Bill > S398

Introduced Session

This bill allows for a gross income tax exclusion for capital gains from the sale of certain employer securities by qualified businesses that result in the retention of full-time jobs that yield a net positive benefit to the State. The gross income tax exclusion will be contingent upon the qualified business receiving pre-transaction certification from the New Jersey Economic Development Authority, that considering the gross income tax forgone from the exclusion of income, the transaction will result in the retention of full-time jobs in the qualified business in this State and will yield a net positive benefit to the State. The capital gains or income to be excluded must be from the sale of employer securities of a non-publically traded business with fewer than 500 employees, whose headquarters or base of operations is in this State, to an employee stock ownership plan, a New Jersey S corporation owned by an employee stock ownership plan, or an eligible worker-owned cooperative, benefiting employees of the business in this State, if upon completion of the transaction the employee stock ownership plan, New Jersey S corporation owned by an employee stock ownership plan, or eligible worker-owned cooperative plan owns at least 30 percent of all outstanding employer securities issued by the business. The purpose of this bill is to incentivize small businesses to establish employee stock ownership plans. An employee stock ownership plan allows companies to share ownership with employees without requiring employees to invest their own money. In addition, this bill encourages small business owners to sell their businesses to the very employees that contributed to their success and save those jobs in this State. This will help to ensure that local businesses are not sold to out-of-state buyers, which often results in the loss of jobs in this State and can be harmful to the fabric of local communities.

Committee Categories

Gordon Johnson (D)*, 

Introduced in the Senate, Referred to Senate Budget and Appropriations Committee (on 01/11/2022)

Official Document