The Family Business Coalition (FBC), consisting of LICA and many small business interest groups, met this week to hear an update on tax provisions being considered and developed that would benefit small and medium sized family-owned business. FBC is a diverse collection of organizations and industry groups united for the common purpose of protecting America’s family businesses across the country. The monthly coalition meetings connect top decision makers from Capitol Hill with family business coalition partners, family business owners, and state-based allies. The group has the important task of monitoring and acting on legislation that affects family businesses in Congress. It is the voice of America’s main economic engine – family businesses – working together towards a better business climate that promotes private business expansion and job growth.
The primary focus on the FBC is the repeal of the federal estate tax. The federal estate tax is a levy on an individual’s transfer of property enacted at death. Family businesses, farms, and ranchers are hit disproportionally hard by the federal estate tax. Family business owners tend to be “asset rich and cash poor” which often leaves them with large estate tax liabilities but no cash on hand to pay the tax.
Many family businesses must keep inventories valued in the millions to service customers. This inventory often accounts for a vast majority of the family’s assets. When the owner of the business dies, the family may be forced into selling equipment or liquidating the entire business in order to raise the cash for the estate tax. Selling the business to pay the estate tax bill could mean selling at a deep discount to find potential buyers.
Senator John Thune (R-SD) and Congressman Jason Smith (R-MO-8) have both introduced a bill that will permanently repeal the federal estate tax and generation skipping tax. The Family Business Coalition will be working with our member organizations to gather cosponsors to the bills. Check back in the future to see if your congressman or Senator is a cosponsor.