Paying local, state, and federal taxes is part of being a responsible business owner and citizen. But should you be taxed after you die? More importantly, should your family have to sell your business to pay a Death Tax?
America's international auto dealers are constantly in danger of losing their family businesses as a result of the federal estate tax, more appropriately called the Death Tax. Not only does the Death Tax tax earnings twice – once while living and once upon death – it penalizes entrepreneurs for establishing a successful business and discourages others from ever establishing businesses that would bolster local economies. AIADA remains committed to supporting the full permanent repeal of the federal Estate Tax due to its chilling effect on economic activity and the distress it places on family-owned dealerships. In December 2012 an important Estate Tax relief agreement was negotiated and became part of H.R. 8, the American Taxpayer Relief Act of 2012. That legislation permanently set estate tax parameters at a $5 million exemption level, permanently indexed to inflation; a 40 percent top rate; and spousal transfer or portability. The passage of H.R. 8 means that there is certainty in the tax code with respect to the Estate Tax for the first time in 12 years. AIADA views this agreement as an important step forward but the ultimate goal remains a full repeal of the Estate Tax.
Key provisions of current law include:
Currently, the 2014 Estate Tax parameters are a 40% top tax rate and a $5.34 million exemption.
AIADA tackles the Death Tax and other serious tax issues every year in Washington. We are dedicated to ensuring that dealers are given an opportunity to grow their businesses, strengthen their communities, and, one day, pass their legacy on to the next generation. Small businesses keep the American economy running. Taxing them into bankruptcy hurts us all.
Dealer Principal, Acura of Glendale
"The Death Tax places local, family owned businesses like mine at Acura of Glendale in a very precarious position – liquidating 55 percent of my small business is not a viable option."
FBETC Letter to Sen. Thune Supporting Permanent Repeal of the Estate Tax