To amend the Internal Revenue Code of 1986 for purposes of the tax on private foundation excess business holdings to treat as outstanding any employee-owned stock purchased by a business enterprise pursuant to certain employee stock ownership retirement plans.
Impact
The amendment proposes adjustments in how private foundations are taxed regarding their business holdings. By allowing employee-owned stock to be considered outstanding stock, the aim is to enable private foundations to operate with greater flexibility without incurring unwanted tax consequences. The legislation could significantly influence how employee ownership is perceived in terms of tax liabilities for these entities, potentially incentivizing the establishment of more employee stock ownership programs.
Summary
House Bill 6440 aims to amend the Internal Revenue Code of 1986 specifically concerning the taxation of private foundation excess business holdings. The bill includes a clause that would classify certain employee-owned stock purchased by a business enterprise, under certain conditions, as outstanding. This change would apply to stock that is not easily tradable on the market and was obtained from an employee stock ownership plan (ESOP). The intent behind the bill is to avoid penalties on private foundations that might otherwise occur due to these holdings exceeding the permitted limits.
Contention
One notable point of contention surrounding HB6440 may stem from the balance it strikes between promoting employee ownership and the existing regulations designed to limit the influence of private foundations on businesses. Critics may argue that the bill could unintentionally create loopholes that allow foundations to maintain more influence or control over businesses, which was intended to be limited in prior legislation. This delicate interplay raises questions about the effectiveness of existing controls on private foundations and how these amendments could reshape such boundaries.
To amend the Internal Revenue Code of 1986 to restore the limitation on downward attribution of stock ownership in applying constructive ownership rules.
To amend the Internal Revenue Code of 1986 to restore the limitation on downward attribution of stock ownership in applying constructive ownership rules.
To amend the Internal Revenue Code of 1986 to provide a credit to small businesses for research activities related to the mitigation of certain drug threats.
To amend the Internal Revenue Code of 1986 to permit qualified business trade expenses to be treated as qualified higher education expenses for purposes of 529 accounts.
To amend the Internal Revenue Code of 1986 to protect small businesses from unemployment insurance premium increases by reason of unrepaid State advances.