Posted: | June 30, 2023 11:38 AM |
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From: | Representative Greg Scott |
To: | All House members |
Subject: | Grantor Trust Legislation |
Last year, the Pennsylvania Senate unanimously approved Senate Bill 1321, which would have afforded a grantor of an irrevocable trust the choice to remain legally obligated to pay state income tax on the trust's income. The primary advantage of having the creator of a trust pay tax is that it frees the beneficiary from having to do so. Unfortunately, the bill did not receive consideration in the House before the conclusion of the legislative session. The choice for grantors has long been available for federal income tax purposes, and Pennsylvania is the only state in the country that does not provide grantors this option. As a result, current law incentivizes people to establish a trust in another state, resulting in a potential loss of revenue. There is no good reason to sustain a system that makes Pennsylvania noncompetitive. By simplifying the rules to conform to practices across the nation, it will avoid confusion on the part of tax filers and make administration easier for state revenue officials. That is why I am introducing companion legislation to maximize consideration of this long overdue change to how our state handles trusts. Please join me in sponsoring this timely legislation. |
Introduced as HB1636