DENVER, CO - Governor Polis today signed a bipartisan bill to expand the Employee Ownership Tax Credit to strengthen incentives for businesses transitioning to an employee-owned business model.
“With the expansion of Colorado’s Employee Ownership Tax Credit, local businesses can continue to increase wages, improve job security, and offer better benefit options for hardworking Coloradans,” said Rep. William Lindstedt, D-Broomfield. “Employee-owned business models make succession planning easier for business owners while keeping businesses within their community. With this bill being signed into law today, Colorado business owners will now have additional tools to sell or retire and employees will have more opportunities to own the business they work for.”
In 2021, Colorado Democrats created a first-in-the-nation refundable income tax credit that incentivizes business owners to move towards employee-owned business models. It allows business owners who are looking to move on from the company to pass the business on to their employees, allowing the business to stay within the community and giving hard-working Coloradans a stake in the company.
HB23-1081, also sponsored by Republican Representative Rick Taggart, expands on the Employee Ownership Tax Credit by:
Making partially employee-owned businesses eligible to help cover the costs associated with expanding employee ownership;
Expanding methods that businesses are using to transfer equity to employees; and
Strengthening incentives for eligible businesses that are transitioning to employee ownership with existing resources.