Jefferson City, MO. – Governor Mike Parson signed legislation that will help ensure Missouri businesses remain in Missouri. At a ceremonial signing event at the state capitol on Sept. 6, 2023, Gov. Parson signed SB 20, sponsored by Sen. Mike Bernskoetter (R-Jefferson City), which reauthorizes the employee stock ownership plan (ESOP) tax deduction.
The Missouri Chamber of Commerce and Industry strongly supported the extension of this valuable tool that promotes employee ownership and fosters a positive business environment in our state.
“We believe ESOPs are incredibly important, especially when we’re in a global competition for jobs and talent. Employee-owned businesses often exhibit higher levels of employee satisfaction, increased productivity and greater long-term stability. In turn, these companies contribute to the local economy, driving growth and job creation. This ESOP tax deduction plays a crucial role in facilitating the transition to employee ownership, making it more financially viable for businesses.”
Dan mehan, president and ceo of the missouri chamber
In 2016, Missouri lawmakers created a 50 percent income tax deduction on the proceeds business owners receive when they sell their companies to their employees. The incentive was intended to encourage businesses to go the ESOP route versus selling to a competitor or passing the business to out-of-state ownership.
Senate Bill 20 repeals the 2022 sunset of the legislation and extends this successful incentive program. “We have witnessed firsthand the positive impact of employee ownership in Missouri,” Mehan said. “It is our firm belief that extending the ESOP tax deduction found in SB 20 will further encourage and support locally-owned businesses, leading to a stronger and more prosperous economy.”
The signing of SB 20 is a significant step towards promoting employee ownership and fostering a positive business environment in Missouri. With this legislation, Missouri businesses can continue to thrive and contribute to the local economy.