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The estate tax is imposed on a decedent’s estate, like a family
farm, before distribution to heirs. As a result, beneficiaries
typically sell off parts of the farm or incur tremendous debt to
pay the tax.
“The state of Illinois is one of only 12 states that has an
estate tax so these young families and kids that one day want to
take over the family farm, they’re greatest hurdle is the
regressive estate tax,” said state Sen. Andrew Chesney,
R-Freeport, during Ag Day at the State Capitol.
Chesney is calling for the passage of legislation that would
raise the threshold exemption for paying the tax to $6 million
from $4 million. One measure, House Bill 2677, also provides for
a special use valuation to provide that the value of the
qualified farm property shall be calculated without regard to
certain limitations under the Internal Revenue Code. The
Illinois Farm Bureau is supporting the legislation.
Gov. J.B. Pritzker said any changes to the estate tax would
create a hole in the state budget.
“A few hundred million dollars of revenue to the state so if
he’s able to come with his ideas about how to pay for it, then
we ought to talk about it,” said Pritzker.
Reforming Illinois’ estate tax is not a new notion. In 2023,
state Sen. Jil Tracy, R-Quincy, introduced legislation that
would have amended the Illinois Estate and Generation-Skipping
Transfer Tax Act to eliminate the state estate tax for persons
dying on or after the effective date of the new law or for
transfers made on or after the effective date. The measure never
advanced out of committee.
Brian Duncan, president of the Illinois Farm Bureau, said 96% of
farms in the state are family-owned and raising the estate tax
threshold would help keep that intact.
“Passing on the family farm is not just about continuing the
business, it’s about preserving family heritage and a way of
life,” said Duncan.
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