Over the objections of the governor, the Minnesota legislature voted to raise the state's estate tax exemption. Despite the objections, the governor declined to exercise a veto.
A trend in recent years has been for state governments to reduce or eliminate their estate taxes. The reason for this trend is in part ideological and in part not wanting wealthy people to leave the state after they retire, for states that do not have an estate tax.
Only 18 states and the District of Columbia currently have an estate or inheritance tax. Minnesota is one of them.
However, Republicans in the state legislature have taken an important step that could eventually lead to the elimination of the estate tax in the state.
Forbes reported on this development in "Minnesota Weakens Estate Tax Retroactive to January 1."
As part of a budget bill, the legislators included a gradual rise of the estate tax exemption in the state.
They had previously attempted to pass a budget that included raising the exemption to the federal estate tax level, but that budget was vetoed by the Democratic governor.
The new budget does not go quite that far in raising the exemption. However, the governor still has objections to it, which he expressed in a letter.
Nevertheless, he declined to veto the bill and signed it into law.
The governor is still asking the legislature to undo the exemption raise in an upcoming special session.
It is expected that more and more states will lower their estate tax burdens or eliminate them completely in the next few years. However, it will be a battle to do so in every state that still imposes the tax.
For more information about estate planning in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Forbes (May 31, 2017) "Minnesota Weakens Estate Tax Retroactive to January 1."