NFIB Illinois submitted written testimony to the Illinois House Revenue & Finance Committee in support of providing death-tax relief to family-owned businesses.

Illinois is one of only twelve states that assess an estate tax on residents. Only five have lower thresholds for applying the estate tax on decedents’ property.

The letter points out:

“Illinois’ current estate-tax exemption is less than one-third of the federal exemption of $13.99 million and hasn’t been updated for over a decade despite inflation and climbing asset valuations. In purchasing power, the exemption declines every year due to inflation. This low exemption puts many small, family-owned businesses and farms at risk.”

Read the letter below:

To: The Honorable Members of the House Revenue & Finance Committee

From: Noah Finley, NFIB Illinois State Director

Date: February 17, 2025

Subject: Support Estate-Tax Relief for Family-Owned Businesses & Farms

NFIB urges you to support family-owned businesses by raising the state estate-tax exemption.

Illinois is one of only twelve states with estate taxes. And, of the twelve states with estate taxes, only five have lower estate-tax exemptions.

Illinois’ current estate-tax exemption is less than one-third of the federal exemption of $13.99 million and hasn’t been updated for over a decade despite inflation and climbing asset valuations. In purchasing power, the exemption declines every year due to inflation. This low exemption puts many small, family-owned businesses and farms at risk. These family-owned enterprises often lack ready cash to pay estate taxes, forcing them to take on expensive loans or to liquidate essential equipment, land, or even the business itself upon the death of a parent or grandparent to pay the taxes. The resulting sales hurt Illinois’ small-business community and could reduce local ownership of Main Street businesses and farms.

On top of the financial burden imposed by the death tax on family-owned businesses, the complexity of the tax forms and paperwork is itself an onerous burden for family members grieving the death of a loved one.

Due to the burden the estate tax imposes on Illinois’ small-business community, it is unsurprising that 81% of NFIB’s small-business respondents supported an increase to the state’s estate-tax exemption in 2024.  

It is time for Illinois to take action to preserve Main Street businesses. The Illinois General Assembly can protect the state’s family-owned businesses by aligning Illinois’ estate-tax exemption with the federal exemption.

Thank you for your support of Illinois’ small-business community.