PA House advances bill to eliminate inheritance tax for children, allow other tax exemptions

The Pennsylvania House of Representatives recently approved legislation that would eliminate the inheritance tax for children under the age of 21 and allow other tax exemptions as part of the 2019-20 state budget.

“When tax revenues are up, then I think the government should give the taxpayers their money back. I am glad that my tax repeal bill is going to that,” Rep. Carl Walker Metzgar’s (R-Bedford/Somerset), who authored the bill, said.

The bill now heads to the governor’s desk for signature.

House Bill 262 would eliminate the inheritance tax on transfers of property from a parent to a child age 21 or younger upon the death of a parent. Metzgar noted that he plans for this bill to be the first step of eliminating the inheritance tax.

The bill was also amended to include other tax exemptions.

The bill would eliminate the “taproom tax” on small breweries. The tax, announced under the Pennsylvania Department of Revenue’s recent state tax bulletin, would require breweries that sell beer directly to consumers in their tasting rooms and retail storefronts to issue the six percent state sales tax at the point of sale. Under H.B. 262, a standard formula of applying the six percent tax at 25 percent of the retail value would be used.

The bill would also exempt volunteer fire departments from having to collect and remit sales tax when selling food and beverages for fundraising.

Additionally, it exempts the sales tax for building materials and supplies used for the construction or repair of agricultural animal housing facilities and creates an exclusion of the Realty Transfer Tax of real estate subject to an agricultural conservation easement established under the Agricultural Area Security Law to a qualified beginning farmer.