Bipartisan group of state lawmakers propose estate tax reform for Illinois family farms

SPRINGFIELD, Ill. (WAND) — Lawmakers and farmers have talked for years about the challenges families face when they have to pay the Illinois farm estate tax. A bipartisan group of state lawmakers have introduced a plan to protect farmers and ensure families can keep their land.

Agriculture is a driving force behind the Illinois economy, and farm families produce 96.5% of the agricultural products sold across the state. Yet, the Illinois estate tax often forces families to sell part of their business every generation.

"All of us who are farmers know of someone in their neighborhood, in their county, or even in their own family that has had to sell part of the business to meet the estate tax obligation," said Illinois Farm Bureau President Brian Duncan.

Democrats and Republicans hope to pass a plan this spring to ensure hardworking families can continue their legacy without the burden of this excessive tax.

"Under current laws, any estate that is valued over $4 million, the entire estate is subject to the estate tax," said Rep. Sharon Chung (D-Bloomington). "So, under the Family Farm Preservation Act that we are introducing, only the dollars above $6 million will be subject to the tax for farm estates."

The bill also allows any unused exemption amount to be transferred to a surviving spouse. Sponsors said this legislation could also bring the Illinois tax roughly in line with the federal estate exemption.

"People think we are rich because we have this huge asset of farmland," said Rep. Charlie Meier (R-Okawville). "But 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. And we want to make sure it's there for future generations." 

The measure also addresses inflation and allows people to keep farms within their family. 

Of course, the big question lawmakers will need to answer is how much the change will cost the state. Sen. Dave Koehler (D-Peoria) said this will be a top priority during budget negotiations later this spring. 

"We'll calculate that and we'll figure out what the price tag is," Koehler explained. "I think it will be actually lower than people think. We intend to take this all the way because this is a bill that affects too many Illinois families."

Koehler noted that sponsors will educate colleagues from Chicago and the suburbs so they can understand the magnitude of the proposal.

Lawmakers could discuss the Family Farm Preservation Act when they return to Springfield next week. The General Assembly will be in session February 6-8 before having another week off.

"Far too often, small-to-mid-sized family farms are forced to sell land that has been in their family for generations just to merely settle their estate taxes," said Sen. Sue Rezin (R-Morris). "Through this bipartisan proposal, we can help ensure that more family farms remain within their families." 

Copyright 2024. WAND TV. All rights reserved.