S.F. No. 4161 Summary

• Allows individual income tax subtraction for net capital gains from selling employer securities to a qualified Minnesota employee stock ownership plan (ESOP) or worker cooperative, if the plan or cooperative owns at least 30 percent of the corporation's stock within 60 days of sale.

• Permits subtraction for interest earned from qualified ownership succession loans used to finance acquisitions of employer securities by ESOPs or worker cooperatives, or to refinance such loans.

• Requires the selling taxpayer to have continuously held the employer securities for at least three years and limits the subtraction to corporations with 500 or fewer full-time equivalent employees based in Minnesota.

• Provides corporate franchise tax subtraction for banks, insurance companies, lending corporations, and regulated investment companies that earn interest from qualified ownership succession loans related to ESOPs and worker cooperatives.

• Effective for taxable years beginning after December 31, 2019.