Pennsylvania Farm Bureau Rallies to Reduce State Inheritance Tax

Apr 02, 2001, 01:00 ET from Pennsylvania Farm Bureau

    HARRISBURG, Pa., April 2 /PRNewswire/ -- The leader of a statewide farm
 organization voiced support today for legislative efforts to reduce
 Pennsylvania's inheritance tax.  Guy Donaldson, president of Pennsylvania Farm
 Bureau, stated the organization's support during a news conference held by
 state Representative Kerry Benninghoff.  House Bill 236, sponsored by
 Benninghoff, would reduce the state inheritance tax from 4.5 percent to
 3 percent.
     "State inheritance taxes harshly impact the financial ability of farm
 families to pass farm businesses between generations," Donaldson said at the
 news conference.
     Farm Bureau policy recommends total elimination of the state inheritance
 tax or, absent that, exemptions of $1.3 million for estates passing farm
 ownership and $1 million for all other estates.  Furthermore, Farm Bureau
 recommends that active farms in the farmland preservation program should be
 exempt from the inheritance tax if the farm is passed on to a family member.
     "A family's farm is the basic ingredient in any retirement program, and
 many times are the major components of a successful business for the next
 generation.  Pennsylvania's state inheritance tax can destroy both plans,"
 said Donaldson.
     "For a farm family preparing to pass the farm on to the next generation,
 money must either be put into insurance premiums in order to have enough cash
 on hand to pay the tax at the time of transfer, or else part of the farm's
 capital investment of land, equipment and buildings must be sold off to pay
 the tax bill," Donaldson explained.  "Either way, it's a losing situation for
 farm families.  If land must be sold to pay the inheritance tax, the next
 generation is left with a farm that is less productive and less able to
 survive in the future."
     One of the services Pennsylvania Farm Bureau offers its members is a legal
 service with farm experience in estate planning.  Farm Bureau's Legal Service
 Plan has proven that the state inheritance tax takes a much larger bite out of
 a farm family's wealth than the federal estate tax.  "As a farm family you can
 reduce your federal tax liability through prudent estate planning, but nothing
 short of giving away all your assets before your death can be done to reduce
 the state's inheritance tax," Donaldson explained.  "There are no exemptions
 or exceptions."
     Of 23 estates settled by the Farm Bureau Legal Service Plan from 1995
 through 1999, only one required payment of federal estate taxes while nine
 estates had to pay Pennsylvania's inheritance tax.  The total amount paid in
 federal estate taxes was a little over $62,000 while the total tab for state
 inheritance taxes topped $140,000 for the nine estates.
     "Reduction of Pennsylvania's inheritance tax would help improve the
 economic vitality of our farmers and Rep. Benninghoff's bill has the full
 support of our organization," Donaldson concluded.
     Farm Bureau represents more than 28,000 farm and rural families across the
 state.
 
 

SOURCE Pennsylvania Farm Bureau
    HARRISBURG, Pa., April 2 /PRNewswire/ -- The leader of a statewide farm
 organization voiced support today for legislative efforts to reduce
 Pennsylvania's inheritance tax.  Guy Donaldson, president of Pennsylvania Farm
 Bureau, stated the organization's support during a news conference held by
 state Representative Kerry Benninghoff.  House Bill 236, sponsored by
 Benninghoff, would reduce the state inheritance tax from 4.5 percent to
 3 percent.
     "State inheritance taxes harshly impact the financial ability of farm
 families to pass farm businesses between generations," Donaldson said at the
 news conference.
     Farm Bureau policy recommends total elimination of the state inheritance
 tax or, absent that, exemptions of $1.3 million for estates passing farm
 ownership and $1 million for all other estates.  Furthermore, Farm Bureau
 recommends that active farms in the farmland preservation program should be
 exempt from the inheritance tax if the farm is passed on to a family member.
     "A family's farm is the basic ingredient in any retirement program, and
 many times are the major components of a successful business for the next
 generation.  Pennsylvania's state inheritance tax can destroy both plans,"
 said Donaldson.
     "For a farm family preparing to pass the farm on to the next generation,
 money must either be put into insurance premiums in order to have enough cash
 on hand to pay the tax at the time of transfer, or else part of the farm's
 capital investment of land, equipment and buildings must be sold off to pay
 the tax bill," Donaldson explained.  "Either way, it's a losing situation for
 farm families.  If land must be sold to pay the inheritance tax, the next
 generation is left with a farm that is less productive and less able to
 survive in the future."
     One of the services Pennsylvania Farm Bureau offers its members is a legal
 service with farm experience in estate planning.  Farm Bureau's Legal Service
 Plan has proven that the state inheritance tax takes a much larger bite out of
 a farm family's wealth than the federal estate tax.  "As a farm family you can
 reduce your federal tax liability through prudent estate planning, but nothing
 short of giving away all your assets before your death can be done to reduce
 the state's inheritance tax," Donaldson explained.  "There are no exemptions
 or exceptions."
     Of 23 estates settled by the Farm Bureau Legal Service Plan from 1995
 through 1999, only one required payment of federal estate taxes while nine
 estates had to pay Pennsylvania's inheritance tax.  The total amount paid in
 federal estate taxes was a little over $62,000 while the total tab for state
 inheritance taxes topped $140,000 for the nine estates.
     "Reduction of Pennsylvania's inheritance tax would help improve the
 economic vitality of our farmers and Rep. Benninghoff's bill has the full
 support of our organization," Donaldson concluded.
     Farm Bureau represents more than 28,000 farm and rural families across the
 state.
 
 SOURCE  Pennsylvania Farm Bureau