Death Tax Eliminated for Farm Families
Included in the overall 2012-13 state budget was a change in Pennsylvania’s Tax Code that eliminated the so-called “death tax” that has negatively impacted farm families for generations. Under the new law, the transfer of certain agricultural real estate and property to a surviving child or sibling will be exempt from the state’s inheritance tax.

Under previous law, children who received a $500,000 farm through death of the parent would be required to pay approximately $22,500 in inheritance taxes. If the farm is passed by death to surviving brothers and sisters, the inheritance tax liability was approximately $60,000, with payment of the tax required to be made in cash. As a result, many family farmers were forced to sell off parcels of the farm just to pay the tax or leave farming altogether.

The new law also will exempt from the realty transfer tax a transfer of real estate used for agriculture by a family member to family farm business controlled by the same members of the same family. In other cases, the realty transfer tax is imposed at 2 percent of the value of the property being transferred.

Both of these tax changes are designed to enhance our state’s No. 1 industry – agriculture – and help to ensure that future generations of family farms and farmers are around to feed the world.