‘Death tax’ hurts Fresno County’s farmers, ranchers, small businesses and homeowners

In November 2020, California’s Constitution was changed with the narrow passage of Proposition 19 — quietly bringing back the death tax for the first time in 35 years.

While Prop. 19 contained some positive elements, a little noticed aspect of the initiative changed the law regarding parent-to-child and grandparent to grandchild transfers of property. In the event of the death of a parent, the result can be a huge, unexpected tax bill while a family mourns the loss of a loved one.

As county assessors, our job is to determine the value of taxable property. In doing so, we are governed by the California Constitution, the laws passed by the Legislature and the rules adopted by the State Board of Equalization.

So we knew the changes to the Constitution that brought back the death tax would have a significant impact for the farmers, ranchers, small businesses and homeowners we represent. Now, when a parent passes away and leaves behind a family home or other non-residential property, the property may be reassessed to current market value — triggering a massive property tax increase.

Since these changes to the Constitution went into effect this past February, we have heard from families who are confused and shocked by the unexpected death tax. Even worse, we know too many families cannot afford the massive property tax increase, which could force them into an unwanted sale of a family business, farm, ranch, or home.

Family farms and ranches were particularly at risk, especially those consisting of more than one parcel, which is not uncommon for even small family-run operations. To protect California family farmers and ranchers, we worked with the Legislature to pass Senate Bill 539. This law clarifies that each parcel of a family is individually entitled to exclusion from reassessment when transferred between generations upon the death of a parent.

SB 539 is a good first step, but it doesn’t solve the problem of the death tax — even for family farms and ranches. That’s why as county assessors we are supporting the Repeal the Death Tax Act, which is gathering signatures to qualify for the November 2022 statewide ballot.

The Repeal the Death Tax Act will bring back the constitutional taxpayer protections that Californians relied on for nearly 35 years, while preserving the benefits of SB 539 for California’s farmers and ranchers.

The exclusion from reassessment for “other property” had previously been capped at $1 million of assessed value, but the Repeal the Death Tax Act adjusts that figure (set in 1986) for inflation and now excludes up to $2.4 million of assessed value of property other than the principal residence.

The passing of a parent is always a heavy loss. We believe it should not cause the possible loss of a family farm, business or home in order to pay the death tax.

The Repeal the Death Tax Act will restore the ability of parents to pass on what they worked so hard to build to their children without triggering reassessment and a huge property tax increase.

Join us in signing the petition for the Repeal the Death Tax Act and visit HJTA.org/RepealTheDeathTax to learn other ways to help.