STATEHOUSE (Jan. 24, 2012) – The Senate Committee on Tax and Fiscal Policy voted 11-0 today in support of State Sen. Brandt Hershman’s bill to decrease Indiana’s inheritance tax.
Senate Bill 293 will now be considered by the full Senate.
Hershman (R-Buck Creek), Chair of the Senate Tax Committee, said Indiana’s inheritance income tax is levied against heirs who receive inheritances, not including spouses and charitable organizations. Tax rates vary depending on the beneficiary's relationship with the descendent. For example, children are taxed at a lesser rate than a distant cousin, who would in turn be taxed at a lesser rate than a friend of the deceased.
Under Hershman’s initiative, exemptions based on the beneficiary’s relationship to the deceased are increased through 2015. Rates would ultimately be cut by half after June 30, 2016.
He said Indiana can work to find fairer ways to recoup lost revenue that will result from reducing the unpopular ‘death tax.’
“Citizens continually pay taxes on their investments while living, and then upon their death, we tax those investments again,” Hershman said.
Testimony in support of SB 293 was offered by Farm Bureau, the Indiana Chamber of Commerce, Indiana Manufacturers Association and National Federation of Independent Business.