Indiana Phasing out the DEATH TAX

STATEHOUSE— Today, two key pieces of legislation supported by House Republicans was signed into law by the Governor. The first, House Enrolled Act (HEA) 1376 will provide additional funding to state fair stage collapse victims, increase funding for full day kindergarten, and improve the Automatic Taxpayer Refund.

“Last year a tragedy in our community occurred with the collapse of the stage at the State Fair. Our prayers and thoughts go out to those affected by this tragedy. No amount of money will make up for what occurred, but we felt that we could do better by the victims and their families,” said Speaker Bosma.

HEA 1376 will increase the amount of compensation available for victims of the state fair stage collapse from $5 million to $11 million.
The legislation would also double the per student grant for full day kindergarten by providing an additional $80-100 million in funding—an increase from $1,227 per student to $2,400 per student. HEA 1376 provides the most significant investment in full day kindergarten in state history.

“We must continue to invest in the future of Indiana.

“For the first time in Indiana’s history we have completed the funding of full-day kindergarten to better provide every child an education that will serve as a foundation,” said Speaker Bosma.

HEA 1376 enhances the Automatic Taxpayer Refund which was created last year. Current projections indicate that four million Hoosiers could receive a refund of at least $50 each when they file their 2012 tax returns next spring.

Another important piece of legislation signed into law today was the Inheritance Tax bill, Senate Enrolled Act (SEA) 293. This legislation will allow small business owners, farmers and individuals who have acquired savings and assets to pass these to their children or others without tax.

Indiana is the only state that does not exempt direct descendants’ children and grandchildren from paying the inheritance tax. Indiana’s neighboring states, Michigan and Ohio, do not have inheritance taxes, and Kentucky does not tax on transfers to children.

Indiana’s inheritance tax rate can range from one percent to as high as 20 percent of a person’s inheritance; 20 percent is the highest possible inheritance tax rate of any state.

The bill would raise the exemption in year one and phase out the Indiana Inheritance Tax over the next nine years starting in 2013. It phases out inheritance tax replacement amounts payable to counties over 10 years. Every year, incremental reductions of approximately $14 million would be removed from the State’s inheritance tax revenue.

The bill, once fully phased in, is estimated to keep as much as $165 million in the pockets of taxpayers each year.

“I can confidently say that House Republicans have fulfilled their promises and enacted legislation that will significantly continue to strengthen Indiana,” said Speaker Bosma.

Source: House of Representatives Republican Caucus