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Senate File 16 - IntroducedA Bill ForAn Act 1reducing the state inheritance tax rates and providing
2for the future repeal of the state inheritance tax and state
3qualified use inheritance tax.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 450.10, Code 2021, is amended by adding
2the following new subsection:
3 NEW SUBSECTION. 7. a. In lieu of each rate of tax imposed
4in subsections 1 through 4, for property passing from the
5estate of a decedent dying on or after July 1, 2021, but before
6July 1, 2022, there shall be imposed a rate of tax equal to
7the applicable tax rate in subsections 1 through 4, reduced by
8ten percent, and rounded to the nearest one-hundredth of one
9percent.
10b. In lieu of each rate of tax imposed in subsections 1
11through 4, for property passing from the estate of a decedent
12dying on or after July 1, 2022, but before July 1, 2023, there
13shall be imposed a rate of tax equal to the applicable tax rate
14in subsections 1 through 4, reduced by twenty percent, and
15rounded to the nearest one-hundredth of one percent.
16c. In lieu of each rate of tax imposed in subsections 1
17through 4, for property passing from the estate of a decedent
18dying on or after July 1, 2023, but before July 1, 2024, there
19shall be imposed a rate of tax equal to the applicable tax rate
20in subsections 1 through 4, reduced by thirty percent, and
21rounded to the nearest one-hundredth of one percent.
22d. In lieu of each rate of tax imposed in subsections 1
23through 4, for property passing from the estate of a decedent
24dying on or after July 1, 2024, but before July 1, 2025, there
25shall be imposed a rate of tax equal to the applicable tax
26rate in subsections 1 through 4, reduced by forty percent, and
27rounded to the nearest one-hundredth of one percent.
28e. In lieu of each rate of tax imposed in subsections 1
29through 4, for property passing from the estate of a decedent
30dying on or after July 1, 2025, but before July 1, 2026, there
31shall be imposed a rate of tax equal to the applicable tax
32rate in subsections 1 through 4, reduced by fifty percent, and
33rounded to the nearest one-hundredth of one percent.
34f. In lieu of each rate of tax imposed in subsections 1
35through 4, for property passing from the estate of a decedent
-1-1dying on or after July 1, 2026, but before July 1, 2027, there
2shall be imposed a rate of tax equal to the applicable tax
3rate in subsections 1 through 4, reduced by sixty percent, and
4rounded to the nearest one-hundredth of one percent.
5g. In lieu of each rate of tax imposed in subsections 1
6through 4, for property passing from the estate of a decedent
7dying on or after July 1, 2027, but before July 1, 2028, there
8shall be imposed a rate of tax equal to the applicable tax rate
9in subsections 1 through 4, reduced by seventy percent, and
10rounded to the nearest one-hundredth of one percent.
11h. In lieu of each rate of tax imposed in subsections 1
12through 4, for property passing from the estate of a decedent
13dying on or after July 1, 2028, but before July 1, 2029, there
14shall be imposed a rate of tax equal to the applicable tax rate
15in subsections 1 through 4, reduced by eighty percent, and
16rounded to the nearest one-hundredth of one percent.
17i. In lieu of each rate of tax imposed in subsections 1
18through 4, for property passing from the estate of a decedent
19dying on or after July 1, 2029, but before July 1, 2030, there
20shall be imposed a rate of tax equal to the applicable tax rate
21in subsections 1 through 4, reduced by ninety percent, and
22rounded to the nearest one-hundredth of one percent.
23 Sec. 2. NEW SECTION. 450.98 Tax repealed.
24This chapter shall not apply to property of estates of
25decedents dying on or after July 1, 2030. The inheritance
26tax shall not be imposed under this chapter in the event the
27decedent dies on or after July 1, 2030, and, to this extent,
28this chapter is repealed.
29 Sec. 3. NEW SECTION. 450B.8 Tax repealed.
30This chapter shall not apply to property of estates of
31decedents dying on or after July 1, 2030. The qualified use
32inheritance tax shall not be imposed under this chapter in the
33event the decedent dies on or after July 1, 2030, and, to this
34extent, this chapter is repealed.
35 Sec. 4. CODE EDITOR DIRECTIVE. The Code editor is directed
-2-1to remove chapters 450 and 450B from the Code and correct
2appropriate references to chapters 450 and 450B and appropriate
3references to the inheritance tax and qualified use inheritance
4tax effective July 1, 2040.
5EXPLANATION
6The inclusion of this explanation does not constitute agreement with
7the explanation’s substance by the members of the general assembly.
8This bill proportionally reduces over a nine-year period
9the rates of tax applicable to the state inheritance tax,
10beginning for estates of decedents dying on or after July 1,
112021. The bill then repeals the state inheritance tax and the
12state qualified use inheritance tax for property of estates of
13decedents dying on or after July 1, 2030. Inheritance tax will
14not be imposed on any property in the event of the death of an
15individual on or after July 1, 2030. The bill directs the Code
16editor to remove Code chapters 450 (inheritance tax) and 450B
17(qualified use inheritance tax) from the Code effective July
181, 2040.
