SPRINGFIELD (IRN) — Two bills sitting in the Illinois House would change estate tax laws, one by raising the tax threshold and the other by removing the tax completely.
State Rep. Avery Bourne, R-Raymond, has introduced House Bill 1454, which would repeal the estate tax — sometimes called the “death tax.” This is the second time Bourne has introduced the bill.
Bourne said the existing estate tax disproportionally affects Illinois farmers.
“If a farmer were to pass away and pass that land on to the next generation, Illinois taxes that land and the farm after it’s already gone through property taxes,” Bourne said. “It’s another tax on top of that before they can pass it along. Some family farms are forced to sells some of their land or equipment just to pass that along to the next generation.”
Bourne said that some estates can be taxed up to 16 percent.
“I come from an area where there are a lot of small family farms and especially right now it’s difficult for a lot of them to stay afloat and be profitable and be able to pass it on to the next generation,” Bourne said. “Also, the average age of the farmer is increasing, so we’re going to come up on a time where a lot of these decisions have to be made.”
A potential loss of tax revenue could instigate pushback on the bill, Bourne said. The Illinois Attorney General’s office collected $254 million in estate tax revenues in 2017.
“I don’t think that’s where the conversation should go,” she said. “We don’t make policies just to see how much revenue we can bring in, we need to talk about how this is impacting the people who are having to go through this and pay these taxes.”
A second law in the House could also affect estate taxes. House Bill 0820, sponsored by state Rep. Mike Murphy, R-Springfield, would raise the minimum for taxable estates to the federal threshold, starting in 2020. The state threshold is $4 million. The federal threshold is nearly $11.4 million.
“I think increasing the threshold could be a compromise to make sure we are protecting folks whose estates are smaller and that the compliance costs for them to comply with the law would be easier,” Bourne said.