By CELESTE BAUMGARTNER
Ohio Correspondent

COLUMBUS, Ohio — Ohio’s estate tax will end Jan. 1, 2013; it was abolished through provisions of the new, almost $56 billion biennial state budget passed by the Ohio General Assembly and signed by Gov. John Kasich.

Sixteen states, including Ohio, had an estate tax and several others levy some type of inheritance tax, said Beth Vanderkooi, the Ohio Farm Bureau Federation’s director of state policy. There was an exemption for the first $335,000 in the estate.

Of all the states that have an estate tax, Ohio’s exemption was the lowest. Most were in the millions. “The concern that we always have with the estate tax is that it becomes very onerous on farms and small businesses which tend to be capital-intensive and have less cash on hand,” Vanderkooi said. “The estate tax can be a real burden and a real obstacle to passing on a family farm or family business.”

The estate tax may burden a family to the point that in order to pay the tax bill, they have to sell machinery, equipment or land, or they have to take out a loan in order to pay the estate tax which they then have to repay with interest, she said.

“Also, anecdotally, we know that a lot of people of good means leave the state because they can transfer their residency somewhere else that does not have an estate tax,” she said. “They take with them not only their estates, but their charitable works, their job creation. Of course, it is not as easy to do that if you have a farm.”

About 2 percent of local governments in Ohio receive a significant amount of money from the estate tax, Vanderkooi said. Farm Bureau is encouraging its members to work closely with local officials to help identify either cost savings or reliable revenue, or ways local governments can share services to make up for those costs.

“But we also think that it’s almost impossible to plan a budget based on who is going to die during the year,” Vanderkooi said.

Elimination of the “death tax” has been a Farm Bureau priority for more than 25 years. It is a good example of the organization’s grassroots policy because every year members at its annual meeting complain the estate tax is a burden for their farms, she added.

“So, the elimination of the Ohio estate tax coupled with significant reform at the federal level which we’ve seen in the last year – we think that will be very valuable to keeping the next generation of family farmers here in Ohio,” Vanderkooi said.

Farm Bureau thanked Kasich and members of the General Assembly for their willingness to repeal the tax.