Saving Farmers from the Death Tax in the 9th District

The family farmer in the 9th district is the backbone of North Carolina agriculture and agriculture is the biggest employer in the 9th district. Many of the people of the 9th district live on family farms that have been in the family for generations. (My family has a small farm that has been in the family for over a hundred years.)  But for a long time the “death tax” would keep some farmers from passing their farms to their children because they could not pay the tax and would have to sell the farm to pay the tax!

Death to the Death Tax

Most people focus on the federal estate tax, which thankfully is no longer the burden it was because the amount that can be transferred before the tax kicks in has been increased. But for years North Carolina also had an additional death tax.

North Carolina’s version of the death tax was known as the inheritance tax. It was very different from the federal estate tax because it was not just a death tax, it singled out any heir who was not a child of the deceased for particularly harsh treatment and was probably more burdensome to the poor than the well to do who expected their estate to be taxed.

Unlike the federal estate tax which had an exemption so that those with small inheritances were not affected, the NC inheritance tax was imposed on any inheritance received by someone other than a child of the deceased with a tax that applied from the very first dollar inherited.

If two elderly sisters shared a $5000 trailer and the sister who owned the trailer died and left the trailer to her sibling, an inheritance tax would be imposed.

The NC inheritance tax was enacted when the legislature was controlled by Democrats and the leaders of that party did not want to see it repealed. Trying to repeal a longstanding tax is never easy, but I knew that North Carolina farmers and many other business owners felt the death tax was a particularly unfair tax and I certainly agreed with them.

But most legislators were unaware of how the inheritance tax actually worked, so I took copies of the return and instructions and showed legislators how unfair the tax was, not just to rich people, but to poor people a well. Once I explained to other legislators how the tax actually worked, a number of Democrats quit following their leaders and voted with the Republicans to repeal the tax.

Being a CPA who works with taxes was a big advantage in explaining how unfair the tax was and in selling the benefits of eliminating it. Repealing the tax made NC a much more business friendly state and made us competitive with the other states that encourage people to retire there by not penalizing their family when someone dies.

I was happy to have had the opportunity to sponsor and get passed legislation to end the inheritance tax, helping many families avoid the unfair burden it imposed and helping them preserve their family farms and businesses.


The Landowner Protection Act / Tort Reform 101

When I was first elected, farmers had become very wary of letting others use their land because of fear of lawsuits if an accident happened. Scoutmasters, schoolteachers and others found it harder and harder to find open space that could be used for outdoor activities.

Both landowners and those who wanted easier access to outdoor recreation were unhappy with the situation, but attempts to pass legislation to limit landowner liability failed because of strong opposition from the trial lawyers.

I believed one of the reasons I was elected was that my predecessor, a trial lawyer, voted against a bill so many people in the district wanted, so I wanted to do everything I could to get it passed. I sponsored The Landowner Protection Act (House Bill 127, 1995), a simple bill “to encourage owners of land to make land and water areas available to the public at no cost for educational and recreational purposes by limiting the liability of the owner to persons entering the land for those purposes.”

I sponsored the Landowner Protection Act as a freshman legislator, and to everyone’s surprise I got it passed. How is a long story, but now, when a group wants to hold a

  • turkey shoot
  • ham radio picnic
  • or go fishing or camping or simply hiking

they find it far easier to find landowners willing to share their land.

Horse Farm NC 9th District

The Equine Sequel to the Landowner Protection Act

Farmers were delighted with the passage of the Landowner Protection Act, but horse owners wanted something more. Horses are amazing animals but they are large and when spooked can easily harm themselves or others. Horse owners and others wanted a means of lowering their liability for events involving horses that were beyond their control.

As was the case with the Landowner Protection Act, there had been attempts to pass legislation to help limit the liability of those who own horses or sponsor equine activities, but they had failed. H176, introduced in 1997, might have failed as well but I learned a powerful Democrat Senator had a friend with a roller rink who had similar concerns about potential liability relating to events beyond his control.

I told the Farm Bureau representatives who were helping with the horse bill that if the horses could skate, the bill could pass. The horses could skate and H176, Short Title: Equine Activities/Skating Rink Liability, passed with surprising ease.