Pennsylvania to End Inheritance Tax on Businesses

Pennsylvania Governor Tom Corbett recently signed a statebudget that eliminates the inheritance tax on business assets.  The purported goal of this “tax cut is tohelp businesses survive the transition after a death and prevent the loss ofjobs when bereaved owners are forced to sell assets to scrounge up the taxpayment.”

This effort to eliminate the inheritance tax on businessesfollows the elimination of the estate tax on family farms last year.  Businesses are usually the deceased’s singlelargest asset, and the estate may have trouble paying the inheritance tax,which is due nine months after death.

The inheritance tax rate is currently zero percent ontransfers to surviving spouses, 4.5 percent on transfers to lineal heirs, 12percent on transfers to siblings, and 15 percent for other heirs.

See SteveReinbrecht, New State Budget to EndBusiness Inheritance Tax, Lehigh Valley Business, July 8, 2013.