|Posted:||January 4, 2013 10:28 AM|
|From:||Senator Dominic Pileggi|
|To:||All Senate members|
|Subject:||Legislation to Eliminate the Death Tax on Small Businesses|
|I plan to introduce legislation to provide an exclusion from the Pennsylvania inheritance tax for all small businesses.
Earlier this year, Governor Corbett signed into law legislation based on my Senate Bill 746 (Act 85 of 2012) to exempt family farms from the inheritance tax. I believe the next logical step is to apply the same exemption to small businesses. In far too many cases, the heirs to small companies cannot afford to pay the inheritance tax when the business owner dies, and they are forced to either liquidate the business’s assets or sell the business.
This legislation will apply to small businesses which are transferred between members of the same family, when the family owns at least 75 percent of the business. The legislation will require that the business continue to be operated for a period of seven years following the transfer, or else it will become subject to the inheritance tax.
The bill will define a “small business” as one with 50 or fewer employees and a net book value of assets totaling less than $5 million at the beginning or end of the most recent calendar year. This is similar to the definition used to determine eligibility for the small business set-aside portion of the research and development tax credit program.
Introduced as SB303