News & Events
Putting estate taxes to rest
During Ohio Farm Bureau's Ag Day at the Capitol, hundreds of Ohio farmers gathered to support legislation that would repeal Ohio's estate tax. The tax is particularly burdensome for farmers because it can force their heirs to sell land or take out loans to settle the estate.
Ohio Farm Bureau Federation (OFBF) President Brent Porteus said an average of 84 percent of a farmer’s assets are tied up in capital – land, machinery or buildings – leaving relatively little cash on hand to pay the estate tax. Even when cash is available, paying the tax takes away from making other investments on a farm, Porteus said.
“We need to do everything we can to ensure that today’s farmers have the ability to hand down their farms to the next generation,” he said.
Ohio currently has the lowest estate tax exemption in the nation. Only $338,333 of the taxable estate is exempt from the estate tax, which is levied at a rate of 6 to 7 percent. That compares to an average exemption amount of approximately $1.7 million for other states that have an estate tax.
With increasing land values, a growing number of Ohio farms could be subject to the tax.
Jack Boyle, of Citizens United to End Ohio’s Estate Tax, recalled how a farmer at a Farm Bureau meeting summed up the tax.
“He referred to it as a perpetual seven percent lien on the Ohio family farm, and I don’t think anyone could have said it any better than that,” Boyle said.
Rep. Bob Peterson, a farmer and past OFBF president, said Ohio’s unfriendly tax structure also drives entrepreneurs and job creators to other states.
“You and I know the challenge of passing on a family farm to the next generation, of continuing that family business, whether it’s farming or a Main Street small business,” he told the crowd. “I encourage you today to tell that story, tell how it affects your friends and neighbors personally to my fellow legislators.”
Following the Statehouse rally, the House Ways and Means committee passed the legislation, moving it closer to a full vote.
Lawmakers have indicated that they will wait for Gov. Kasich’s budget proposal before taking further action on the bill. In the meantime, OFBF is encouraging farmers to contact their legislators and ask them to support H.B. 3.