This bill amends the Tax Reform Code of 1971, specifically addressing the inheritance tax rates applicable to property transfers. The current law's provision for a flat rate of four and one-half percent for certain relatives and spouses has been replaced with a tiered schedule of rates that vary based on the date of the decedent's death. The new rates start at four and one-half percent for estates of decedents dying before July 1, 2026, and gradually decrease to zero percent for estates of decedents dying on or after July 1, 2035.

The bill introduces a detailed schedule that outlines specific rates for each year, with the rates decreasing incrementally over time. For example, the rate will drop to four and one-quarter percent for deaths occurring between July 1, 2026, and July 1, 2027, and will continue to decrease until it reaches zero percent for deaths after July 1, 2035. This change aims to provide a more gradual reduction in the inheritance tax burden over the coming years. The act is set to take effect immediately upon passage.

Statutes/Laws affected:
Printer's No. 925 (Jun 09, 2025): P.L.6, No.2