73rd OREGON LEGISLATIVE ASSEMBLY--2005 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 2086
A-Engrossed
House Bill 2629
Ordered by the House April 4
Including House Amendments dated April 4
Sponsored by Representative BOQUIST (at the request of
NFIB-Oregon)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
{ - Modifies threshold level of value of gross estate at
which inheritance tax return is required to be filed. - }
{ + Modifies Oregon inheritance tax. Imposes tax as
percentage of taxable estate. Establishes tax rate table for
taxable estates of decedents who die on or after January 1, 2007,
and before January 1, 2009. Establishes threshold level of value
of taxable estate for decedents who die on or after January 1,
2009. + }
A BILL FOR AN ACT
Relating to inheritance taxes; creating new provisions; amending
ORS 118.005, 118.007, 118.010, 118.100, 118.120 and 118.160;
and repealing ORS 118.009.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 118.005 is amended to read:
118.005. As used in ORS 118.005 to 118.840, unless the context
requires otherwise:
(1) 'Beneficiary' means the recipient of a beneficial interest
in property or the income therefrom transferred in a manner
taxable under ORS 118.005 to 118.840.
(2) 'Department' means the Department of Revenue.
(3) 'Director' means the Director of the Department of Revenue.
(4) 'Executor' means the executor, administrator, personal
representative, fiduciary, or custodian of property of the
decedent, or, if there is no executor, administrator, fiduciary
or custodian appointed, qualified and acting, then any person who
is in the actual or constructive possession of any property
includable in the estate of the decedent for inheritance tax
purposes whether or not such estate is subject to administration.
(5) 'Gross estate' has the meaning given that term in section
2031 of the Internal Revenue Code.
(6) 'Nonresident decedent' means an individual who is domiciled
outside of Oregon at the time of death.
{ - (7) 'Passes' includes any case where for the purposes of
ORS 118.005 to 118.840 a taxable transfer takes place or is
deemed to take place. - }
{ - (8) - } { + (7) + } 'Personal representative' means
personal representative as defined in ORS 111.005.
{ - (9) - } { + (8) + } 'Resident decedent' means an
individual who is domiciled in Oregon at the time of death. { +
(9) 'Taxable estate' has the meaning given that term in section
2051 of the Internal Revenue Code. + }
(10) 'Transfer' or 'transfer of property' means a transfer that
is subject to the federal estate tax imposed under subtitle B,
chapter 11 of the Internal Revenue Code.
SECTION 2. ORS 118.007 is amended to read:
118.007. Any term used in ORS 118.005 to 118.840 has the same
meaning as when used in a comparable context in the laws of the
federal Internal Revenue Code relating to federal estate taxes,
unless a different meaning is clearly required or the term is
specifically defined in ORS 118.005 to 118.840. Any reference in
ORS 118.005 to 118.840 to the Internal Revenue Code means the
federal Internal Revenue Code as amended and in effect on
December 31, { - 2000, - } { + 2004, + } except where the
Legislative Assembly has specifically provided otherwise.
SECTION 3. ORS 118.010 is amended to read:
118.010. (1) A tax is imposed upon { - a transfer of property
and any interest therein, within the jurisdiction of the state,
whether belonging to the inhabitants of this state or not, which
passes to or vests in any person or persons, or any body or
bodies politic or corporate, in trust or otherwise, or by reason
whereof any person or body politic or corporate shall become
beneficially entitled, in possession or expectation, to any
property or interest therein or income thereof. - } { + the
taxable estate of a decedent that is within the jurisdiction of
the state, as provided for in this section. + }
(2) The tax imposed under this section { - shall equal the
maximum amount of the state death tax credit allowable against
the federal estate tax under section 2011 of the Internal Revenue
Code. - } { + for decedents who die on or after January 1,
2007, and before January 1, 2009, shall be determined in
accordance with the following table: + }
________________________________________________________________
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
{ +
If Taxable Estate The Amount of Tax EqualOf Estate Value
Is at LeastBut Less ThInitial TaxPlus Tax RatGreater Than + }
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
{ +
$ 0 2,000,000 0 0.0% $ -
2,000,000 2,100,000 $ 04.00% 2,000,000
2,100,000 2,200,000 $ 4,0004.00% 2,100,000
2,200,000 2,300,000 $ 8,0004.00% 2,200,000
2,300,000 2,400,000 $ 12,0008.00% 2,300,000
2,400,000 2,500,000 $ 20,0008.00% 2,400,000
2,500,000 2,600,000 $ 28,0008.00% 2,500,000
2,600,000 2,700,000 $ 36,0012.00% 2,600,000
2,700,000 2,800,000 $ 48,0012.00% 2,700,000
2,800,000 2,900,000 $ 60,0012.00% 2,800,000
2,900,000 3,000,000 $ 72,0016.00% 2,900,000
3,000,000 3,250,000 $ 88,0016.00% 3,000,000
3,250,000 3,500,000 $ 128,0016.00% 3,250,000
3,500,000 3,750,000 $ 168,0016.00% 3,500,000
3,750,000 4,000,000 $ 208,0016.00% 3,750,000
4,000,000 4,500,000 $ 248,0016.00% 4,000,000
4,500,000 5,000,000 $ 328,0016.00% 4,500,000
5,000,000 6,000,000 $ 408,0016.00% 5,000,000
6,000,000 7,000,000 $ 568,0016.00% 6,000,000
7,000,000 8,000,000 $ 728,0016.00% 7,000,000
8,000,000 9,000,000 $ 888,0016.00% 8,000,000
9,000,000 10,000,000 $1,048,0016.00% 9,000,000
Above $10,000,000 $1,208,0016.00% Above $10,000,000 + }
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
________________________________________________________________
{ + (3) The tax imposed under this section for decedents who
die on or after January 1, 2009, shall equal 16 percent of the
taxable estate that exceeds $3.5 million. + }
{ - (3) - } { + (4) + } In the case of a resident decedent
owning property outside of the jurisdiction of this state at the
time of death, the tax imposed under this section shall be the
amount determined under subsection (2) { + or (3) + } of this
section multiplied by a ratio. The numerator of the ratio shall
be the sum of the appraised value of the decedent's real property
located in Oregon, tangible personal property located in Oregon
and intangible personal property located both in and outside of
Oregon. The denominator of the ratio shall be the total appraised
value of the decedent's gross estate.
