Maine Legislature unanimously advances Sen. Reny’s bill to support small businesses and employee cooperatives

AUGUSTA — On Thursday, June 12, the Maine Senate voted unanimously to advance LD 756, “An Act Creating and Sustaining Jobs Through the Development of Cooperatives and Employee-owned Businesses by Providing Tax Deductions for Certain Qualified Business Activities.” This bill, sponsored by Sen. Cameron Reny, D-Bristol, would incentivize the sale of businesses to its employees by providing a capital gains tax exemption to any business or farm that sells its assets to a cooperative or group of its employees.

“This is a bill to preserve Maine jobs and strengthen Maine businesses,” said Sen. Reny. “As the oldest state in the nation, we have many older business owners who want to begin their hard-earned retirement after decades of running our neighborhood hardware stores, restaurants, farms, and seafood processors. When they retire with no new owner in place, Maine communities lose important small businesses, the goods and services they provide, valuable local jobs, and the character of our towns. This bill will help to create an alternative exit opportunity for business owners in rural Maine, ensuring restaurants, shops, and farms can remain open, and helping hard-working Mainers keep their jobs.”

LD 756 would use a capital gains tax credit to incentivize business owners to sell or transfer their businesses to their employees. Up to $750,000 from a sale would be exempted from Maine capital gains tax. Additionally, it exempts the interest on loans used to fund the employee or cooperative acquisition from Maine’s income tax. This would reduce the cost of financing for this type of sale and incentivize sellers to hold the note if needed.

LD 756 was passed to be enacted unanimously by the House on June 13. It now faces additional votes in the Senate and consideration for funding.

Sen. Reny represents Senate District 13, which includes most of Lincoln County and the towns of Washington and Windsor.

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