Iowa governor touts support of ESOPs -- BizTimes
Companies that use an Employee Stock Ownership Plan structure provide many benefits to the state by keeping tax dollars and jobs within Iowa’s borders, Gov. Terry Branstad said during a visit to Two Rivers Marketing in Des Moines
Branstad visited the company’s office to recognize October as Employee Ownership Month in Iowa and to discuss the advantages of an ESOP business structure. Two Rivers Marketing is a wholly owned subsidiary of Dubuque-based Woodward Communications Inc., which owns TH Media and Biztimes.biz.
Woodward Communications established its ESOP in 1992. Today, WCI is majority employee owned — 97 percent — by more than 500 employees through its ESOP.
Branstad said he is supportive of the ESOP business model, noting the Legislature in recent years has passed additional incentives for companies that implement an ESOP. Iowa business owners who sell their companies to employees through an ESOP plan get a 50 percent tax deduction on capital gains earned from the sale. Iowa also offers grant support of up to $25,000 to help companies defray the upfront costs of feasibility studies when considering an ESOP.
When a private business owner in Iowa retires, selling to an out-of-state company could result in the loss of jobs or even the entire business for the state, Branstad said. If the owner sells the company to its employees through the formation of an ESOP, the state keeps the company, those employees and the related tax dollars, he said.
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