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Bill > LD756

ME LD756

ME LD756
An Act Creating and Sustaining Jobs Through the Development of Cooperatives and Employee-owned Businesses by Providing Tax Deductions for Certain Qualified Business Activities

summary

Introduced
02/25/2025
In Committee
02/25/2025
Crossed Over
06/12/2025
Passed
06/12/2025
Dead

Introduced Session

Potential new amendment
132nd Legislature

Bill Summary

This bill does the following to support employee-owned businesses and cooperatives. 1. It excludes from Maine income tax the amount of gain, up to a maximum of $750,000, recognized by a business owner in transferring the business to an employee stock ownership plan, eligible worker-owned cooperative, consumer cooperative or agricultural producer cooperative. 2. It excludes from Maine income tax interest from loans that finance transfers of ownership from a business to an employee stock ownership plan, eligible worker-owned cooperative, consumer cooperative or agricultural producer cooperative and allows financial institutions subject to the franchise tax to subtract from Maine net income an amount equal to the interest received during the taxable year with respect to a qualified business acquisition loan. 3. It requires the Department of Economic and Community Development, Office of Business Development to contract with a nonprofit economic development organization with relevant expertise to develop and manage the Maine Employee Ownership Center to provide information and programs to assist businesses in the transition to employee or cooperative ownership. 4. It specifies performance measures that the Office of Program Evaluation and Government Accountability, the Government Oversight Committee and the joint standing committee of the Legislature having jurisdiction over taxation matters must consider in developing evaluation parameters to perform the review of the deductions provided under this bill as required by the Maine Revised Statutes, Title 3, chapter 37.

AI Summary

This bill creates a comprehensive framework to support employee-owned businesses and cooperatives in Maine by introducing several key tax incentives and establishing a Maine Employee Ownership Center. Specifically, the bill allows business owners to exclude up to $750,000 of capital gains from their state income tax when selling their business to an employee stock ownership plan (ESOP), worker-owned cooperative, consumer cooperative, or agricultural producer cooperative. The bill also provides a tax deduction for interest received on loans that finance such business ownership transfers, and allows financial institutions to subtract this interest from their Maine net income. Additionally, the bill requires the Department of Economic and Community Development to contract with a nonprofit organization to develop the Maine Employee Ownership Center, which will provide educational programs, technical assistance, and resources to help businesses transition to employee or cooperative ownership. The center will also collect data on business conversions, job retention, and economic impacts, and will work with state agencies to evaluate the effectiveness of these tax incentives. These provisions aim to preserve jobs and support business continuity by making it financially easier for business owners to transfer ownership to their employees, with the tax deductions and support services taking effect for taxable years beginning on or after January 1, 2025.

Committee Categories

Budget and Finance

Sponsors (8)

Last Action

CARRIED OVER, in the same posture, to any special or regular session of the 132nd Legislature, pursuant to Joint Order SP 800. (on 06/25/2025)

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