HB 23-1081: Employee Ownership Tax Credit Expansion

• Expands tax credits for businesses converting to employee ownership by increasing credit caps from $25,000 to $40,000 for worker-owned cooperatives and employee ownership trusts, and from $100,000 to $150,000 for employee stock ownership plans.

• Introduces new "alternate equity structure" definition allowing employers to grant employees various forms of ownership (stock options, phantom stock, profit interests, etc.) if offered to at least 20% of eligible workers with equal informational and decision-making rights.

• Creates new tax credit for "qualified employee-owned businesses" to claim up to 50% of expansion costs (maximum $25,000) when increasing employee ownership stake by at least 20% of total business ownership, applicable for tax years 2024-2026.

• Adds "expansion costs" as eligible professional services (accounting, legal, business advisory) for existing employee-owned businesses seeking to expand their ownership structures, including audit costs.

• Establishes "qualified employee-owned business" category for businesses already converted to employee ownership trusts, employee stock ownership plans, worker-owned cooperatives, or alternate equity structures with headquarters in Colorado.