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Indiana Senator Pushes To Eliminate State Inheritance Tax

An Indiana senator wants to do away with the state's inheritance tax entirely, which mostly goes toward the General Fund.

Indiana cemetery

Photo: Jim Grey (Flickr)

The inheritance tax, which is taken from people passing wealth on to their successors, has collected $170 million dollars in the past five years.

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.

Brandon Smith

Brandon Smith has previously worked as a reporter and anchor for KBIA Radio in Columbia, MO, and at WSPY Radio in Plano, IL as a show host, reporter, producer and anchor. Brandon graduated from the University of Missouri-Columbia with a Bachelor of Journalism in 2010, with minors in political science and history. He was born and raised in Chicago.

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