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Senate Co-Sponsorship Memoranda
Senate of Pennsylvania
Session of 2023 - 2024
Regular Session
MEMORANDUM
| Posted: | June 8, 2023 10:38 AM |
|---|---|
| From: | Senator Lisa Baker |
| To: | All Senate members |
| Subject: | Grantor Trust |
| Pennsylvania is the only state in the country that does not give the grantor of an irrevocable trust the choice to remain legally obligated to pay state income tax on the trust's income. Last session, by unanimously passing SB 1321, we undertook an effort to change that legal deficiency. In the near future, I intend to reintroduce this legislation and invite you to join me in cosponsoring this effort. The primary advantage of having the creator of a trust pay tax is that it frees the beneficiary from having to do so. This choice has long been available for federal income tax purposes. Unfortunately, the current law in Pennsylvania is an incentive for some people to set up their trust in another state. 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. In net effect, this change will be revenue neutral or slightly positive. |
Introduced as SB815