Posted on January 22, 19100 at 08:27:06:
A small step towards tax relief
By Maryland Senator Roy Dyson
This year, the General Assembly seems poised to pass, and the governor ready to sign into law Senate Bill 1. This piece of legislation will provide much needed relief from the dreaded “inheritance tax.”
The bill has the backing of the Senate President as well as the Senate’s Finance Committee Chairman. Both are primary sponsors of this legislation. To avoid having to kick in a mandated 10 percent state income tax relief earlier than he’d like, Governor Glendening seems poised to support this legislation. Republican lawmakers, the majority of the General Assembly, are sure to be thrilled that two prominent Democratic Senators and a Democratic governor are supportive of a tax cut.
Of course all of this is being made possible because Maryland is blessed to have nearly a billion dollar surplus and there doesn’t seem to be a slowing down of our thriving economy.
Even supporters of the tax and spend way of doing business realize some sort of tax relief in these booming economic times is the right political thing to do. Consumers who are spending more to help this economy flourish, deserve a financial break -- like using a coupon at a store.
Senate Bill 1 provides for a decedent’s direct beneficiary or beneficiaries to be exempt from the inheritance tax. A direct beneficiary, according to this legislation, is a decedent’s grandparent, parent, spouse, child or other lineal descendant, stepparent, stepchild or spouse of a child or other lineal descendent. This will apply to a decedent’s death after July 1, 2000. The bill, however does not cover the collateral inheritance tax which includes a decedent’s brother, sister or friend for example.
This bill will not only give direct beneficiaries of the deceased much-needed tax relief, it will also help to change -- for the better -- Maryland’s extremely complicated tax laws. For years, register of wills throughout the state have complained about the “administrative nightmare,” the inheritance tax is for their staffs. In 1999, $88 million in inheritance taxes and the fees for staff to figure out the tax and levy it were collected by register of wills offices in Maryland. Overall, it cost staff fees of $16 million in Maryland’s 24 jurisdictions.
By starting to wipe out the direct inheritance tax, the state will not have to incur about a quarter of that amount in staff fees.
For years, Marylanders’ direct descendants have had to endure the double whammy of paying for land and other valuable assets they receive from their departed loved ones and also having to endure a bureaucratic mess of red tape because of the complicated law.
So, while we’re not giving Marylanders as much of a break from their tax burden as I’d like in these great financial times, I’ll settle for this first small, but significant step towards tax and bureaucratic relief.