Family Farms Helped by Changes to State Tax Code, Smith Says
HARRISBURG - House Speaker Sam Smith (R-Jefferson/Indiana/Armstrong) said today that Pennsylvania’s family farmers will now be exempt from the state’s inheritance tax and the realty transfer tax.
“Running a farming operation is a challenging business,” Smith said. “There are many variables that can affect the financial health of the farm, thus impacting cash flow and the level of cash reserves available. A hefty inheritance tax bill can jeopardize the future of a family farm. For many years the farming community has been advocating for various tax reform measures. I’m glad we were able to get these done.”
The state’s tax code has been changed to exempt the transfer of agricultural property from a deceased individual to a surviving child, grandchild, or sibling from the inheritance tax.
“Inheritance taxes are often one of the first hurdles that children taking over farming operations from a deceased parent must work to overcome,” Smith said. “These taxes are essentially paid on the first dollar of value of the decedent’s taxable estate. Some families are forced to sell assets or land to pay this sizable tax bill.”
The tax code also contains a new provision waiving the state’s 2 percent realty transfer tax when a farm is transferred by a family member to a family farm business controlled by the same members of the same family. This would include the reorganization of a family-owned farm business to a limited partnership, limited liability partnership or a corporation managed by the same family.
“Currently, family-owned businesses that are not farming-related are entitled to this exemption, Smith noted. “This simply ensures that farmers receive the same treatment.”
State Representative Sam Smith
66th District, Pennsylvania House of Representatives
Contact: Kelly Fedeli