India’s finance minister this week released a budget that includes, among other things, a five per cent reduction in the corporate income tax. Narendra Modi, the Prime Minister of India, won a landslide election last May...
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- Pennsylvania Legislators Give Family-Owned Farms a Break ...
Pennsylvania Legislators Give Family-Owned Farms a Break from the Inheritance Tax
In a recent vote, the Pennsylvania House of Representatives overwhelmingly passed H.B. 1864, which seeks to modify how agricultural property is taxed by the state's inheritance tax when the owner dies.
The difference between an estate tax and an inheritance tax is that an inheritance tax rate depends on the relationship of the heir to the decedent, while estate tax rates do not. Pennsylvania's inheritance tax rates are the following:
· 0 percent on transfers to a surviving spouse or to a parent from a child aged 21 or younger;
· 4.5 percent on transfers to direct descendants and lineal heirs;
· 12 percent on transfers to siblings; and
· 15 percent on transfers to other heirs, except charitable organizations, exempt institutions and government entities exempt from tax.
If the bill is made law, it would effectively exempt family farms from the inheritance tax. Specifically, it would exempt "transfers of an agricultural commodity, agricultural conservation easement, agricultural reserve, agricultural use property or a forest reserve."
Though the absence of an inheritance/estate tax is ideal, this possible policy change would certainly move Pennsylvania in the right direction.
(For further reading concerning Pennsylvania's inheritance tax debate, see David S. Logan's testimony before the Pennsylvania House Finance Committee, The Economic Effects of the Estate Tax.)
Follow David S. Logan on Twitter @Loganomix
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