By Jessica Wray
The Statehouse File
INDIANAPOLIS – A committee in the Indiana House of Representatives Monday approved a measure that would phase out a tax Hoosiers have to pay when they inherit from a family member or loved one.
The House Way and Means Committee voted 16-3 in favor of House Bill 1199.
What opposition there was to the bill focused on how the state would make up the cash loss in eliminating the inheritance tax as a revenue source.
The bill’s author, Rep. Eric Turner, R-Marion, said his bill is important to “small businesses, farmers and people who want to leave what they’ve put together for their lifetime” to their children and other loved ones.
“We have one of the more onerous inheritance tax laws in the United States,” Turner said. “Many states don’t have one, and I don’t think we should have one, so I’ve developed a bill that manages the process over 10 years to phase it out, and I think it is a good way to do it.”
The bill, if it becomes law, would affect the estates of Hoosiers who die after June 30, 2013. Their beneficiaries would receive a tax credit after the transfer occurs.
Each year for a 10-year period, the credit would increase, until the tax is eliminated. The state would lose about $15 million in 2015 in revenue.
Counties and local governments also could take a small hit if the bill passes, because they receive small portions from the state’s general fund based on the inheritance tax. Counties receive about 8 percent of the state’s inheritance tax collection.
The bill now moves to the House floor for consideration, where it could be heard later this week.
“I’m confident that we can pass it out of the House and we can start negotiating with the Senate,” Turner said.
Jessica Wray is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.