Sen. Cameron Reny introduces bill to promote the development of employee-owned businesses by providing tax deductions for sales to employees or cooperatives
AUGUSTA – On Wednesday, March 12, 2025, Sen. Cameron Reny, D-Bristol, introduced 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,” before the Joint Standing Committee on Taxation. The bill 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 cooperative ownership. The bill was the subject of a public hearing on Wednesday.
“This is a bill to preserve and create Maine jobs and strengthen Maine businesses,” said Sen. Reny. “It will help to preserve small businesses and farms in rural areas, especially as their owners age out and retire. Additionally, the Employee Ownership Center will provide valuable resources to employees and owners alike when transferring a business to a co-op or Employee Stock Ownership Plan.”
LD 756 will use a capital gains tax credit to incentivize business owners to sell or transfer their businesses to their employees or to a cooperative. Up to $750,000 from a sale would be exempted from Maine capital gains tax. Additionally, it exempts from Maine income tax the interest on loans used to fund the employee or cooperative acquisition. This would reduce the cost of financing for this type of sale.
This legislation would also expand education and training opportunities for employees seeking to enter cooperative ownership. If passed, the bill would direct the Office of Business Development to create the Maine Employee Ownership Center, which would provide critical information and technical assistance to interested buyers. Increasing employee ownership in Maine could bring more young workers to the state and promote economic and community development in more rural areas.
“CDI supports LD 756 because it is a targeted, cost-effective strategy to preserve and grow good jobs and stable, long-standing businesses here in Maine,” said Rob Brown, the director of Business Ownership Solutions at the Cooperative Development Institute, in his testimony in support of LD 756. “Cooperative and employee ownership offers a hopeful alternative to the increasing and needless loss of long-standing businesses and the jobs they provide, simply because those owners don’t understand the exit planning process and options and don’t know who to turn to for help. LD 756 efficiently and effectively addresses these threats.”
A version of this bill passed in both chambers of the 130th Legislature but died at the end of session due to emergency COVID measures.
LD 756 faces further action in the Taxation Committee.
Sen. Reny represents Maine Senate District 13, which includes most of Lincoln County and the towns of Washington and Windsor.
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