IN lawmakers propose changes to the inheritance tax
Two bills making their way through the General Assembly this session would make changes to the state’s inheritance tax, and its elimination may be the ultimate result.
The inheritance tax is levied on people who inherit money or property. Spouses and charitable organizations are exempt in Indiana. A Senate bill would lower the inheritance tax by about half as well as expand exemptions. But a House bill eliminates the tax entirely. And House Ways and Means chairman Jeff Espich (R-Uniondale) says when the Senate bill comes up in his committee, he wants to amend the bill to include an elimination of the tax.
“I think the House version is much cleaner and easier to understand and implement. And so, at least in terms of the phase-out mechanism of the House bill, I think that’s where we want to go.”
The phase-out eliminates the inheritance tax over a ten-year period. The estimated revenue loss for the state is $165 million per year. And counties share in that revenue stream.
Indiana Association of Counties legislative director Andrew Berger says the potential amount lost varies by county, but estimates say counties would lose, on average, $18-20 million a year. Under the Senate bill, the loss would only be an average of $6-8 million per year. Berger says his organization doesn’t necessarily oppose the elimination.
“County officials have no philosophical attachment to the inheritance tax. It’s really just, if it’s going to go away, we need to find some way to replace the revenue.”
The final details of the bills will likely be worked out in conference committee later this session.