Thanks to the hard work from Farm Bureau, SB 378 (Scott Wiener, D-San Francisco) is being held in the Senate Rules Committee and will not be referred to a policy committee this year. SB 378 would impose an estate tax on properties over $3.5 million, which would affect many farmers and ranchers on the Central Coast.
Existing law, as added by an initiative measure that was approved by voters as Proposition 6 at the June 8, 1982, statewide primary election, prohibits the Legislature or a political subdivision of the state from imposing any tax on or by reason of any transfer occurring by reason of death. Existing law imposes a California estate tax, commonly referred to as the “pick up tax,” equal to a certain portion of the maximum allowable amount of credit for state death taxes allowable under applicable federal estate tax law. The Economic Growth and Tax Relief Reconciliation Act of 2001 phased out the allowance of this credit, and, as of 2005, no longer allows a person to claim a credit of this nature under federal law. Therefore, the “pick up tax” is no longer imposed in California.
This bill would propose to the voters a repeal of the above initiative measure prohibiting the imposition of a tax on or by reason of any transfer occurring by reason of death and would propose the imposition of estate, gift, and generation-skipping transfer taxes, in modified conformity with federal law, on and after January 1, 2021. The estate tax exclusion limit would be $3.5 million and would not be allowed to be adjusted for inflation.
For more information, please contact our office at 805-543-3654 or email Government Affairs Specialist, James Green at jgreen@slofarmbureau.org
