Estate tax bill clears House committee

Republicans repeatedly called the levy a “death tax,” saying it unfairly punishes farm and small-business owners who have passed down wealth generation after generation.

House Majority Leader Edgar Starnes said the tax “punishes productivity.”

“We’ve got people who have worked all their lives to build up a business or a farm,” Starnes said. “They wanted to have something to leave to their children. Why do we want to punish people who are just trying to save something?”

State law exempts the first $5.25 million of the estate of someone who dies, just like the federal estate tax. Repealing the state's tax would cost $52 million during the next fiscal year.

Senate President Pro Tem Phil Berger told the North Carolina Chamber on Tuesday that his idea of fair tax reform also would include repealing the estate tax.

However, a repeal of the estate tax was not included in the tax reform outline floated in December by Sen. Bob Rucho, R-Mecklenburg, the chamber's senior finance chairman.

Starnes, R-Caldwell, said after the meeting that the bill faced one of two possible paths forward. It could be rolled into the budget and pass as part of a larger tax and spending package, or it could come out of committee as a separate bill.

"I'm proud that we're eliminating the estate tax, and I think there are number of members who would like to have their vote recorded as eliminating the death tax," Starnes said. "The decision on which path the bill will take will be made by House Speaker Thom Tillis."