Colorado has taken a step forward to support employee-owned companies with a new law that could keep your favorite local spots in business while bolstering the financial security of their workers. The legislation, originally introduced by Senator Jeff Bridges and Representative William Lindstedt, offers tax breaks designed to encourage more businesses to transition to an employee-owned model.
In the words of Bridges, "Employee-owned businesses create a higher quality of life for workers, including higher wages, lower turnover, and better benefits and job security." Further echoing his commitment, Lindstedt adds, "Employee-owned businesses are good for Colorado and make it easier for your favorite locally-owned businesses to stay in your neighborhood." These incentives, as reported by Colorado Senate Democrats, appear targeted at sustaining small business growth and offering workers a stake in their future.
With bipartisan support, including cosponsors Senator Mark Baisley and Representative Rick Taggart, the new law, HB25-1021, not only introduces new tax deductions and credits for employee-owned businesses but also extends the existing Employee Ownership Tax Credit. This initiative aligns with previous efforts such as HB21-1311, which aimed to mitigate costs for businesses shifting to worker cooperatives, stock ownership plans, or employee ownership trusts.
The updated tax credit will now cover 75 percent of the conversion costs, capping at $167,000. It's designed to relieve some of the financial hurdles businesses face when changing hands from traditional ownership to being owned by those who work within its walls. The hope is that such measures will sustain small businesses and anchor them more firmly to the communities they serve.
