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Haslam signs bill to kill ‘death tax’
Governor visits Gibson Farmers Co-op member Tim Luckey’s farm to make legislation official
| Story and photos by Claire Sellers |
7/2/2012 |
With six generations of agricultural history, the Luckey farm in Gibson County was a logical location for Tennessee Gov. Bill Haslam to ceremoniously sign legislation that phases out the state’s inheritance tax — or “death tax” — that has threatened the ability of heirs to carry on their family’s farming tradition.
“This couldn’t be a more appropriate time or place to sign this bill,” said Haslam as he emphasized the importance of this tax reform to Tennessee farmers. “The Luckeys are the perfect example of what we are trying to do — encourage farmers to keep agriculture in the family. It’s who we are as Tennesseans.”
His sentiments were echoed by Tim Luckey, who currently runs the family’s Humboldt farm that was established by his great-grandfather, John Henry, in 1908.
“This is a big day for the state of Tennessee,” said Luckey, a Gibson Farmers Cooperative member. “From family farms to small businessmen, this legislation affects us all. Property values are appreciating so fast in this area that farmers are land-rich and money-poor. This will really help those who have accumulated something to pass it on to the next generation.”
Tennessee is among only eight states that impose a separate tax on a deceased person’s property that has to be paid by the heirs. This “death tax” often hits farm families the hardest, said Haslam, since agricultural investments are usually in land and equipment rather than large amounts of cash.
With the final passage of the bill by state legislators in April, Tennessee’s inheritance tax will be phased out over the next four years by increasing the exemption level to $1.25 million in 2013, $2 million in 2014, and $5 million in 2015 and eliminating the tax altogether in 2016.
“This bill isn’t just about protecting a few wealthy people who have assets,” said Haslam. “It’s about protecting the family farms that we want to leave here in Tennessee. This piece of legislation is long in coming, but I’m so glad that it is finally here.”
Local officials on hand for the bill-signing ceremony were also appreciative of the tax reform measure, which will impact many residents of the agriculture-rich area. In fact, Gibson County paid more in inheritance tax last year than nearly any other West Tennessee county due to its abundance of family-owned farms.
“Having grown up on a farm, I know how important it is to protect the integrity and sovereignty of the family farm,” said Gibson County Mayor Tom Witherspoon. “We can explore other options to create revenue that make more sense than taxing the dead.”
“It’s a great thing for agricultural landowners to be able to keep what they have worked their lives for,” added Shawn Wortman, Gibson County Farm Service Agency director. “It means their heirs won’t have to sell the property just to pay the tax.”
The governor added that phasing out the death tax not only benefits farmers but also the state’s economy as a whole.
“The inheritance tax is causing Tennesseans to take their capital to other states as they grow older, but businesses and farms can’t pick up and leave,” said Haslam. “Ending the inheritance tax will encourage capital to stay in Tennessee and ease the burden on family businesses and farms that are left to other generations.”
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