• Rising estate taxes pose a threat to the ability of Georgia farm families being able to pass their farms from one generation to the next because families may be forced to sell land, buildings or equipment to pay taxes due on the death of an owner.
The General Session for this year's Georgia Farm Bureau’s convention got under way on Dec. 3 with GFB President Zippy Duvall's annual address.
Duvall urged Congress to take action during the lame duck session to prevent federal estate taxes from rising on Jan. 1, 2013.
Rising estate taxes pose a threat to the ability of Georgia farm families being able to pass their farms from one generation to the next because families may be forced to sell land, buildings or equipment to pay taxes due on the death of an owner.
“Federal estate taxes threaten our farms, and unless Congress acts soon, many farm families could be faced with some very difficult financial decisions if there is a death in their family,” Duvall said.
“We urge a lower tax rate with increased exemptions indexed to inflation.”
The current federal estate tax exemption is $5 million per person with a top rate of 35 percent. Unless Congress acts before Jan. 1, the exemption will be reduced to $1 million per person and the top rate increases to 55 percent.
An analysis compiled by the American Farm Bureau using USDA National Agricultural Statistics Service data shows 664 Georgia farms would be subject to some level of federal estate tax at the current $5 million exemption. If the exemption level drops to $1 million, an estimated 7,469 Georgia farms would be affected.
Based on 2012 farm real estate values, USDA statistics show that farms larger than 286 acres would exceed the $1 million exemption level that goes into effect Jan. 1. It would take a farm of about 1,429 acres to reach the current $5 million exemption.
Duvall told the GFB members that the organization continues to monitor the status of the pending farm bill in Congress.
“We have remained engaged in the farm bill discussion in both the House and Senate. Sen. Chambliss invited Georgia Farm Bureau to speak at a farm bill forum in Jesup in March where we offered Farm Bureau’s perspective on the issue,” Duvall said. “Farm Bureau continues to work for an adequate safety net for Georgia farmers.”
Duvall also mentioned House Bill 386, and the provision that created the Georgia Agricultural Tax Exemption (GATE) program, which GFB supported.
“This new program includes exemptions for input costs for energy, equipment parts, trailers and more in addition to the existing exemptions for seed, feed, fertilizer, chemicals and equipment,” Duvall said. “GATE is a wonderful program for farmers, and I encourage you to apply for your card before the program goes into effect Jan. 1.”