Reuven Shmerling, who was murdered on the eve of Sukkot in Kafr Qasim, was recognized Sunday as a victim of terrorism.
According to the Defense Ministry, the decision was made based on the results of the Shin Bet's investigation, which found the murder was nationalistically motivated.
The Shmerling family will now be eligible for all rights and assistance given to terror victims' families.
Shmerling, 70, of Elkana, was found on Wednesday in a coal storehouse belonging to his family in the Kafr Qasim industrial zone, with signs of severe violence on his body.
It was initially suspected that workers from the territories who worked for him beat him to death over a monetary dispute.
But the Shin Bet said the evidence gathered pointed to an act of terrorism. Two Palestinian suspects from Qabatiya were arrested several days later.