Senate File 16 - Introduced SENATE FILE 16 BY ZAUN A BILL FOR An Act reducing the state inheritance tax rates and providing 1 for the future repeal of the state inheritance tax and state 2 qualified use inheritance tax. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1657XS (2) 89 jm/jh
S.F. 16 Section 1. Section 450.10, Code 2021, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 7. a. In lieu of each rate of tax imposed 3 in subsections 1 through 4, for property passing from the 4 estate of a decedent dying on or after July 1, 2021, but before 5 July 1, 2022, there shall be imposed a rate of tax equal to 6 the applicable tax rate in subsections 1 through 4, reduced by 7 ten percent, and rounded to the nearest one-hundredth of one 8 percent. 9 b. In lieu of each rate of tax imposed in subsections 1 10 through 4, for property passing from the estate of a decedent 11 dying on or after July 1, 2022, but before July 1, 2023, there 12 shall be imposed a rate of tax equal to the applicable tax rate 13 in subsections 1 through 4, reduced by twenty percent, and 14 rounded to the nearest one-hundredth of one percent. 15 c. In lieu of each rate of tax imposed in subsections 1 16 through 4, for property passing from the estate of a decedent 17 dying on or after July 1, 2023, but before July 1, 2024, there 18 shall be imposed a rate of tax equal to the applicable tax rate 19 in subsections 1 through 4, reduced by thirty percent, and 20 rounded to the nearest one-hundredth of one percent. 21 d. In lieu of each rate of tax imposed in subsections 1 22 through 4, for property passing from the estate of a decedent 23 dying on or after July 1, 2024, but before July 1, 2025, there 24 shall be imposed a rate of tax equal to the applicable tax 25 rate in subsections 1 through 4, reduced by forty percent, and 26 rounded to the nearest one-hundredth of one percent. 27 e. In lieu of each rate of tax imposed in subsections 1 28 through 4, for property passing from the estate of a decedent 29 dying on or after July 1, 2025, but before July 1, 2026, there 30 shall be imposed a rate of tax equal to the applicable tax 31 rate in subsections 1 through 4, reduced by fifty percent, and 32 rounded to the nearest one-hundredth of one percent. 33 f. In lieu of each rate of tax imposed in subsections 1 34 through 4, for property passing from the estate of a decedent 35 -1- LSB 1657XS (2) 89 jm/jh 1/ 3
S.F. 16 dying on or after July 1, 2026, but before July 1, 2027, there 1 shall be imposed a rate of tax equal to the applicable tax 2 rate in subsections 1 through 4, reduced by sixty percent, and 3 rounded to the nearest one-hundredth of one percent. 4 g. In lieu of each rate of tax imposed in subsections 1 5 through 4, for property passing from the estate of a decedent 6 dying on or after July 1, 2027, but before July 1, 2028, there 7 shall be imposed a rate of tax equal to the applicable tax rate 8 in subsections 1 through 4, reduced by seventy percent, and 9 rounded to the nearest one-hundredth of one percent. 10 h. In lieu of each rate of tax imposed in subsections 1 11 through 4, for property passing from the estate of a decedent 12 dying on or after July 1, 2028, but before July 1, 2029, there 13 shall be imposed a rate of tax equal to the applicable tax rate 14 in subsections 1 through 4, reduced by eighty percent, and 15 rounded to the nearest one-hundredth of one percent. 16 i. In lieu of each rate of tax imposed in subsections 1 17 through 4, for property passing from the estate of a decedent 18 dying on or after July 1, 2029, but before July 1, 2030, there 19 shall be imposed a rate of tax equal to the applicable tax rate 20 in subsections 1 through 4, reduced by ninety percent, and 21 rounded to the nearest one-hundredth of one percent. 22 Sec. 2. NEW SECTION . 450.98 Tax repealed. 23 This chapter shall not apply to property of estates of 24 decedents dying on or after July 1, 2030. The inheritance 25 tax shall not be imposed under this chapter in the event the 26 decedent dies on or after July 1, 2030, and, to this extent, 27 this chapter is repealed. 28 Sec. 3. NEW SECTION . 450B.8 Tax repealed. 29 This chapter shall not apply to property of estates of 30 decedents dying on or after July 1, 2030. The qualified use 31 inheritance tax shall not be imposed under this chapter in the 32 event the decedent dies on or after July 1, 2030, and, to this 33 extent, this chapter is repealed. 34 Sec. 4. CODE EDITOR DIRECTIVE. The Code editor is directed 35 -2- LSB 1657XS (2) 89 jm/jh 2/ 3
S.F. 16 to remove chapters 450 and 450B from the Code and correct 1 appropriate references to chapters 450 and 450B and appropriate 2 references to the inheritance tax and qualified use inheritance 3 tax effective July 1, 2040. 4 EXPLANATION 5 The inclusion of this explanation does not constitute agreement with 6 the explanation’s substance by the members of the general assembly. 7 This bill proportionally reduces over a nine-year period 8 the rates of tax applicable to the state inheritance tax, 9 beginning for estates of decedents dying on or after July 1, 10 2021. The bill then repeals the state inheritance tax and the 11 state qualified use inheritance tax for property of estates of 12 decedents dying on or after July 1, 2030. Inheritance tax will 13 not be imposed on any property in the event of the death of an 14 individual on or after July 1, 2030. The bill directs the Code 15 editor to remove Code chapters 450 (inheritance tax) and 450B 16 (qualified use inheritance tax) from the Code effective July 17 1, 2040. 18 -3- LSB 1657XS (2) 89 jm/jh 3/ 3