Indiana’s inheritance tax will be phased out over ten years under a bill heading to Governor Mitch Daniels.
With the exception of charitable organizations and spouses, the inheritance tax is levied on people who inherit money or property. The legislature approved a measure Friday that will phase the tax out over the next ten years.
In the end, Indiana is estimated to lose about $165 million a year in revenue. Despite the revenue loss, bill author Eric Turner (R-Cicero) says eliminating the inheritance tax is simply good for Hoosiers.
“This bill will help small businesses, family farms and just regular folks who’ve saved a little bit over their lifetime and want to leave something to their children or grandchildren.”
But State Representative Ed DeLaney (D-Indianapolis) says eliminating the tax isn’t good public policy, particularly when the state is just coming out of a recession. He says Indiana is going to miss that money.
“We’re either going to have to raise sales or income tax or slash our services to a level that we can’t live with.”
State Representative Vernon Smith (D-Gary) says he doesn’t want the government taking the money he’s trying to give to his family.
“I’ve made some real sacrifices to save money and I want it to go to those that I want it to go to.”
Indiana's 92 counties share in that inheritance tax revenue stream. According to the Indiana Association of Counties, the potential amount lost varies by county, but, on average, could amount to $18-20 million a year.
