It is now official: Ohio officially abolished its estate tax when Republican Governor John Kasich signed the state budget today (June 30, 2011). The estate tax provision of the new law does goes into effect on January 1, 2013.
This cliffhanger is reminiscent of the federal estate tax law change that eliminated the federal estate tax for just one year in 2010. The federal estate tax came back Jan. 1, 2011, albeit with a generous individual exemption of $5 million. The Ohio estate tax repeal is intended to be permanent, once it becomes effective. In other words, it does not "expire" or "sunset," and will remain the law unless changed by a future Ohio legislature and Governor.
“By repealing this suffocating tax, Gov. Kasich and the Ohio legislature have made their state stronger – and made it a model for the remaining 21 other states who continue to impose state estate or inheritance taxes, including three of Ohio’s neighbors: Indiana, Kentucky, and Pennsylvania,” says Dick Patten, president of the American Family Business Institute, a no-death-tax lobbying group.
For a map showing state estate taxes and rates for 2011, click here.
For the years 2011 and 2012, Ohio remains as one of 22 states that along with the District of Columbia currently have estate and/or inheritance taxes. Among estate tax states, Ohio currently has the lowest exemption amount per estate, just $338,333, but the lowest top rate at 7%.
Once the Ohio repeal becomes law, New Jersey will have the distinction of being the state with the lowest estate exemption at $675,000.
For more information on the efforts of other state legislatures to minimize estate taxes, click here.
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