Inheritance tax cut approved
Lawmakers passed a bill Feb. 11 that cuts inheritance tax rates on beneficiaries and increases the amount of property value that is exempt from the tax.
LB310, introduced by Elmwood Sen. Robert Clements, applies to estates of individuals who die on or after Jan. 1, 2023.
Under the bill, immediate relatives will pay inheritance tax on the clear market value of property over $100,000 received by each person, up from $40,000. The tax rate remains 1 percent.
The bill also decreases the rate from 13 to 11 percent for remote relatives and increases the exemption from amounts more than $15,000 to amounts over $40,000.
A third rate that applies to all other beneficiaries decreases from 18 to 15 percent, and the applicable exemption amount increases from $10,000 to $25,000.
Under LB310, any interest in property passing to beneficiaries younger than 22 is not subject to inheritance tax. The proposal also expands the definition of relatives for purposes of the inheritance tax to include certain step relatives.
Finally, the bill requires an estate’s personal representative, upon distribution of proceeds from the estate, to submit a report on inheritance taxes to the county treasurer in the county where the estate is administered. County treasurers then will compile and submit a report regarding inheritances taxes to the state Department of Revenue.
Senators voted 37-1 to pass LB310.