Legislation Introduced to Change Illinois Estate Tax

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Published on February 1 2024 5:52 am
Last Updated on February 1 2024 6:41 am

BY ERIN M. HENKEL FarmWeek

New bipartisan measures aimed at ensuring the preservation of family farms in the event of a family member’s death were announced Wednesday after years of attempting to reform the Illinois Estate and Generation Transfer Tax Act.

Supported by Illinois Farm Bureau, Senate Bill 2921, introduced by State Sen. Dave Koehler, D-Peoria, and House Bill 4600, introduced by State Rep. Sharon Chung, D-Bloomington, are identical bills that if passed would change the state’s estate tax, specific to farms. The measures are aimed at addressing the discrepancy between escalating farm estate evaluations and annual farm income.

“This is a historic day, we’ve got some legislation before us that really is long overdue,” Koehler said during a press conference at the Illinois Farm Bureau headquarters in Bloomington. “This is an industry that is made up of family farms … 96% of farms are family farms, so why would we risk that from being upset by people having to sell the farm to pay their estate tax.”

Chung said after a fall spent on combine rides with farmers, she learned the estate tax is a top concern.

“We’re really doing this to help bring a lot of relief to family farms and make sure that family farms stay within families,” Chung told RFD. Currently, any estate in Illinois with a gross value of $4 million after inclusion of taxable gifts, is taxed in its entirety using a complex formula and is subject to a graduated state estate tax.

Rep. Charlie Meier, R-Okawville, a working farmer, shared examples of how the tax has impacted his own farming community. "For decades I have watched family farms get sold because they have to pay an inheritance tax. ... People think we are rich because we have this huge asset of farmland," he said. "That's not farmland to us, that's a member of our family. That member of our family has taken care of our family for generations. ... That's what this bill is about — future generations being able to farm that land, keeping America the cheapest fed nation in the world and keeping the family farm going."