Ohio's death tax is dead. At least it will be as of January 1, 2013.

Ohio Governor John Kasich signed a two-year budget bill which contained a repeal of Ohio's death tax. The bill essentially ends the Ohio estate tax by limiting its application as of January 1, 2013; estates of persons dying on or after that date will not have to pay estate taxes.

Ohio currently levies taxes on Ohio residents' estates when the value of the taxable estate exceeds $338,333. This $338,333 estate tax exemption is one of the lowest in the country. Advocates of repealing the death tax argue that wealthy residents move out of Ohio in order to avoid the state's estate tax. Legislators included the repeal of death taxes in the budget bill in order to end this alleged exodus from Ohio.

Opponents of the repeal argue that eliminating Ohio's death tax will hurt local governments. Eighty percent of estate tax revenues are distributed to local governments, and 20 percent goes to Ohio's General Revenue Fund.