At a May 31 hearing before a House subcommittee, Karen Madonia testified that the tax could cause her family break up the eight-branch, 92-employee company.
HARDI member Karen Madonia recently
testified before Congress, asking it to kill the “death tax.”
Madonia is chief financial officer of Aurora, Ill.-based
Illco Inc., and co-chair of the Heating, Airconditioning and Refrigeration
Distributors International’s Government and Trade Relations Committee. At a May
31 hearing before a House subcommittee, she told representatives that the tax could cause
her family break up the eight-branch, 92-employee company just to pay the tax bill on
the company her father started in 1973.
“That would likely mean shutting
down branches, laying off workers or liquidating inventory just to be able to
pay a tax bill that only occurred because an owner died,” Madonia said. “Even
worse, our company might have to be sold outright.”
For the last four years, she
said, her father has tried to work on a succession plan for the $40 million
business, only to have to modify it as the tax laws changed.
“My dad has spent countless
hours and entirely too much money trying to navigate the estate planning
waters,” she said. “Instead of focusing on growing his business so he can open
more branches and employ more people, he has had to strategize about how to
pass his company to his kids without having to dismantle it.”
HARDI has long advocated for
the estate tax’s repeal or at least clarifications making it more
favorable to small businesses.
“The estate tax and the
constant changing of the formula for determining its rate places an undue
burden on businesses in our industry and small businesses everywhere,” said Talbot
Gee, HARDI’s executive vice president and chief operating officer. “A
significant portion of our members are family businesses, and they generate an
estimated 80 percent of the dollar value of HVACR products sold through
distribution. There has to be some clarity about the estate tax and some
consistency regarding the rate if it isn’t repealed.”