On May 31, the House Small Business Committee - Subcommittee on Economic Growth, Taxes and Capital Access held a hearing, "Planning for the Death Tax: Can Small Business Survive?" NFDA was asked to submit a written statement for the hearing record that outlined the concerns and problems family-owned funeral homes face in planning how to pay the estate tax and keep the business in the family.
In its statement, NFDA said:
"It is absolutely critical that the federal tax laws not penalize or otherwise prevent the tax-free transfer of family business ownership at death to other family members. Moreover, the thousands of dollars many funeral home owners spend annually in so-called estate planning to avoid the estate taxes or in the purchase of insurance policies to cover their potential estate tax liability could be better spent on business operations, salaries and other worker benefits and community outreach programs."
"The federal estate tax is a considerable financial burden to small, family-owned funeral homes as well as a significant inhibitor to future growth and expansion and even the existence and ownership of the funeral home."
"The estate tax is not an intellectual or theoretical exercise for our members. It is real and has serious and significant business as well as personal consequences. Funeral homes are among the quintessential community-rooted, family-owned businesses. They are the last of a slowly fading breed of entrepreneur whose survival is only made more difficult by the onerous estate taxes. In order to recognize and preserve the heritage and strength of this foundation of the American economic system, it is absolutely critical that the federal tax laws not penalize or otherwise prevent the tax-free transfer of family business ownership at death to other family members or otherwise inhibit the growth of their business."
"Therefore, on behalf of the thousands of family-owned funeral homes in America, we are asking Congress to make current law permanent, which would include an exemption level at $5 million (indexed for inflation) and the maximum estate tax rate of 35 percent. It is also important that Congress provides for spousal transfer of any unused portion of the exemption, and keeps stepped up basis as part of the law."
Click here to read the full statement. NFDA will keep you informed of its effort to minimize the impact of the estate taxes on family-owned funeral home.
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