A bipartisan group of Illinois lawmakers that includes Sen. Mike Halpin, R-Rock Island, is urging colleagues in the General Assembly to back a measure that would reduce the state’s estate tax burden on family farms.
The Family Farm Preservation Act (Senate Bill 2921) is designed to protect farm families and their land by updating the Illinois Estate Tax code to include inflationary protections. That’s according to the Illinois Farm Bureau and lawmakers, including Mr. Halpin, who hosted a Wednesday, Jan. 31, news conference to tout Senate Bill 2921. The group also highlighted the identical House Bill 4600. The act awaits debate in the spring legislative session.
Illinois currently has a graduated estate tax that tops out at 16%. But the tax only applies to estates worth more than $4 million. This bill would raise the estate tax exemption to $6 million, thus reducing the tax burden for Illinois family farms.
The bill is sponsored in the Senate by Sen. David Koehler, D-Peoria. “In many instances, families have to sell their land after the loss of a loved one simply because it’s too expensive,” Mr. Koehler said in a news release. “This will give families the opportunity to continue passing down their farm from generation to generation.”
House sponsor Rep. Sharon Chung, D-Bloomington, said in addition to accounting for inflation, the proposed $2 million bump in the estate tax exemption also would bring Illinois more in line with the federal estate tax rules. Those federal rules set the farm estate tax exemption at $13.61 million for individuals.
Easing farmers’ burden
Proponents say the bipartisan legislation introduced in both chambers of the Illinois General Assembly will reduce estate tax burdens for family farmers.
“The Family Farm Preservation Act addresses reoccurring issues for farmers under the current estate tax system — from farmers having to sell their land to breaking up the family agribusiness in order to keep up with these hefty taxes,” Mr. Halpin said.
“Family-owned farms across Illinois contribute to the success of our state’s agricultural powerhouse, and alleviating unnecessary financial burdens allows them to continue their valuable service,” he said.
There’s more than money at stake, according to Illinois Farm Bureau President Brian Duncan.
“Passing on the family farm is not just about continuing the business, it’s about preserving family heritage and a way of life,” he said in the release.
“Yet the current Illinois estate tax often forces families to break up the farm by selling land, livestock or even equipment every time the business passes on to the next generation. A death of a loved one should not be a death sentence for the family farm.”
