House Bill 1394 is before the Pennsylvania House Finance Committee, seeking to scrap the state’s inheritance tax after complaints that heirs can face large cash bills on illiquid assets such as homes and land.
A 4.5% tax applies to children and other lineal heirs, 12% to siblings and 15% to other beneficiaries; for a Lancaster County home at the $365,000 median value, a child could owe more than $16,000.
Betty Hillard, 92, said her children could owe nearly $35,000 on her reassessed $770,000 property, underscoring lawmakers’ argument that families can be asset-rich but cash-poor.
The tax remains a major budget obstacle: Pennsylvania collected $154.5 million in June and $1.9 billion in fiscal 2025-26, making full repeal difficult without spending cuts or higher taxes elsewhere.
Republican and Democratic co-sponsors say repeal is unlikely soon, but the bill could help drive narrower changes such as lower rates or exemptions for smaller estates.