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2for the future repeal of the state inheritance tax and state
3qualified use inheritance tax.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 450.10, Code 2021, is amended by adding
2the following new subsection:
3 NEW SUBSECTION. 7. a. In lieu of each rate of tax imposed
4in subsections 1 through 4, for property passing from the
5estate of a decedent dying on or after July 1, 2021, but before
6July 1, 2022, there shall be imposed a rate of tax equal to
7the applicable tax rate in subsections 1 through 4, reduced by
8ten percent, and rounded to the nearest one-hundredth of one
9percent.
10b. In lieu of each rate of tax imposed in subsections 1
11through 4, for property passing from the estate of a decedent
12dying on or after July 1, 2022, but before July 1, 2023, there
13shall be imposed a rate of tax equal to the applicable tax rate
14in subsections 1 through 4, reduced by twenty percent, and
15rounded to the nearest one-hundredth of one percent.
16c. In lieu of each rate of tax imposed in subsections 1
17through 4, for property passing from the estate of a decedent
18dying on or after July 1, 2023, but before July 1, 2024, there
19shall be imposed a rate of tax equal to the applicable tax rate
20in subsections 1 through 4, reduced by thirty percent, and
21rounded to the nearest one-hundredth of one percent.
22d. In lieu of each rate of tax imposed in subsections 1
23through 4, for property passing from the estate of a decedent
24dying on or after July 1, 2024, but before July 1, 2025, there
25shall be imposed a rate of tax equal to the applicable tax
26rate in subsections 1 through 4, reduced by forty percent, and
27rounded to the nearest one-hundredth of one percent.
28e. In lieu of each rate of tax imposed in subsections 1
29through 4, for property passing from the estate of a decedent
30dying on or after July 1, 2025, but before July 1, 2026, there
31shall be imposed a rate of tax equal to the applicable tax
32rate in subsections 1 through 4, reduced by fifty percent, and
33rounded to the nearest one-hundredth of one percent.
34f. In lieu of each rate of tax imposed in subsections 1
35through 4, for property passing from the estate of a decedent
-1-1dying on or after July 1, 2026, but before July 1, 2027, there
2shall be imposed a rate of tax equal to the applicable tax
3rate in subsections 1 through 4, reduced by sixty percent, and
4rounded to the nearest one-hundredth of one percent.
5g. In lieu of each rate of tax imposed in subsections 1
6through 4, for property passing from the estate of a decedent
7dying on or after July 1, 2027, but before July 1, 2028, there
8shall be imposed a rate of tax equal to the applicable tax rate
9in subsections 1 through 4, reduced by seventy percent, and
10rounded to the nearest one-hundredth of one percent.
11h. In lieu of each rate of tax imposed in subsections 1
12through 4, for property passing from the estate of a decedent
13dying on or after July 1, 2028, but before July 1, 2029, there
14shall be imposed a rate of tax equal to the applicable tax rate
15in subsections 1 through 4, reduced by eighty percent, and
16rounded to the nearest one-hundredth of one percent.
17i. In lieu of each rate of tax imposed in subsections 1
18through 4, for property passing from the estate of a decedent
19dying on or after July 1, 2029, but before July 1, 2030, there
20shall be imposed a rate of tax equal to the applicable tax rate
21in subsections 1 through 4, reduced by ninety percent, and
22rounded to the nearest one-hundredth of one percent.
23 Sec. 2. NEW SECTION. 450.98 Tax repealed.
24This chapter shall not apply to property of estates of
25decedents dying on or after July 1, 2030. The inheritance
26tax shall not be imposed under this chapter in the event the
27decedent dies on or after July 1, 2030, and, to this extent,
28this chapter is repealed.
29 Sec. 3. NEW SECTION. 450B.8 Tax repealed.
30This chapter shall not apply to property of estates of
31decedents dying on or after July 1, 2030. The qualified use
32inheritance tax shall not be imposed under this chapter in the
33event the decedent dies on or after July 1, 2030, and, to this
34extent, this chapter is repealed.
35 Sec. 4. CODE EDITOR DIRECTIVE. The Code editor is directed
-2-1to remove chapters 450 and 450B from the Code and correct
2appropriate references to chapters 450 and 450B and appropriate
3references to the inheritance tax and qualified use inheritance
4tax effective July 1, 2040.
5EXPLANATION
6The inclusion of this explanation does not constitute agreement with
7the explanation’s substance by the members of the general assembly.
8This bill proportionally reduces over a nine-year period
9the rates of tax applicable to the state inheritance tax,
10beginning for estates of decedents dying on or after July 1,
112021. The bill then repeals the state inheritance tax and the
12state qualified use inheritance tax for property of estates of
13decedents dying on or after July 1, 2030. Inheritance tax will
14not be imposed on any property in the event of the death of an
15individual on or after July 1, 2030. The bill directs the Code
16editor to remove Code chapters 450 (inheritance tax) and 450B
17(qualified use inheritance tax) from the Code effective July
181, 2040.
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