New Jersey State Senator Troy Singleton introduced S. 3112 on October 18, 2018.  This legislation provides for a gross income tax exclusion for capital gains from sale of certain employer securities.  As stated in the legislation

This bill provides a gross income tax exclusion for certain capital gains from the sale of employer securities of a non-publically traded business with fewer than 500 employees, whose headquarters or base of operations is in this State, to an employee stock ownership plan, a New Jersey S corporation owned by an employee stock ownership plan, or an eligible worker-owned cooperative, benefiting employees of the business in this State, if upon completion of the transaction the employee stock ownership plan, New Jersey S corporation owned by an employee stock ownership plan, or eligible worker-owned cooperative plan owns at least 30 percent of all outstanding employer securities issued by the business.

The purpose of this bill is to incentivize small businesses to establish employee stock ownership plans.  An employee stock ownership plan allows companies to share ownership with employees without requiring employees to invest their own money.  In addition, this bill encourages small business owners to sell their businesses to the very employees that contributed to their success.  This will help to ensure that local businesses are not sold to out-of-state buyers, which is often detrimental to the fabric of local communities.

If New Jersey can do this – why not Indiana?