A piece of legislation in the Illinois House of Representatives could help ease a tremendous burden from family farms as they deal with estate taxes.

House Bill 4600, also known as the Family Farm Preservation Act, seeks to change Illinois’ farm estate tax rules.

Currently, when a farmer passes away and leaves their farm to someone else in the family, the entirety of the property is taxed if it exceeds a value of $4 million. That’s a relatively easy barrier to break given the price of land and farm equipment.

HB4600 would raise that value cap to $6 million and establish a true exemption for that dollar amount, meaning that $6 million worth of the estate’s property wouldn’t be taxed, only everything beyond that limit.

Per an April article from FarmWeek, Jeff Brooks, a farmer from Whiteside County, recently testified before members of the Illinois House Revenue and Finance Committee, having dealt with his father’s death in 2023 and the subsequent taxes on the family’s farm.

In an interview with the Republic-Times, Brooks spoke about his experience dealing with those taxes, noting that the cost just to work with the limited number of professionals focused on dealing with this sort of estate tax reached around $64,000, with the actual tax owed being far higher.

“We had to meet with some accountants and attorneys,” Brooks said. “We knew that there was going to be some implications there, but we didn’t realize how onerous the Illinois state tax was.”

This sort of tax on a farm family can lead to a harsh dilemma as the inheritors decide whether to take out a loan if they’re able or begin selling either property or other assets like equipment.

Brooks spoke about how he’s been faced with this situation, noting how this sort of choice can cause the death of certain family farms as they are forced to leave themselves with more land than equipment to work it or vice versa.

He further noted how unexpected deaths in particular can cause chaos for farm families as they are unable to do what little planning is already possible in these circumstances.

“Let’s say there’s a couple who are 65, they own the land and they’re renting it to their son,” Brooks said. “If they were to be in a car accident or something and the family wouldn’t be prepared for it, the son’s got all the machinery but then he’s got this big estate tax bill from his parents’ death. It could really, really impact and put people out of business, too.”

Local farmer and recently retired Illinois Farm Bureau President Rich Guebert also spoke about the issue.

Guebert noted how, between the federal and state estate tax, the state tax can be far more damaging given its current lack of a true exemption.

Guebert spoke to the fact that family farms are generally very asset rich but cash poor, owning substantial plots of land and similarly expensive machinery but still depending on the quality of their harvest from year to year.

He noted how a vast majority of farms in Illinois are family-owned – around 95 percent – and further said those families trying to pass their farm onto their children might well end up having to sell their property, impacting whatever profits they’re able to get year to year.

“If they cannot get a loan from the bank or have assets or cash that they can pay the estate tax, they need to sell some of the property, and that makes it very difficult on the family to continue farming because you reduce the acreage that you are farming, and that is really tough,” Guebert said.

He expressed his hopes for this bill, saying that the $6 million true exemption would be a major step in the right direction given how land prices have sharply increased in the past few years.

While this would be a big help for farm families, Guebert added that groups like the Illinois Farm Bureau would also likely push for further changes as inflation and the cost of land continue to change.

“We are very happy if we can get this across the finish line,” Guebert said. “It would really be a tremendous help to the agriculture community and landowners around the state of Illinois. We’ll continue to work to raise those levels even higher, but for right now this is what the legislators have talked about with our staff and our lobbyist groups. We’re satisfied at this point with that, but we’d love to see it increased even more.”

Guebert also spoke to the personal nature of the issue, himself having met with attorneys to consider how best to pass his family’s farm down to future generations.

“Passing on the family farm is not just about continuing the farming operation, it’s about preserving the family heritage and the way of life that we really enjoy,” Guebert said.

Additionally, Guebert addressed the dismissive feelings some might have about this issue given the tremendously large amounts of money the estate tax concerns.

“It lifts a great burden off of the family, particularly future generations and the generation that wants to pass it on,” Guebert said. “I do understand that there is a mindset out there that $6 million is a big number, and there’s no doubt… They think that we’re shirking our responsibility of paying our fair share. We pay taxes on all the profits that we do make. We pay real estate taxes going forward which is continuing to sky rocket.”

He further expressed his thanks for officials in the state and from both parties voicing their support for the bill, including State Representative David Friess (R-Red Bud) and State Senator Terri Bryant (R-Murphysboro).