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News Release

June 29, 2000  -  Columbus, Ohio  -  Governor Taft Signs $200 Million Estate Tax Relief Bill

Taxpayer services improvements also signed into law

Governor Bob Taft at the Statehouse today signed the Estate Tax Bill (Sub. S.B. 108), saving affected Ohio families nearly $200 million over the next two years. Taft also signed the Taxpayer Services Bill (H.B. 612), which focuses on making the tax system more taxpayer friendly while allowing the Department of Taxation to be more efficient.

"Today is an historic day for all Ohioans. We are taking a huge step forward in tax relief. By 2002, this bill will eliminate the burden of filing and paying estate tax for 78 percent of Ohioans who would currently have to pay," said Taft. "The Taxpayer Services Bill doesn’t include any tax cuts, but it makes tax filing much easier and more efficient. It deletes obsolete provisions of tax law and updates others."

The Estate Tax Bill, sponsored by Sen. Robert Latta (R-Bowling Green), eliminates the burden of filing and paying the tax for more than 21,500 Ohio families. It greatly increases the level of estate value at which no tax is paid – from the current $25,000 or less to $338,000 or less in 2003. The bill also creates a deduction designed to preserve family-owned farms and businesses. Families that qualify can choose to deduct up to $675,000 from the taxable value of their estate. Another change aims to cushion the impact of the tax cut on local governments, which presently receive 64% of the proceeds of the tax. The bill increases the local government share of estate tax revenues to 80% in 2002, while reducing the state government share from 36% to 20%. In fiscal year 1999, 27,676 estates paid tax totaling $408.5 million.

The Taxpayer Services Bill, sponsored by Rep. Greg Jolivette (R-Hamilton), simplifies Ohio's tax system and gives taxpayers more time to appeal tax rulings. It paves the way for more choices of how tax forms and payments can be delivered, authorizing the Tax Department to approve alternative delivery systems (like UPS and FedEx, as well as the U.S. Postal Service). It eliminates a number of mandatory, automatic penalties and gives the Tax Commissioner discretion to determine an appropriate penalty. The bill allows the Department to accept electronic signatures, opening up opportunities for taxpayers to file and pay taxes over the Internet. Two provisions included in the bill – allowing ‘rounding’ to the nearest dollar on tax returns and reducing the number of Ohioans required to make quarterly estimated income tax payments -- will save the Department and Ohio taxpayers more than $400,000 a year in processing costs.

For more information, contact Scott Milburn, press secretary, at 614/644-0957 or Gary Gudmundson, Ohio Department of Taxation, at 614/644-6903.