[r32] Rep. Turner's proposed legislation phases out inheritance tax (1/31/2012)

Tuesday, January 31, 2012

Start Date: 1/31/2012
End Date: 1/31/2012
STATEHOUSE –House Bill 1199, co-authored by Reps. Eric Turner (R-Marion) and Jeff Thompson (R- Lizton), passed out of the House on Monday with a 78-17 vote. The proposed bill allows small business owners, farmers and individuals who have acquired savings and assets to pass these to their children or others without tax.

Indiana is the only state that does not exempt direct descendents children and grandchildren from paying the inheritance tax. Indiana’s neighboring states, Michigan and Ohio, do not have inheritance taxes and Kentucky does not tax on transfers to children.

“The bill would phase out the tax over a period of 10 years, which is a manageable way to accomplish the goal. Hoosiers want to know that one day they can pass on their assets without additional taxes to their heirs,” said Rep. Turner. “Eliminating the inheritance tax would also encourage Hoosiers to stay in the Indiana and not move to another state with no inheritance tax.”

Indiana’s inheritance tax rate can range from one percent to as high as 20 percent of a person’s inheritance; 20 percent is the highest possible inheritance tax rate of any state.

“Parents who save their money throughout their lives, in an effort to support future generations of their family, are penalized for being fiscally responsible,” explained Rep. Thompson. “Indiana is taking a slice of the American dream that was meant for our children and grandchildren. Not to mention, our government can take the largest bite out of this slice in comparison to all other states. This is unacceptable.”

The bill would phase out the Indiana Inheritance Tax over the 10 year period of 2013-2023. Every year, incremental reductions of approximately nine percent would be removed from the state’s inheritance tax.
The bill, once fully phased-in, is estimated to keep as much as $165 million in the pockets’ of taxpayers each year. 

The bill will now move to the Senate.

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Rep. P. Eric Turner serves as Speaker Pro Tem and represents District 32 which includes parts of Grant, Miami, Tipton, Howard, and Hamilton Counties.

Turner NR - inheritance tax passes out of house.docx