Menu

Two bills pending in the Ohio House of Representatives aim to change Ohio’s estate tax law to make it fairer for individuals as well as small to medium-size family businesses.

Ohio Farm Bureau has been concerned about the state’s estate tax law for years and has consistently supported legislation to eliminate or reduce the tax.

"Ohio has one of the lowest estate tax thresholds of any state, meaning many farmers and Ohioans are subject to steep taxes upon death," said Rocky Black, OFBF’s senior director of policy and political affairs.

Currently, Ohio’s estate tax, also known as the death tax, is levied on estates valued over $338,333. Estates valued between $338,333 and $500,000 are charged $13,900 plus 6 percent of every dollar over $338,333. Estates worth more than $500,000 are charged $23,600 plus 7 percent of every dollar over $500,000.

Rep. Bob Latta, R-Bowling Green, has proposed phasing out the tax by Jan. 1, 2008 but allowing voters of a township or municipal corporation to continue the tax locally.

Another bill introduced by Rep. Larry Wolpert, R-Hilliard, would give local communities the opportunity to repeal the estate tax in their jurisdiction, Black said.

"This is a very unpopular tax. Local government is likely to be sympathetic because they realize that the tax is breaking up homesteads and farms," he said.

The current death tax in Ohio is of "critical concern" to 75 percent of Ohio Farm Bureau members who participated recently in an estate tax survey. Forty-one percent of respondents said they have hired a financial planner to help them manage succession plans for the tax. In the process, they have spent thousands of dollars – some as much as $10,000 – on their succession plans, according to the survey.

"Those same dollars could be reinvested in new equipment, creating new jobs or providing employee benefits," said Ty Pine, state legislative director for National Federation of Independent Business, in testimony before the House Ways and Means Committee. He called Ohio’s estate tax "devastating to multi-generational family businesses." The Ohio Chamber of Commerce recently said it supports reducing the estate tax, Black said.

Fifty-three percent of OFBF respondents said Ohio’s death tax is a contributing factor in determining where they will spend their retirement. Some lawmakers have maintained that the tax is causing residents to leave Ohio when they retire.

Those who don’t want the estate tax to change say that it helps generate revenue for local and state governments. But Black pointed out that there’s no way for local or state officials to plan how to use the money.

"You cannot budget for it because you don’t know when people will die. You have to go out and find something to spend it on. It’s a very goofy tax," he said.