It has been said time and time again that there are two things in life you can count on: death and taxes. This is especially true for Hoosiers because Indiana collects three separate death taxes - the inheritance tax, estate tax, and generation-skipping tax. Currently, when a person dies and leaves money to a descendent, the state collects a percentage. This is known as the inheritance tax. The estate tax, or pick-up tax, is imposed on the transfer of property to a descendent. A generation-skipping tax is imposed when a person leaves an inheritance that is not to a child. For example, if a grandmother wills her possessions to her grandchild instead of her son, the state will collect a portion of the inheritance in taxes. The percentage the state collects on any inheritance is based on the amount inherited. About one-third of the states still collect estate taxes. Federal changes passed in 2001 generally phased out the state estate tax by 2006 for those states whose systems were tied to federal law. These states were required to take action to remove themselves from federal law to maintain a tax system. Many states had their estate taxes tied to the federal tax because estates received a dollar-for-dollar credit that reduced federal taxes owed by the amount they paid to the state. Indiana, along with seven other states, never tied inheritance to the federal pick-up tax. Since 1913, Indiana has endorsed some form of death transfer taxation, and it is time to repeal this outdated tax. I adamantly believe this is an unfair tax, and that Hoosiers should be able to leave their heirs an inheritance without the government imposing taxes. I have proposed legislation to repeal all three forms of the death tax, but, unfortunately, it never received a committee hearing. I will continue to try to get this legislation passed by amending it into another tax bill. It is still early in the session, so I am optimistic that I will be able to get this legislation through. As the legislative session moves forward, I will do my best to keep everyone informed and up to date. I encourage you to contact me as the legislative session moves along. Send letters to: State Rep. Suzanne Crouch, 200 W. Washington St., Room 401, Indianapolis, IN 46204. E-mail: H78@in.gov or call toll-free: 1-800-382-9841. |
