The new Minnesota state budget takes steps to reduce the severity of the state inheritance or estate tax, one that exists alongside the federal estate tax. Included in the new budget is an increase in the estate tax exemption from $1.8 million to $2.1 million, effective immediately and retroactive to January 1, according to Forbes. The budget also stipulates the exemption will increase each year, up to $3 million in 2020.
The increased exemption level might seem like a drop in the bucket for those affected, but as the estate tax brings in less and less money, lawmakers will have an easier time eliminating the tax altogether.
The Governor initially vetoed an earlier budget including further tax breaks, but signed this version while expressing his opposition in a letter, claiming the greater exemptions won’t significantly impact small businesses.
NFIB has long opposed the estate tax and is a co-leader of the Family Business Estate Tax Coalition dedicated to a full repeal of the estate tax. NFIB’s research suggests that 34 percent of NFIB members have incurred expenses to protect their heirs from estate tax liability, and an additional 15 percent expect to do so soon.
