Bloomberg BNA

Posted April 29, 2015, 4:32 P.M. ET

By Marc Heller

Two lawmakers on the House Ways and Means Committee told advocates for employee stock ownership plans today that they will push hard to preserve the plans’ tax benefits as Congress moves toward revamping the tax code.

Reps. Erik Paulsen (R-Minn.) and Richard E. Neal (D-Mass.) said at an forum sponsored by Employee-Owned S Corporations of America that they expect the interests of passthrough businesses—including their retirement plans—to rank especially high as the committee considers tax changes. Paulsen said he plans to reintroduce legislation to protect and expand the favorable tax treatment for ESOPs.

“I really think we should be doing more than putting a wall around it,” Paulsen said at the meeting, attended by ESCA members, including business owners from around the U.S.

In the previous session of Congress, Paulsen and Reps. Dave Reichert (R-Wash.) and Ron Kind (D-Wis.) proposed legislation allowing S corporations to defer tax on gains from the sale of employer securities to ESOPs sponsored by S corporations, and providing a tax deduction for 50 percent of the interest incurred on loans to S corporation-sponsored ESOPs for the purchase of employer securities.

Paulsen said he intends to offer that legislation again in 2015. “The bipartisan component is very real. It’s very important,” Paulsen said.