Yesterday, the DC Council voted to approve a sweeping tax cut bill which includes changes to the District’s estate tax.
Currently, estates in the District with a taxable value greater than $1 million are subject to DC estate tax. If the bill is signed into law, the estate tax exemption amount will increase from $1 million to $2 million in January 2016.
But, that’s not all…
The DC estate tax exemption amount will eventually be increased to be the same as the federal amount (now $5.34 million, indexed for inflation annually). This will not take effect, however, until additional revenue becomes available to cover the cost of at least twelve other tax cuts given higher priority. Therefore, it could be several or more years before the DC exemption is at that of the federal level.
DC Mayor, Vincent Gray, now has the option to sign the bill, veto it, or take no action. Upon signature or, if the Mayor takes no action, after 10 days the bill becomes an act. (There are more than enough votes to override a veto because the bill passed through the Council one vote shy of unanimously.)
Congress will then have 30 days to review the act and, if they take no action, the act becomes a law. If Congress disapproves of the act, they may pass a joint resolution, sending it to the President.
Click here for the complete list of proposed DC tax law changes.
We will, of course, keep you posted.