Sen. Jim Banks files first bill; plans to eliminate inheritance income tax<\/strong>
\nBanks says lifting tax could lead to economic growth<\/em><\/p>\n<\/p>\n
(December 22, 2010) – Indiana’s tax on inheritance income – also known as the death tax – would be lifted if a bill filed today by State Sen. Jim Banks (R-Columbia City) becomes law.<\/p>\n
“This tax has long been opposed by family farmers and businessmen,” Banks said. “Many believe it’s a disincentive to local economic growth. Indiana is one of only a handful of states still imposing this tax.”<\/p>\n
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Banks filed his first bill – a measure which calls for a five-year phase out of the state’s inheritance income tax – with Secretary of the Senate Jennifer Mertz (picutred left) at the Statehouse.<\/p>\n
Indiana imposes an inheritance tax on those who are residents of the state when they die. Banks said the tax is levied against the heir who receives the inheritance – excluding spouses and charitable organizations.<\/p>\n
Tax rates vary depending on the beneficiary’s relationship with the descendent. For example, children are taxed at a lesser rate than a distant cousin, who would in turn be taxed at a lesser rate than a friend of the deceased.<\/p>\n
“If passed, this bill would allow the state to responsibly phase out the inheritance tax over five years,” Banks said. “By eliminating this burdensome tax, we are encouraging hardworking Hoosiers to retire in Indiana and pass along their wealth to family or friends without the fear of government intrusion.”<\/p>\n
Banks said by eliminating the inheritance income tax, the state could attract investments which could lead to economic growth. Banks filed the legislation in response to concerns from constituents in Senate District 17.<\/p>\n
Taxes on state and federal inheritance income and estates will cost this generation of Hoosiers thousands of jobs, according to the American Family Business Foundation.<\/p>\n
Banks’ legislation will be assigned to a committee for further consideration.<\/p>\n
Only six states levy an inheritance tax, with the rate depending on the relationship of the heir to the deceased, according to Banks.<\/p>\n
Banks represents Senate District 17, which includes Whitley, Wabash, Huntington, Allen, Grant and Kosciusko counties.<\/p><\/blockquote>\n
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