New Law Eliminates Inheritance Tax, Realty Transfer Tax on Family Farms

HARRISBURG – Senate Majority Leader Dominic Pileggi (R-9) and Senate Agriculture & Rural Affairs Committee Chairman Elder Vogel (R-47) announced today that Governor Tom Corbett has signed a new law exempting family farms from the inheritance tax and the realty transfer tax.

“Too many families have been forced to sell their farms in order to pay onerous death taxes,” Senator Pileggi said. “This new law will allow farmers to continue working their land for generations to come, supporting Pennsylvania’s agricultural heritage and preserving threatened open space.”

“This legislation is about furthering opportunity in Pennsylvania for our young farmers, an opportunity to stay in the business of agriculture. The costs, challenges and regulation of the agriculture industry have already resulted in our youth not returning to the farm,” said Senator Vogel, a fourth-generation dairy farmer. “Eliminating this costly tax burden on farm families provides a great incentive for them to continue farming for generations.”

The new law excludes family farms from the inheritance tax if a farm is transferred to members of the same family. It also clarifies that the realty transfer tax does not apply to the transfer of a family farm to members of the same family.

The change was strongly supported by the Pennsylvania Farm Bureau and the Pennsylvania State Grange.

“The exemption from the state inheritance tax on working farms is a major victory for Pennsylvania farmers. The viability of the family farm is threatened when farmers are forced to sell off assets or farmland to pay off inheritance taxes. The new exemption will relieve this stress and make transitioning on the farm much easier,” said Carl T. Shaffer, president of the Pennsylvania Farm Bureau. “Senator Vogel’s and Senator Pileggi’s leadership on advancing the inheritance tax exemption for Pennsylvania’s farm families is greatly appreciated by Pennsylvania Farm Bureau. This is a landmark achievement and will go far in helping to preserve the future of production agriculture as a leading generator of economic activity in the state.”

“The Pennsylvania State Grange is delighted that the Legislature passed HB 761 eliminating inheritance tax for family farms passing to family members and remaining in agriculture,” said Betsy Huber, legislative liaison for the Grange. “Our members adopted policy in 1973 asking for this, and we are so happy that it is finally accomplished. We don’t know how many acres of farmland could still be producing food today if the heirs had not been forced to sell some of the land to pay the death tax. Our fertile farmland is one of Pennsylvania’s greatest resources and this is one way of preserving it for future generations. We thank the Legislature and Governor Corbett for taking this important step that will benefit our farm families.”

These initiatives were first advanced earlier this session in Senator Pileggi’s Senate Bill 746. House Bill 761, which was amended by the Senate to include the family farm provisions, was signed into law by Governor Corbett yesterday. Senator Pileggi and Senator Vogel shepherded HB 761 through the Senate and strongly advocated for its passage.


Erik Arneson
(717) 787-4712

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