The majority of Maine’s business, farms and multi-unity housing is owned by people nearing or at retirement age, many of whom don’t have succession plans. In Maine, 400,000 acres of farmland is expected to change hands in the next ten years. LD 1338 will help farmers sell their farm, and business owners sell their business, to a community or worker-owned cooperative. Additionally, it will help owners of housing, including multi-unit buildings and manufactured housing parks to sell to their residents in a housing cooperative. The bill is sponsored by Rep.Martin Grohman (D-Biddeford), Rep.Karl Ward (R-Dedham), Rep.Craig Hickman (D-Winthrop), Sen. Andre Cushing (R-Penobscot), Sen Michael Carpenter (D-Aroostook), Rep. Ralph Chapman (D-Brooksville), and Rep Owen Cass (I-Rockland). We currently have a public hearing scheduled for Wednesday 4/26 in front of the Taxation Committee.
We would love to have members of Slow Money Maine to submit testimony, either written or in-person, in support of this bill. Also if you know any farmers or business owners that you think would support this bill, please let us know.
The bill has 2 provisions:
Exempt from income tax the proceeds of the sale of a business, farm, mobile home park or apartment building to an employee or cooperative owned enterprise. Democrats and Republicans to pass a similar bill in NJ, and Iowa recently passed a similar law. At the federal level, the sale of a C Corp to employees (either as an ESOP or worker cooperative) essentially eliminates most of the capital gains tax, and many Rs and Ds, from Bernie Sanders to very conservative folks are sponsors of legislation that would extend that treatment to S Corps. Both King and Collins are sponsors of that legislation. Additionally, 8 states have tax incentives for selling a mobile home parks to residents, including Washington, Oregon and North Carolina.
Exempt interest income from tax for sellers or ME banks earned from financing such conversions.