Photo: Jim Grey (Flickr)
An Indiana state senator is pushing to eliminate the state’s inheritance tax, which is levied on people who inherit money or property. Spouses and charitable organizations are exempt in Indiana. Columbia City Republican Senator Jim Banks wants to do away with the tax entirely.
Over the last five years, Indiana has received an average of nearly $170 million in inheritance tax revenue. About 92 percent of that goes to the state General Fund with the counties sharing the rest. Banks says he is not worried about having to replace the lost revenue.
“I think it would be a net gain for the tax coffers of our state because it would incentivize individuals with wealth to keep their wealth here,” he says.
Senate Appropriations Committee Chair Luke Kenley says he has not seen any data showing him the state will not lose revenue. Though he is in favor of eliminating the tax, he says the state must find a way to make up for the potential loss.
“An easy replacement for that would be if we could capture the sales tax that’s already due on the internet sales, I think we could help Senator Banks get across the finish line there,” he says.
Kenley has said making sure Internet sales are taxed is something the federal government must take the lead on, not the states.