Governor Mitch Daniels signed a bill (SB 293) on March 20th to phase out Indiana’s inheritance tax. Earlier this month, legislators approved a measure that will decrease the inheritance tax in stages beginning next year until it is eliminated after 2021. In addition, the exemption level (the amount not subject to the tax for the immediate family) is increased from $100,000 to $250,000.
According to The Tax Foundation, “the long phase out period is designed to give policymakers ample time to deal with the revenue impact.” Lawmakers suggest that this impact will be offset by an agreement to begin taxing Amazon.com in 2014. The inheritance tax currently brings in about $145 million annually, or 1% of total taxes.
“Because the exemption levels are so small, even small businesses will benefit. It is a positive move for anyone who has assets that they want to pass to their heirs,” says Kevin Aaron, Tax Specialist at Simons Bitzer