Oregon Inheritance Tax Laws
Posted by Priscilla
In Oregon an inheritance tax is applied to those that has passed since January 1, 1998. The tax is paid based on the maximum amount of the state death tax credit allowable against the federal estate tax under section 2011 of the Internal Revenue Code. You are also taxed on property owned that is outside of Oregon. The taxes are due at the same time when the federal estate taxes are due.
On August 26, 2003, the 2003 Oregon Legislature passed HB 3072 and it went into effect on November 26, 2003. This bill adopts the federal inheritance tax changes included in the Taxpayer Relief Act of 1997 (TRA 97) and the Internal Revenue Service Restructuring and Reform Act of 1998. Oregon inheritance taxes will be determined under Internal Revenue Code in effect December 31, 2000.
Inheritance tax exemptions and rates may vary depending on who received the property, i.e. the decedent’s spouse may be taxed at a lower rate than would be a friend of the decedent. A number of states are phasing out their inheritance tax systems.
In Oregon the executor is a personal representative, administrator, fiduciary, or custodian of the property, or any person who has actual or constructive possession of the decedent’s property. The executor is responsible for making payments on the inheritance tax. There is a catch however. For tax years 2001 and prior, the Oregon inheritance tax (Form IT-1) return was required to be filed, whenever a federal estate tax return (Form 706) was required to be filed. For deaths on or after January 1, 2002, Oregon’s filing requirements are different from the federal filing requirements. For 2002, a return is required if the taxable estate is $1,000,000 or more.
Those that support inheritance tax say that it is not a death tax per say but a tax on a transfer of wealth that was received upon the death of a person. Those that are against it state that the full estate, not the amount transferred, increases the effective transfer tax rate. It should be less than the value of the estate.
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