State Representative Steve Bloom, R-Cumberland, continues his push to end the inheritance tax. Just a few weeks into the 2013-14 legislative session, the House Finance Committee approved his legislation, HB 48, to end the inheritance tax, called by some the “death tax,” on family-owned businesses.
The measure is a follow-up to a Bloom bill, signed by Governor Tom Corbett in July 2012, that ended the inheritance tax on family farms.
HB 48 will end the tax on all assets of a family business.
“The business’ assets are those defined under common law, not statutory law,” Bloom said.
He added the exemption would hold for those families that maintain the business at least five years after the death.
The state Department of Revenue estimates the loss in annual taxes at $9.9 million a year, but Bloom said requiring that the business operates five years after the death helps the economy, and the tax base, in the long run.
“These rates can be anywhere from 4.5 percent to 15 percent and can make the difference between forced liquidation of essential business resources and helping a job-creating, family business remain viable,” Bloom said. “Pennsylvania is better off keeping these businesses going rather than [the Department of] Revenue taking its one-time hit and the owners liquidating the business to pay the tax.”