Promotion and Expansion of Private Employee Ownership Act of 2025

H.R. 3105 would modify tax and small business rules to encourage more private company owners to sell shares to employee stock ownership plans, known as ESOPs. The bill would allow business owners who sell shares to an ESOP that owns at least 30 percent of an S corporation to defer taxes on their gains by reinvesting in stocks and bonds of U.S. companies. Currently, such sales after 2027 only qualify for a 10 percent tax deferral; the bill would expand this to 100 percent deferral and move up the effective date. The bill would also create a new S Corporation Employee Ownership Assistance Office in the Treasury Department to educate business owners about ESOPs and preserve government contracting preferences for companies that become employee-owned. If enacted, the bill could make it easier for employees to gain ownership stakes in their companies and build retirement savings through these plans.