There is a bipartisan effort in Illinois aimed at preserving family farms in the event of a family member’s death.
The Family Farm Preservation Act in House Bill 4600 is designed to protect farm families and their land by updating the Illinois Estate Tax code to include protections in regards to inflation. Proponents say some families were forced to sell off some or all of the family farm to pay the estate tax.
“Hardworking farmers in our community and all across Illinois are facing enormous economic challenges right now and it is not the time to add to that with overbearing taxes,” said state Rep. Sharon Chung, D-Bloomington.
If approved, the legislation would reform the current state tax for farm estates only, by changing the tax exclusion with only dollars over $6 million to be taxed under the exemption. The current threshold is $4 million.
The bill also contains provisions for inflation and tie the exemption amount to annual changes in the Consumer Price Index. The changes would only apply to estates eligible for agricultural special use valuation under federal rules.
Brian Duncan, president of the Illinois Farm Bureau, said a death of a loved one should not be a death sentence for the family farm.
“If a family is forced to sell part of that asset, then their farm is no longer viable and no longer can support the families,” said Duncan. “Then once it loses its viability, it will be sold and forced into consolidation.”
Duncan adds that 96% of Illinois farms are owned by families.
“The estate tax has devastated family farms for decades as these farms are often sold to pay the inheritance tax,” said state Rep. Charlie Meier, R-Okawville. “Improving estate tax exemptions for farmers will help save family farms when the farm is passed down to each generation.
