What's happening
This bill creates a full state tax deduction for capital gains from selling New York business stock to employee-owned enterprises.
Why it matters
Encourages local business ownership transitions. by giving a significant tax benefit (full capital gains deduction) to owners who sell their New York-based business to employees, making it financially more attractive to transition to employee ownership rather than selling to outside buyers.
Targets enterprises rooted in New York. the deduction only applies if the employee-owned enterprise’s main place of business is in New York, aiming to keep companies, jobs, and economic benefits within the state.
Supports federally regulated employee ownership structures. such as Employee Stock Ownership Plans (ESOPs) that meet federal compliance standards, promoting robust and legally secure forms of employee ownership.
Could impact wealth distribution and job stability. by incentivizing business models that have been linked to increased worker wealth, greater job security, and potentially more resilient local economies.
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Who cares
Headline styles
Cut Taxes on Employee Buyouts
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to budget and revenue
- Returned to senate
- Died in assembly
- Referred to ways and means
- Delivered to assembly
- Passed senateVote 60–2
- Ordered to third reading cal.1533
- Referred to rules
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
6522
2019-2020 Regular Sessions
IN SENATE
June 14, 2019
Introduced by Sen. BAILEY -- read twice and ordered printed, and when printed to be committed to the Committee on Rules
AN ACT to amend the tax law, in relation to creating a tax deduction for certain capital gains
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 of the capital gains from the sale of stock or member interest from a New York corporation or limited liability company to an employee-owned enterprise, as defined in 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 is 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.
LBD13367-01-9
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 creating a tax deduction for certain capital gains
Purpose or general idea of bill
This bill creates a complete capital gains tax exemption for sale of stock to an employee-owned enterprise.
Summary of specific provisions
Section 1 amends the tax law to provide complete capital gains tax exemption for sale of stock to an employee-owned enterprise.
Section 2 is the effective date.
Justification
Employee-owned businesses and worker cooperatives are a vital business sector that employs 13.5 million workers across the country at over 7,000 companies. This legislation would provide a complete capital gains tax exemption for sale of stock to an employee-owned enterprise.
Prior legislative history
New bill.
Fiscal implications for state and local governments
To be determined.
Effective date
Immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.