From The Oklahoman
January 1, 2010
The tax, commonly known as the death tax, is eliminated effective today based on legislation passed in 2006 that gradually eliminated the estate tax. The legislation was the capstone of a number of tax cuts pushed by House Republicans in 2006.
House Speaker Chris Benge, who was chairman of the House Appropriations and Budget Committee in 2006, said the repeal of the tax eliminates double taxation.
"It’s probably the most unfair,” he said. "Your assets being passed along to your heirs are assets that have been developed after taxes — they’ve already been taxed.”
Before the 2006 legislation passed, sons and daughters could receive up to a $1 million exemption from estate taxes. The exemption was increased to $2 million for 2008 and to $3 million for 2009.
Before the changes took effect, the estate tax brought in about $82 million for the 2006 fiscal year. The Oklahoma Tax Commission collected about $8.4 billion in taxes, licenses and fees during that year. Of that, legislators had about $6 billion to appropriate.
In 2004, the estate tax brought in $111 million, Benge said.
"This change will allow family farms and businesses to survive as they are handed down to the next generation,” said Benge, R-Tulsa.
"When people lose a loved one, they suffer enough without facing a new tax burden, especially one that could potentially force the sale of a family farm or business,” he said. "There is no reason why Oklahomans, who have paid taxes their whole lives, should force their loved ones to pay an extra ‘estate’ tax on their property upon death.”
The federal estate tax has been repealed just for 2010. It needs congressional reauthorization for the repeal to continue.
"There are plenty of challenges each day for family farms and small businesses without having to worry that the state’s death tax burden will make it even more difficult, if not impossible, for the next generation to continue the family business,” said Rep. Jeff Hickman, chairman of the House Revenue and Taxation Committee.
"These type of operations may have significant assets but a razor thin cash flow, making the sale of land that has been in the family for generations or the liquidation of a small business the only way to pay the estate tax,” said Hickman, R-Fairivew. "Congress should follow Oklahoma’s lead and permanently bury this unfair double-taxation scheme.”
Posted on Sun, January 3, 2010