West Florida News

U.S. Representative Greg Steube from Florida has introduced the Family Business Legacy Act, which aims to equalize the tax code regarding estate and gift taxes. This legislative move seeks to resolve longstanding ambiguities affecting small and family-owned businesses, an issue that has persisted for over a decade. In 2010, the Internal Revenue Service (IRS) attempted to impose a gift tax on donations to 501(c)(4) organizations, exploiting unclear provisions in the law. In response, Congress enacted the Protecting Americans From Tax Hikes Act in 2015 to curb the IRS's reach. However, Rep. Steube believes further action is necessary to prevent IRS overreach in estate taxation for similar organizations.

The Family Business Legacy Act looks to address this by instituting an estate tax deduction for contributions to 501(c)(4), (c)(5), and (c)(6) entities, thereby shielding small and family-owned enterprises from unfair IRS gift taxation. "Small and family-owned businesses do more than just create jobs. Their support to charitable organizations and causes represents the best of the American spirit," stated Rep. Steube. He emphasized that his bill is crafted to ensure that such contributions are not subjected to gift taxes.

Rep. Rich McCormick from Georgia is co-leading the legislation. Organizations backing this bill include the National Taxpayers Union, Taxpayers Protection Alliance, Americans for Limited Government, and several others.

Ryan Ellis, President of the Center for a Free Economy, praised the bill for providing clarity and predictability to family businesses and expressed appreciation for Rep. Steube’s efforts. Similarly, Matthew Kandrach, President of Consumer Action for a Strong Economy, highlighted how the legislation strikes a balance between supporting small businesses and maintaining tax system transparency.

The Family Business Coalition, through its Chairman Palmer Schoening, applauded the act for aiming to simplify estate and gift tax laws and enable families to donate more freely. The bill has also been endorsed by Brandon Arnold, Executive Vice President of the National Taxpayers Union, for its potential to reduce complexity and penalties in estate tax systems.

According to Karen Kerrigan, President of the Small Business and Entrepreneurship Council, the act simplifies succession planning for family-owned businesses, allowing better preparation for future transitions. Meanwhile, David Williams, President of the Taxpayers Protection Alliance, noted the act's potential to provide much-needed tax simplification and predictability, thus helping American families preserve wealth across generations.

Readers interested in the full legislative text can access it online.