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Senator Regola proposes inheritance tax repeal

Pennsylvania one of only a few states imposing levy on inheritors

            While recognizing that nothing is sure in life except death and taxes, Senator Bob Regola (R-39) is introducing legislation to at least separate the two.  Senate Bill 1529 would phase-out Pennsylvania’s Inheritance Tax -- more commonly known as the “Death Tax.”

            Currently, the tax is paid based on three tiers:  4.5 percent of the estate’s value for direct descendants; 12 percent for assets passing to siblings; and, 15 percent for other heirs (except charitable organizations, government entities and certain institutions).  Under Senator Regola’s legislation, the 4.5-percent rate would be phased-out by the year 2011.  The 12-percent rate would be phased-out by 2014 and the 15-percent rate would end by 2016.

            “Pennsylvania is one of only a few states that still impose this tax,” said Sen. Regola.   “The Inheritance Tax is a cold-hearted burden on families, particularly those with small businesses and farms.  On a personal level, I do not believe the state should profit from someone’s death.  Families should be able to pass on their possessions to their heirs with the least amount of government interference.”     

            Pennsylvania -- along with Indiana, Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Tennessee -- still collect an Inheritance Tax.  Senator Regola noted that Connecticut was recently successful in phasing-out its Inheritance Tax.

            “The death tax is Pennsylvania’s number one family-business killer,” said Kevin Shivers, National Federation of Independent Business (NFIB) State Director.  “With Senator Regola’s help, we can hopefully put to an end this burdensome tax that forces many families to give up on their parents’ dreams.”

            “Unlike the federal estate tax, state inheritance tax laws essentially impose tax on the first dollar of value of an estate passing from a deceased family member to another family member,” said Joel Rotz, PA Farm Bureau State Governmental Relations Director.  “Most farms do not have available cash to pay the tax and the farm family sells off farm assets, leaving succeeding generations to receive farms that are less productive and are less likely to be viable in the future.”

            SB 1529 will be referred to the Senate Finance Committee for consideration.

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Contact:       

Nathan Silcox (717) 787-6063 (Sen. Regola)
Kevin Shivers (717) 717-232-8582 (NFIB)
Mark O'Niel (717) 731-3583 (PA Farm Bureau)