COLUMBUS—State Representatives Jay Hottinger (R- Newark) and Cheryl Grossman (R- Grove City) today introduced House Bill 326 that would shrink Ohio’s estate tax liability, a proposal included in “The Future of Ohio” plan introduced earlier this fall by House Republicans.
“It is time to improve Ohio’s heavy tax burden by reducing the estate tax,” Hottinger said. “Ohioans are already handicapped by one of the highest tax rates in the country, which is shortchanging our ability to attract jobs and families. The estate tax continues to be a contributing cause of our population exodus. This legislation would encourage many Ohioans to remain in the state where they can pass on their life savings to their heirs without penalty.”
This legislation would allot all estate tax revenues to local governments by eliminating the state share, which is currently 20 percent. Municipalities and townships would have the right to exempt the estate tax within their territorial jurisdiction. The bill would also increase the state estate tax credit to $15,575 and link it with the consumer price index, effectively raising the exemption threshold to $366,250 for estates with dates of death on or after January 1, 2010.
“Ohio is one of only 23 states that still impose a death tax,” Grossman said. “What kind of messages does this send to Ohioans who have worked hard their whole lives and invested in our communities? It is important as we seek ways to improve Ohio’s economy that we ease the tax burden in any way we can, including for those families struggling with the loss of a loved one.”
Under current Ohio law, every estate is taxed at a rate ranging from 2 percent to 7 percent, and most have an initial fee assessed as well. There are six classified tax brackets ranging from taxable estates of $40,000 or less to estates worth more than $500,000. The payment of this tax is divided to provide 20 percent to state General Revenue Fund and the additional 80 percent is distributed to the local municipalities.
This bill is a key component to “The Future of Ohio” package of proposals rolled out by House Republican members last month. These economic development proposals were drawn from discussions with constituents and small business leaders across Ohio. The initiatives would come at a minimal cost to taxpayers, with long-term job creation, economic stimulus, and far greater revenue in state income than costs. Jobs created by these proposals would have a multiplier effect on the economy by increasing tax revenues for state and local government.
Wednesday, October 21, 2009
Ohio House GOP Lawmakers Introduce Estate Tax Reduction Act