Your Legacy, Our Fight By Collin Cisco, Public Policy Manager
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here is something special about the family farm. Whenever I talk to farmers, it’s almost a guarantee the farmer will mention what generation farmer they are in the line of their family’s farming legacy. Legacy is as critical to our agricultural infrastructure as planting practice, soil health, or equipment, because it's the legacy that continues the tradition of stewardship, business innovation, and the family farm. Many threats loom in the distance for our farmers when it comes to preserving and protecting legacy; one such issue is the estate tax. As you know, estate taxes are applied to an estate upon a descendant's passing with varying tax exemptions applied at the state and federal level. Illinois is one of only eleven states that have any estate tax and one of only two Midwest states. Currently, any individual’s estate value beyond
$12.92 million, with that threshold doubling to $25.84 million for married couples, faces a higher tax rate at the federal level. However, in Illinois, the tax rate exemption threshold applies to any estate valued at just $4 million, with the tax rate coming in at a whopping 16 percent. Coupled with the tax rate farmers face at the federal level, family farms could very well be hit with a double whammy, crippling their ability to continue the legacy without serious financial constraints or proactive estate planning. If we were to evaluate only the land at the average rate of Illinois farming real estate, to cross that threshold a farmer would only need to be operating 431 acres to qualify for the highest estate tax in the state of Illinois. With the average farm in Illinois scaled at 375 acres, that means more folks in the median range of farm scale are being penalized for inheriting land from their own family. Coupling farm assets with other property, equipment, investments, and cash, makes the Illinois estate
tax threshold a very clear threat to many farmers and their farm legacies. Legislators recognized this threat and introduced several bills to the Illinois legislature trying to prevent farmers from facing this burden. This session saw quite a bit of momentum toward direction of raising the threshold, or at least carving out special provisions for farmers. However, a last-minute budget conflict meant the expected state budget surplus was no longer a reality, and any further deficits would fiscally and politically be non-starters. There is hope for another opportunity to address estate taxes in the next session of the General Assembly. Legislators on both sides of the aisle have expressed interest in pursuing this legislation, particularly because of the effect it would have on small business owners, farmers, and other constituencies who face looming estate tax burdens. The Illinois Soybean Association plans to be heavily involved and proactive in these discussions
A PUBLICATION OF THE ILLINOIS SOYBEAN ASSOCIATION
through policy education, sharing farmer stories, and consistent outreach to key legislators who have a heavy hand in the outcome of this fight. This will be a key issue for the association in the coming months. We plan to invest our time and resources in educating key stakeholders on the importance of protecting the family farm and your legacy. One way you can get involved is by reaching out to your state Senator or Representative and telling your story. Tell the story of your family farm; tell the story of the generations of families that have served Illinois consumers, and tell the story of the burden you face with the current estate tax threshold. Your story is powerful and is the most important educational tool we have at our disposal to better inform changemakers. As always, we’re on your side. Thank you for sharing your legacy with us. Feel free to share your thoughts by reaching out to me at collin. cisco@ilsoy.org. November 2023
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