Ohio Repeals its Estate Tax Beginning on Jan. 1, 2013

Ohio Repeals its Estate Tax Beginning on Jan. 1, 2013

The new Ohio budget signed into law on June 30, 2011, repeals Ohio's estate tax, effective January 1, 2013. (The current Ohio estate tax imposes a 6% rate on estates of $338,333, rising to 7% on estates over $500,000.)  Twenty-two states (plus the District of Columbia) currently impose an estate tax or an inheritance tax (Maryland and New Jersey have both). A 2008 study named the estate tax the primary reason wealthy residents left the state and, in many cases, took their businesses with them. The study also showed, if further confirmation were needed, that the economies of states without estate taxes grew 50% faster, and created nearly twice as many jobs, than states with death taxes. ...

What most of the critics don't understand is that repeal of the estate tax ultimately means more tax dollars, not fewer. An Ohio study calculated that eliminating the federal estate tax would boost state and local tax revenues by approximately $9.3 billion annually. With Ohio business owners now able to focus their energy and resources on growth and success, rather than on the survival of their businesses after they die, we can expect them to invest more money in those 200,000 businesses, hire more workers, and increase purchases-all of which will help increase the tax base.

Ohio's repeal of its estate tax, after nearly 120 years, may not lead to an avalanche of repeal activities around the country, but it's already having a positive effect. Last month, for example, Maine lawmakers doubled their estate tax exemption to $2 million from $1 million. Oregon lawmakers rejected a proposal to increase their estate tax, as did North Carolina. Momentum is moving in the right direction. State governments may need tax revenue, but they don't need taxes that destroy wealth and drive away job-creating business owners.

View more information from Marc J. Soss at Florida Estate Planning and Florida Wills & Trusts.   Marc Soss' practice focuses on estate and tax planning; probate and trust administration and litigation; guardianship law; and corporate law in Southwest Florida.  Marc is a frequent contributor to LISI and has published articles and been quoted in the Florida Bar, Rhode Island Bar, North Carolina Bar, Association of the United States Navy, Lawyers USA, Military.Com, Forbes.Com, and CNN Business. Marc also serves as an officer in the United States Naval Reserve.

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