Pennsylvanian farmers who inherit farmland from relatives and continue to work on the property will now be exempt from paying an inheritance tax.
The new law was recently approved and signed by Pennsylvania Governor Tom Corbett, and is designed to provide a measure of financial relief from state tax law
. The exemption was included in the recently passed Pennsylvania Tax Code bill and extends to various farm industries, including both crops and livestock. The exemption will go into effect immediately, and Corbett hopes the law will help farmers pass on working land to heirs without worrying they will have to pay heavy “death taxes.” Lawmakers in other other states have also pushed similar proposals recently.
“The death tax has forced too many families to sell their legacy, their land and their way of life,” said Governor Corbett. “This tax has put too many farms out of business because it was too expensive for farmers to pass them down to their children. This will happen no more. We intend to save our farms.”
Prior to the legislation, heirs who inherited working farms were required to pay a 4.5 percent tax if they were adult children of the deceased and 12 percent if they were siblings.
Real estate and property taxes have placed a significant financial burden on many farmers, and many working properties in the state have been broken up or forced to close down altogether as a result of estate and inheritance tax burdens, according to the Bucks County Courier Times.
Although Pennsylvania farmers may be exempt from state taxes, they will still need to plan for federal estate and gift taxes, as current tax rules are set to expire at the end of 2012.