By SEMA Washington, D.C., Staff
The U.S. House of Representatives passed legislation to repeal the estate tax, which impacts an estimated 5,500 families including many small-business owners. The bill would also reduce the top tax rate that is applied to gifts over $500,000 to 35%. Currently, the highest gift tax rate is 40%. A companion bill has been introduced in the Senate but no action is expected in the near term. However, the issue could become a component of comprehensive tax reform legislation that the Senate is currently seeking to address.
In 2012, Congress passed a compromise bill to lower the estate tax rate to 40% with a $5 million per person exemption (tied to inflation). If unable to permanently repeal the tax altogether, lawmakers may be willing to increase the exemption and reduce the tax rate.
For more information, contact Eric Snyder at erics@sema.org.