1Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
2act relating to tax reform and State taxation by codifying
3and enumerating certain subjects of taxation and imposing
4taxes thereon; providing procedures for the payment,
5collection, administration and enforcement thereof; providing
6for tax credits in certain cases; conferring powers and
7imposing duties upon the Department of Revenue, certain
8employers, fiduciaries, individuals, persons, corporations
9and other entities; prescribing crimes, offenses and
10penalties," in inheritance tax, further providing for
11definitions and for exclusions.

12The General Assembly of the Commonwealth of Pennsylvania
13hereby enacts as follows:

14Section 1. Section 2102 of the act of March 4, 1971 (P.L.6,
15No.2), known as the Tax Reform Code of 1971, is amended by
16adding a definition to read:

17Section 2102. Definitions.--The following words, terms and
18phrases, when used in this article, shall have the meanings
19ascribed to them in this section, except where the context
20clearly indicates a different meaning:

21* * *

1"Small business." An enterprise that has:

2(1) not more than fifty employes;

3(2) a net book value of assets totaling less than five
4million dollars ($5,000,000) at the beginning or end of the most
5recent calendar year; and

6(3) has been operated by a person with an ownership interest
7of at least seventy-five per cent of the business for a minimum
8of five years.

9* * *

10Section 2. Section 2111 of the act is amended by adding a
11subsection to read:

12Section 2111. Transfers Not Subject to Tax.--* * *

13(t) A transfer of a small business and its assets, including
14real estate, is exempt from inheritance tax provided that the
15small business is being transferred to one or more members of
16the same family and the family member maintains the operation of
17the small business for a minimum of seven years.

18Section 3. The addition of section 2111(t) of the act shall
19apply to the estates of decedents who die on or after the
20effective date of this section.

21Section 4. This act shall take effect immediately.