House File 118 - Introduced



                                   HOUSE FILE       
                                   BY  STRUYK, WINDSCHITL, FORRISTALL,
                                       PETTENGILL, SCHULTZ, HUSEMAN,
                                       HELLAND, DRAKE, RAYHONS, HORBACH,
                                       HUSER, and MERTZ


    Passed House, Date               Passed Senate, Date             
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act eliminating the inheritance tax on property passing to
  2    relatives related to the decedent within the third degree of
  3    consanguinity or affinity and including an applicability date
  4    provision.
  5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  6 TLSB 1482YH 83
  7 mg/rj/14

PAG LIN



  1  1    Section 1.  Section 450.7, subsection 1, unnumbered
  1  2 paragraph 1, Code 2009, is amended to read as follows:
  1  3    Except for the share of the estate passing to the surviving
  1  4 spouse, and parents, grandparents, great=grandparents, and
  1  5 other lineal ascendants, children including legally adopted
  1  6 children and biological children entitled to inherit under the
  1  7 laws of this state, stepchildren, and grandchildren,
  1  8 great=grandchildren, and other lineal descendants, and passing
  1  9 to other individuals related within the third degree of
  1 10 consanguinity or affinity, the tax is a charge against and a
  1 11 lien upon the estate subject to tax under this chapter, and
  1 12 all property of the estate or owned by the decedent from the
  1 13 death of the decedent until paid, subject to the following
  1 14 limitation:
  1 15    Sec. 2.  Section 450.9, Code 2009, is amended to read as
  1 16 follows:
  1 17    450.9  INDIVIDUAL EXEMPTIONS.
  1 18    In computing the tax on the net estate, the entire amount
  1 19 of property, interest in property, and income passing to the
  1 20 surviving spouse, and parents, grandparents,
  1 21 great=grandparents, and other lineal ascendants, children
  1 22 including legally adopted children and biological children
  1 23 entitled to inherit under the laws of this state,
  1 24 stepchildren, and grandchildren, great=grandchildren, and
  1 25 other lineal descendants, and passing to other individuals
  1 26 related within the third degree of consanguinity or affinity,
  1 27 are exempt from tax.
  1 28    Sec. 3.  Section 450.10, subsection 1, Code 2009, is
  1 29 amended by striking the subsection.
  1 30    Sec. 4.  Section 450.10, subsection 2, unnumbered paragraph
  1 31 1, Code 2009, is amended to read as follows:
  1 32    When the property or interest in property or income from
  1 33 property, taxable under this chapter, passes to a person not
  1 34 included in subsections 1 and subsection 6, the rate of tax
  1 35 imposed on the individual share so passing shall be as
  2  1 follows:
  2  2    Sec. 5.  Section 450.10, subsection 5, Code 2009, is
  2  3 amended by striking the subsection.
  2  4    Sec. 6.  Section 450.10, subsection 6, Code 2009, is
  2  5 amended to read as follows:
  2  6    6.  Property, interest in property, or income passing to
  2  7 the surviving spouse, and parents, grandparents,
  2  8 great=grandparents, and other lineal ascendants, children
  2  9 including legally adopted children and biological children
  2 10 entitled to inherit under the laws of this state,
  2 11 stepchildren, and grandchildren, great=grandchildren, and
  2 12 other lineal descendants, and passing to other individuals
  2 13 related within the third degree of consanguinity or affinity,
  2 14 is not taxable under this section.
  2 15    Sec. 7.  APPLICABILITY DATE.  This Act applies to estates
  2 16 of decedents dying on or after July 1, 2009.
  2 17                           EXPLANATION
  2 18    This bill exempts from the inheritance tax property,
  2 19 interest in property, or income passing to individuals related
  2 20 to the decedent within the third degree of consanguinity
  2 21 (blood) or affinity (marriage) under the civil law.  Many of
  2 22 the individuals related within the third degree of
  2 23 consanguinity are presently not subject to tax.  The bill adds
  2 24 to this list the siblings, uncles and aunts, and nephews and
  2 25 nieces.  Under present law only the surviving spouse is exempt
  2 26 from tax while all other individuals related by marriage must
  2 27 pay tax.  The bill exempts the spouse's parents, grandparents,
  2 28 great=grandparents, grandchildren, great=grandchildren,
  2 29 uncles, aunts, siblings, nephews, and nieces.
  2 30    The bill applies to estates of decedents dying on or after
  2 31 July 1, 2009.
  2 32 LSB 1482YH 83
  2 33 mg/rj/14