Omni Cable, West Chester, Pa., which is owned by its employees through an employee stock ownership plan (ESOP), met with Congressman Jim Gerlach from Pennsylvania's 6th District in May to promote legislation that would enhance the viability of ESOPs. The visit came during the annual ESOP Association Conference in Washington D.C.
The ESOP Promotion and Improvement Act of 2010, H.R. 5207, would, among other things, amend the 1042 ESOP tax deferred rollover provisions by permitting sellers to the ESOP of an S corporation to utilize the ESOP tax benefit referred to as the tax-deferred rollover, or the so-called 1042 treatment. The bill also changes how proceeds from a sale to an ESOP may be reinvested and repeals a 10 percent tax on S corporation distributions from current earnings, also referred to as dividends, which are passed through to ESOP participants in cash.
Congressman Gerlach noted that he would support efforts of ESOP companies by signing on to co-sponsor this legislative effort.
“It was a great experience to be able to tell our story about employee ownership at Omni Cable, and the value an ESOP company can provide to employees, the community and the future of United States-based companies,” said Sean Mooney, HR director of Omni Cable.