Repeal of Pennsylvania Death Tax a Huge Boon to Family Farms
A new law in Pennsylvania will have a huge impact on the state's 63,000 farm families. For many years, adult children who inherit the family farm were forced to pay a 4.5 percent state inheritance tax. If a sibling inherited the farm, the tax was worse: 12 percent.
Farmers have been trying to get the inheritance tax, known as the "death tax," repealed since 1973. The tax often forced people to sell their inherited farms because they did not have the money to pay the tax. Some people had to sell equipment, other farm assets or animals just to pay the tax.
One farmer who did not have to pay the tax when he inherited his father's farm said the tax was very hard for farmers to pay because they do not have liquid cash. All their money is tied-up in assets to run the farm. The new law that repealed the death tax will benefit his children should they wish to keep the farm going after he retires or dies.
A Pennsylvania Farm Bureau spokesperson, the new law benefits every farm in Pennsylvania, as it allows heirs to continue farming if they inherit a farm from a parent or sibling. The money that the farmers save by not paying the death tax will allow more farms to continue and can be reinvested into the farm. According to the Department of Agriculture, Pennsylvania's 7.65 million acres of farmland generates $5.7 billion.
Source: The Patriot News, "Pennsylvania farmers like removal of death tax from their heirs," July 29, 2012.
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