Minnesota’s estate tax exemption will undergo changes in 2017, according to Forbes. It was $1.6 million in 2016 but will rise to $1.8 million this year.
“Minnesota is way out of conformity with the federal estate tax exemption,” says NFIB/MN State Director Mike Hickey. “We are at $1.8 million exemption per person and the federal is $5.45 million. We are phasing into a $2 million per person and most couples double the exemption.”
The article also notes “the higher the exemption amount, the fewer estates subject to tax.”
Hickey hopes this is something that will be dealt with during the 2017 legislative session.
“Finally conforming Minnesota’s estate tax exemption to the federal is a top agenda item,” he says. “This is critical for family-held businesses and farms to be able to transition their business or farm to other family members and not feel the harmful bite of the estate tax.”
Work already is being done to combat this. The House tax committee has begun examining policies to adjust the state estate tax, including a proposal to get rid of it, Minnesota Public Radio reports.
Rep. Joe McDonald (R-Delano), the repeal bill’s chief author, weighed in on people leaving the state to dodge the tax. “[Minnesotans] could put up with the cold. They’re not wussies. We here in Minnesota are pretty tough,” he said. “They moved out because they can save their families and their generations of families a lot of money from the government extracting through coercion and taking it from the death tax.”
As small business owners, NFIB members know all too well this struggle.
“Our members are forced to purchase excessive amounts of life insurance or set up trusts that generally people of their means would not need to do, all due to the worries of the estate tax and how to cope with it when the death finally comes in the family,” Hickey says.
Only 14 states and the District of Columbia still impose estate taxes, according to Hickey.