant Main Street in our communities by qualifying employee-owned enterprises whose commercial domicile is in New York to a 100% exemption from capital gains from the sale of stock from a New York corporation to such employee-owned enterprise.
Legislative history
2017: New Legislation
Fiscal implications
To be determined.
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.