Senate OKs watered-down estate tax rollback

By BOB LEWIS
AP Political Writer

RICHMOND, Va. -- A partial repeal of the tax paid posthumously on the estates of the wealthy won passage comfortably Friday in the Senate.

By a 35-4 vote, the Senate approved eliminating the tax on Virginia estates worth less than $10 million, or on working farms or closely held businesses of any value.

The bill advances to the House, which passed a full estate tax repeal on 93-7 vote earlier this month. That measure is now before the Senate Finance Committee.

Differences between the two bills are likely to be resolved by a conference committee in the closing days of this year's legislative session.

The Senate bill would affect only the estates of Virginians who die on or after Dec. 31. The Department of Taxation estimates annual revenue losses will grow from nearly $52 million a year beginning in 2007 and to about $101 million by fiscal year 2011.

In recent years, efforts to roll back the estate tax have died in the Senate. Advocates for the complete elimination of what they call "Virginia's onerous death tax" said the Senate's partial repeal is the "first forward step in nearly three years."

But the nonprofit Virginians for Death Tax Repeal said Sen. Thomas K. Norment's bill falls far short of their goal of the full repeal of the tax.

"The legislation, while flawed with certain restrictive limitations, provides a vehicle for eventual repeal of the death tax in Virginia," the group said in a news release.

In 2005, estate tax returns were filed on 871 estates, yielding $138 million in revenue, according to the Tax Department. Only 14 returns were from estates with taxable value of $10 million or more, but those estates accounted for revenues of $45.6 million, or nearly one-third of the total estate taxes collected.
Bob Lewis has covered Virginia government and politics since 2000.