VIRGINIANS FOR DEATH TAX REPEAL
Death Tax Repeal -- At a Glance
- Virginia and the federal government currently tax estates valued at $1 million and above. The Virginia tax has a maximum marginal rate of 16%.
- Until passage of federal death tax repeal legislation, the Virginia tax did not affect the total amount of death taxes paid by Virginia estates. That is because taxpayers received a dollar-for-dollar credit on their federal returns for every dollar in Virginia death taxes they paid.
- In 2001, Congress voted to phase out both the federal credit for state death taxes and the federal death tax itself. Most states -- at least 32 of them at present -- are phasing out their state death taxes by the time the federal credit disappears in 2005. Repealing states include:
Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Louisiana, Maine, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nevada, New Mexico, North Dakota, Ohio, South
Carolina, South Dakota, Texas, Utah, Vermont, West Virginia, Wisconsin, Wyoming
- Virginians overwhelmingly want their state to join those repealing the death tax. According to a June 2002 survey, 82% of Virginia voters favor eliminating the state's death tax. (See details below.)
- Virginians for Death Tax Repeal is a 54-member statewide coalition dedicated to repeal of the death tax in Virginia. The still-growing coalition's members include:
60 Plus Association--American Family Business Institute--Arlington Taxpayers Alliance--Associated General Contractors of Virginia--Association for the Preservation of Virginia Antiquities, DSF Branch--Austin Brockenbrough & Associates--Brookneal Area Chamber of Commerce--Builders and Associates of Central Virginia--CatholicVote.org--Mid-Atlantic Cleaners Association--National Federation of Independent Businesses--National Grocers Association--National Taxpayers Union--Old Dominion Highway Contractors Association-Policy and Taxation Group--Proprietary Child Care Association of Virginia--Prince William Taxpayers Alliance--Retail Merchants Association of Greater Richmond--Car and Truck Rental & Leasing Association of Virginia--Virginia Aggregates Association--Virginia Association of Broadcasters-- Virginia Forest Products Association--Virginia Beach Taxpayer Alliance-- Retail Alliance of Hampton Roads--Chase Investment Counsel Group Home Builders Association of Richmond--Shenandoah Valley Builders Association--Southeastern Lumber Manufacturers Association--Virginia Automobile Dealers Association--Virginia Association of Roofing Contractors--Virginia Association of Towing and Recovery Operators--Virginia Club for Growth--Virginia Dairymen’s Association--Virginia Farm Bureau Federation--Virginia Funeral Home Directors Association--Virginia Hospitality and Travel Association--Virginia Independent Automobile Dealers Association--Virginia Petroleum, Convenience and Grocery Association--Virginia Retail Merchants Association--Virginia Road and Transportation Builders Association--Virginia Soybean Association--Virginia Trucking Association--Women Impacting Public Policy--Virginia Agribusiness Council--Virginia Forestry Association--Eagle Forum--Virginia Association of Marine Industries--Virginia Automotive Recyclers Association--Virginia Ready Mixed Concrete Association--Virginia Propane Gas Association--Virginia Auto Body Association--Family Foundation of Virginia--Virginia Poultry Federation--Virginia Motorcycle Dealers Association--Fairfax County Chamber of Commerce
- In November 2002, the bipartisan Joint Subcommittee to Study and Revise Virginia's Tax Code co-chaired by Delegate Robert McDonnell and Senator Emmett Hanger adopted a recommendation calling for Virginia to phase out the state death tax.
- In the 2003 session of the Virginia General Assembly, Delegate Robert Tata, Delegate Robert McDonnell, and Senator Thomas Norment will introduce legislation to eliminate the Virginia death tax by 2005. The bill will apply to the estates of individuals who die on or after January 1, 2004.
- The Tata-McDonnell-Norment death tax legislation will not affect the current biennium budget. The bill will have no fiscal impact in FY 2003 and FY 2004. Based on analyses of similar legislation by the Virginia Department of Taxation, the bill will have projected impacts of approximately $65 million in FY 2005 and $120 million in FY 2006.
- The actual fiscal impact of Virginia death tax repeal, however, is expected to be significantly less in 2005-2006 than the Tax Department's projections. Even if the death tax law is not repealed, estate-planning experts say a significant portion of the revenue will be lost as individuals with large estates change their place of domicile to avoid the tax. Such relocations not only will cost the state death tax revenue, but will cause the loss of other state and local tax revenues, including individual income taxes, personal property taxes, and business taxes.
- To determine what Virginians think on the death tax, the Luntz Research Companies, a nationally prominent polling firm, conducted a statewide survey of 400 registered voters in June 2002. The survey examined voter opinions on the fairness of the Virginia death tax and the appropriateness of continuing the Virginia death tax after congressional passage last year of legislation phasing out the federal tax. The survey found broad, intense, bipartisan support for repeal of Virginia's death tax.
- VIRGINIANS OVERWHELMINGLY REJECT THE DEATH TAX AS UNFAIR: When asked whether they support or oppose reducing and eventually eliminating state death taxes, 82% of Virginia voters express support. 67% "strongly support" eliminating the tax.
- IT IS UNFAIR FOR TO COLLECT STATE DEATH TAXES AFTER CONGRESS ELIMINATED THE DEATH TAX: 87% of Virginians say it is unfair to still pay state death taxes after federal repeal.
- VIRGINIA'S DEATH TAX IS AS POLITICALLY EXPLOSIVE AS THE DETESTED CAR TAX: When asked to pick the one Virginia tax they would most like to eliminate if they could eliminate just one, equal percentages of voters (27%) picked the death tax and the car tax. Local real estate taxes came in a distant third (18%), and no other tax was close. Indeed, while only 35% of Virginia voters say the overall amount of state taxes they pay is unfair, and 55% say the car tax is unfair, 67% of voters surveyed say the death tax is unfair.
- VIRGINIANS WANT TO ATTRACT BUSINESSES TO THE STATE BY ELIMINATING DEATH TAXES, NOT CHASE BUSINESS OWNERS TO OTHER STATES: 67% of voters agree (40% "strongly" agree) that reducing or eliminating the Virginia death tax will be good for the state because it will keep business-owning families in Virginia where they will continue to pay other taxes and provide jobs. Only 23% disagree.
- SUPPORT FOR STATE DEATH TAX REPEAL EARNS STRONG APPROVAL FROM VIRGINIA VOTERS: More than 70% of voters say they would be more likely to vote for a local legislator or statewide candidate if they knew he or she wanted to abolish the state death tax.
- For more information about Virginians for Death Tax Repeal, contact:
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