A midstate lawmaker has proposed eliminating the Pennsylvania inheritance tax on family-owned businesses because it can force heirs to liquidate assets or the entire enterprise when a principal owner dies.
State Rep. Stephen Bloom, R-Cumberland County, has introduced House Bill 2639 to eliminate the tax on such assets when they are transferred in the event of death to other family members, he said in a news release.
The "Mom-and-Pop shop" bill is in response to recommendations for encouraging manufacturing-sector growth in Pennsylvania that came from the Gov. Tom Corbett administration's Manufacturing Advisory Council, according to Bloom.
Family businesses are critical to the state's economic future, Bloom stated in the release.
The legislation requires that assets be devoted to the same business for five years after the death and be wholly owned by members of the same family prior to the transfer, according to a copy of the legislation last week.