Employee-Owned Business Office & Income Tax Credit

The act creates the employee ownership office (office), which was originally created administratively by the governor in 2020 as a statutory entity within the office of economic development (OED). The act also creates a refundable income tax credit for income tax years 2025 to 2029 for up to 50% of specified costs incurred by new employee-owned businesses, not to exceed $50,000. New employee-owned businesses are defined as businesses that have been employee-owned for 7 or fewer years. The tax credit is administered by the office, which may allocate up to $1.5 million in tax credits per year. The office is required to include information on the effectiveness of the tax credit in OED's annual report to the general assembly. The act also creates the employee ownership cash fund, which is to be used by the office for the administration of the tax credit and consists of fees collected from applications for the tax credit. The tax credit and cash fund are repealed on January 1, 2035. For the 2024-25 state fiscal year, $145,847 is appropriated from the general fund to the office of the governor for use for the employee ownership office. APPROVED by Governor June 4, 2024 EFFECTIVE August 7, 2024(Note: This summary applies to this bill as enacted.)