Amendment #695 to H4000
Exempting farms/small businesses from Inheritance Tax
Representatives Diehl of Whitman, Lombardo of Billerica, Cole of Peabody, Dooley of Norfolk and Garry of Dracut move to amend the bill by inserting the following Section:-
Section XX. Section 2A of Chapter 65C of the General Laws is hereby amended by inserting the following sections:-
(f) All farmland included as part of an estate for purposes of this section and utilized by the executor, administrator, heir-at-law, beneficiary or trustee as farmland, shall be appraised at its use value according to applicable federal and state law and not at its full and fair cash value.
(g) (1) For decedents whose death occurs on or after January 1, 1992, but prior to January 1, 2002, a tax is imposed upon the transfer of the net estate of every resident or nonresident decedent as a tax upon the right to transfer. The tax is a sum equal to the maximum credit for state death taxes allowed by 26 U.S.C. section 2011.
(2) For decedents whose death occurs on or after January 1, 2002, but prior to January 1, 2010 a tax is imposed upon the transfer of the net estate of every resident or nonresident decedent as a tax upon the right to transfer. The tax is a sum equal to the maximum credit for state death taxes allowed by 26 U.S.C. section 2011 as it was in effect as of January 1, 2001; provided, however, that the tax shall be imposed only if the net taxable estate shall exceed six hundred seventy-five thousand dollars ($675,000). Any scheduled increase in the unified credit provided in 26 U.S.C. section 2010 in effect on January 1, 2001, or thereafter, shall not apply.
(3) For decedents whose death occurs on or after January 1, 2010, a tax is imposed upon the transfer of the net estate of every resident or nonresident decedent as a tax upon the right to transfer. The tax is a sum equal to the maximum credit for state death taxes allowed by 26 U.S.C. section 2011 as it was in effect as of January 1, 2001; provided, however, that the tax shall be imposed only if the net taxable estate shall exceed eight hundred and fifty thousand dollars
($850,000); provided, further, beginning on January 1, 2011 and each January 1 thereafter, said amount shall be adjusted by the percentage of increase in the Consumer Price Index for all Urban Consumers (CPI-U) as published by the United States Department of Labor Statistics determined as of September 30 of the prior calendar year; said adjustment shall be compounded annually and shall be rounded up to the nearest five dollar ($5.00) increment.; provided, that for any small business as defined by 26 U.S.C. 1 et seq., or any farm located within the state of Massachusetts, the first five million dollars ($5,000,000) in value shall be excluded from computation. Any scheduled increase in the unified credit provided in 26 U.S.C. section 2010 in effect on January 1, 2003, or thereafter, shall not apply.
(b) If the decedent's estate contains property having a tax situs not within the state, then the tax determined by this section is reduced to an amount determined by multiplying the tax by a fraction whose numerator is the gross estate excluding all property having a tax situs not within the state at the decedent's death and whose denominator is the gross estate. In determining the fraction, no deductions are considered and the gross estate is not reduced by a mortgage or other indebtedness for which the decedent's estate is not liable.
(c) (1) The terms "gross taxable estate", "federal gross estate" or "net taxable estate" used in this chapter or chapter 23 of this title has the same meaning as when used in a comparable context in the laws of the United States, unless a different meaning is clearly required by the provisions of this chapter or chapter 23 of this title. Any reference in this chapter or chapter 23 of this title to the Internal Revenue Code or other laws of the United States means the Internal Revenue Code of 1954, 26 U.S.C. section 1 et seq.
(2) For decedents whose death occurs on or after January 1, 2002, the terms "gross taxable estate" "federal gross estate" or "net taxable estate" used in this chapter or chapter 23 of this title has the same meaning as when used in a comparable context in the laws of the United States, unless a different meaning is clearly required by the provisions of this chapter or chapter 23 of this title. Any reference in this chapter or chapter 23 of this title to the Internal Revenue Code or other laws of the United States means the Internal Revenue Code of 1954, 26 U.S.C. section 1 et seq., as they were in effect as of January 1, 2001, unless otherwise provided.
(d) All values are as finally determined for federal estate tax purposes.
(e) Property has a tax situs within the state of Massachusetts:
(1) If it is real estate or tangible personal property and has actual situs within the state of Massachusetts; or
(2) If it is intangible personal property and the decedent was a resident.
SECTION 2. This act shall take effect upon passage.