Last updated on 2014.01.15
In 2000, South Dakotans voted 80% to 20% for Amendment C to abolish the state inheritance tax. 14 years later, they finally, fully, get their wish.
House Bill 1057 would repeal South Dakota's inheritance tax. That tax is still on the books because the state inheritance tax had a twelve-year statute of limitations. For the last twelve years, the state treasurer has still been collecting tax on inheritances from folks who died before Article 11, Section 15 outlawed the inheritance tax on July 1, 2001.
According to Mike Houdyshell of the Department of Revenue,* South Dakota last cashed in on inheritance tax in FY2011, when we collected an heir-y $154. In FY2012 and FY2013, no one coughed up any heirballs. The major fiscal impact of repealing the inheritance tax thus took place long ago; repealing it now will not bump revenues one penny.
HB 1057 also repeals the state estate tax. South Dakota's estate tax is keyed to the federal death tax credit, which Mr. Houdyshell says Uncle Sam repealed in 2003. South Dakota thus has not collected any estate tax since then.
Repealing South Dakota's "death taxes" should make every conservative giddy, but House Bill 1057 simply punctuates a change in our taxes that voters approved long ago and will not impact our FY2015 budget.
*Update 2014.01.15 11:58 CST: I originally put Mr. Houdyshell in the Bureau of Finance and Management. I regret and have corrected that error!