Monday, July 15, 2013
Pennsylvania Governor Tom Corbett recently signed a state budget that eliminates the inheritance tax on business assets. The purported goal of this “tax cut is to help businesses survive the transition after a death and prevent the loss of jobs when bereaved owners are forced to sell assets to scrounge up the tax payment.”
This effort to eliminate the inheritance tax on businesses follows the elimination of the estate tax on family farms last year. Businesses are usually the deceased’s single largest asset, and the estate may have trouble paying the inheritance tax, which is due nine months after death.
The inheritance tax rate is currently zero percent on transfers to surviving spouses, 4.5 percent on transfers to lineal heirs, 12 percent on transfers to siblings, and 15 percent for other heirs.
See Steve Reinbrecht, New State Budget to End Business Inheritance Tax, Lehigh Valley Business, July 8, 2013.