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HARTFORDBUSINESS.COM | MARCH 10, 2025 17 FOCUS | TA X PL ANNING & BUSINES S SUCCES SION million exemption threshold but a flat 16% rate. New York has a $6.94 million exemption threshold, but its tax rate is graduated, starting at 3.06% and rising to 16%. Six states have an "inheritance tax," an alternate tax imposed on bequests — gifts made as part of a will or trust. New Jersey and Kentucky have the highest top marginal rates at 16%, according to the Tax Foundation. There are two bills proposed in the state General Assembly for the 2025 session that, if approved, would significantly alter Connecticut's estate tax. House Bill 6461 would eliminate the estate and gift tax, while H.B. 5152 would lower the exemption threshold to $3.6 million and eliminate the caps on estate and gift taxes. The latter bill would use tax revenue raised by the lower estate tax threshold to support early childhood education. Both bills were referred to the legislature's Finance, Revenue and Bonding Committee, where no action has been taken on them. That is not a surprise to Liberti. "Almost every year, there are tax proposals like these bills," he said. "Few pass. It is an arduous path to enact estate tax changes, with many interest groups weighing in. I have learned to employ a wait-and-see doctrine." Act now Opinions vary among tax profes- sionals as to whether the TCJA will be extended, or even made perma- nent, by the end of the year. Liberti says "it seems likely" they will be extended, since Republicans control both chambers of Congress. Zahansky agrees. Zeger, however, isn't so sure they will be made permanent. All agree, however, that waiting to find out is bad succession planning. "The fact is that, especially with tax law, we don't ever consider it perma- nent," Zeger said. Especially for a business being transferred to a family member, without careful planning, "the family may be forced to finance the busi- ness assets or sell the business to pay the estate tax, which is due nine months after one's death," Liberti said. Zahansky said the estate tax doesn't affect most Americans, but it's vital for business succession plan- ning that business owners prepare well in advance. "If you're a medium-sized business and you haven't had a valuation of your business done, you need to know what it's valued at and how it fits into your estate, because a lot don't," he said. "If you're going to go down the path of a succession plan, know the legitimate market value of your busi- ness. Have it done by a third party and understand the market value." He added that another reason to have a succession plan in place is so you "don't leave that burden on your heirs. That can be very disruptive for those that might be inheriting a business they didn't know anything about." A SMALL BUSINESS GIVEAWAY 2025 One Connecticut small business will win a full page ad in the Small Business Issue of HBJ on May 5 and 12 months of free Cash Management Services from TSB. The winner will be notified around March 31st. NOMINATIONS OPEN JANUARY 13 - MARCH 14 SCAN HERE TO NOMINATE PRESENTED BY ANNUAL CT ESTATE AND GIFT TAX REVENUES 2016 2017 2018 2019 2020 2021 2022 2023 2024 $350M $300M $250M $200M $150M $100M TAX REVENUES Source: CT Dept. of Revenue Services LAST CHANCE TO NOMINATE!