Pennsylvania HB 1394: An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, repealing provisions relating to inheritance tax; in procedure and administration, further providing for petition for reassessment; and, in governmental obligations, further providing for taxability of government obligations.

Bill Text

PRINTER'S NO. 1589
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 1394
Session of
2025
INTRODUCED BY GAYDOS, ROAE, KRUPA, M. BROWN, SMITH, KAUFFMAN,
MARCELL, BANTA, PUGH, STAATS, PICKETT, HAMM, GUENST,
OLSOMMER, M. MACKENZIE, KOZAK, STENDER, RIVERA, BARGER,
ZIMMERMAN, ROWE, FINK, EMRICK, GILLEN AND HEFFLEY,
MAY 5, 2025
REFERRED TO COMMITTEE ON FINANCE, MAY 5, 2025
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," repealing provisions relating to inheritance tax;
in procedure and administration, further providing for
petition for reassessment; and, in governmental obligations,
further providing for taxability of government obligations.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Article XXI of the act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971, is repealed:
[ARTICLE XXI
INHERITANCE TAX
PART I
PRELIMINARY PROVISIONS
Section 2101. Short Title.--This article shall be known and
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may be cited as the "Inheritance and Estate Tax Act."
Section 2102. Definitions.--The following words, terms and
phrases, when used in this article, shall have the meanings
ascribed to them in this section, except where the context
clearly indicates a different meaning:
"Adverse interest." A substantial beneficial interest in the
property transferred which might be adversely affected by the
exercise or nonexercise of the power or right reserved or
possessed by the transferor.
"Business of agriculture." The term shall include the
leasing to members of the same family or the leasing to a
corporation or association owned by members of the same family
of property which is directly and principally used for
agricultural purposes. The business of agriculture shall not be
deemed to include:
(1) recreational activities such as, but not limited to,
hunting, fishing, camping, skiing, show competition or racing;
(2) the raising, breeding or training of game animals or
game birds, fish, cats, dogs or pets or animals intended for use
in sporting or recreational activities;
(3) fur farming;
(4) stockyard and slaughterhouse operations; or
(5) manufacturing or processing operations of any kind.
"Children." Includes natural children whether or not they
have been adopted by others, adopted children and stepchildren.
"Clerk." The clerk of the orphans' court division of the
court of common pleas having jurisdiction.
"Court." The orphans' court division of the court of common
pleas of:
(1) The county in which the decedent resided at the time of
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his death.
(2) The county in which letters, if any, are granted if the
decedent was a nonresident of this Commonwealth.
(3) Dauphin County in all other cases.
"Date of death." The date of actual death or, in the case of
a presumed decedent, the date found by the final decree to be
the date of the absentee's presumed death. For the purpose of
determining interest and discount, "date of death" means the
date upon which the court enters its final decree of presumptive
death.
"Death taxes." Includes inheritance, succession, transfer
and estate taxes and any other taxes levied against the estate
of a decedent by reason of his death.
"Decedent" or "transferor." Any person by or from whom a
transfer is made and includes any testator, intestate, grantor,
settlor, bargainor, vendor, assignor, donor, joint tenant and
insured.
"Department." The Department of Revenue of the Commonwealth.
"Exemption income." All moneys or property, including,
without limitation, interest, gains or income derived from
obligations which are statutorily free from State or local
taxation under any other Federal or State laws, received of
whatever nature and from whatever source derived.
"Financial institution." A bank, a national banking
association, a bank and trust company, a trust company, a
savings and loan association, a building and loan association, a
mutual savings bank, a credit union, a savings bank and a
company that rents safe deposit boxes.
"Future interest." Includes a successive life interest and a
successive interest for a term certain.
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"Lineal descendants." All children of the natural parents
and their descendants, whether or not they have been adopted by
others, adopted descendants and their descendants and
stepde