{ - (4)(a) - } { + (5)(a) + } In the case of a nonresident
decedent owning property within the jurisdiction of this state at
the time of death, the tax imposed under this section shall be
the amount determined under subsection (2) { + or (3) + } of
this section multiplied by a ratio. The numerator of the ratio
shall be the sum of the appraised value of the decedent's real
property located in Oregon, tangible personal property located in
Oregon and intangible personal property located in Oregon. The
denominator shall be the total appraised value of the decedent's
gross estate.
(b) Intangible personal property of a nonresident decedent
{ - shall - } { + may + } not be included in the numerator of
the ratio used to determine the tax under this subsection if a
similar exemption is made by the laws of the state or country of
the decedent's residence in favor of residents of this state.
{ - (5) In the case of decedents dying before January 1,
2003, if federal estate tax credits other than the state death
tax credit result in no federal estate tax, no tax shall be
imposed under this section. - }
(6) { + + }Payment, in whole or in part, of inheritance and
estate taxes from funds of an estate or trust on any benefit
subject to tax under ORS 118.005 to 118.840 is not to be
considered as a further taxable benefit, when such payment is
directed by decedent's will or by a trust agreement.
{ - (7) If the federal taxable estate is determined by making
an election under section 2032 or 2056 of the Internal Revenue
Code or another provision of the Internal Revenue Code, or if a
federal estate tax return is not required under the Internal
Revenue Code, the Department of Revenue may adopt rules providing
for a separate election for state inheritance tax purposes. - }
SECTION 4. ORS 118.100 is amended to read:
118.100. (1) The tax provided for in ORS 118.010 shall be paid
to the Department of Revenue on the date the federal estate tax
is payable. If interest is paid on federal estate tax
installments resulting in a reduction of the federal estate tax,
and the department determines, pursuant to an amended return or
refund claim, that the amount of tax imposed by ORS 118.010 is
less than the amount theretofore paid, the excess tax shall be
refunded by the department with interest at the rate established
by ORS 305.220 for each month or fraction thereof during a period
beginning on the date the amended return or refund claim is filed
to the time the refund is made.
(2) If the amount of federal estate tax reported on a United
States estate tax return is changed or corrected by the Internal
Revenue Service or other competent authority, resulting in a
change in the { - maximum state death tax credit allowable
under the federal estate tax law - } { + amount of tax due
under ORS 118.005 to 118.840 + }, the executor shall report the
change or correction in federal estate tax to the department. If
the federal change or correction results in a reduction { - of
the allowable state death tax credit - } { + in the amount of
tax due + }, the report of the change or correction shall be
treated by the department as a claim for refund pursuant to ORS
305.270 and, notwithstanding the limitations of ORS 305.270,
shall be deemed timely if filed with the department within two
years after the federal correction was made. If the change or
correction results in an increase in the
{ - state death tax credit allowable on the federal estate tax
return - } { + amount of tax due + }, the department may issue
a notice of deficiency within two years after the federal change
or correction was made or within two years after receiving a
report of the federal change or correction, whichever is the
later. Any executor filing an amended federal estate tax return
shall also file an amended return with the department within 90
days thereafter.
(3)(a) In the case of an estate that contains property that is
valued under section 2032A of the Internal Revenue Code for
federal estate tax purposes (relating to the valuation of certain
farm or other property) and that ceases to qualify for valuation
under section 2032A, an additional tax under ORS 118.005 to
118.840 shall be imposed. The additional tax shall equal the
amount of { - any increase in the state death tax credit
allowable under section 2011 of the Internal Revenue Code - }
{ + the increase in the taxable estate of the decedent + } that
is attributable to the change in the value of the estate
resulting from the imposition of additional federal estate tax
under section 2032A { + , multiplied by the applicable tax rate
under ORS 118.010 + }.
(b) The department shall be notified of the disqualification of
the property from valuation under section 2032A in the same time
and manner as the federal Internal Revenue Service is notified of
the disqualification.
(c) The period for assessment of the tax imposed under this
subsection, including any penalty or interest, shall be two years
from the date on which the department receives the notice
described in paragraph (b) of this subsection.
(d) The other provisions of ORS 118.005 to 118.840 and ORS
chapter 305 shall apply to the additional tax imposed under this
subsection in the same manner in which those provisions apply to
the tax imposed under ORS 118.010.
(4) For purposes of this section, a change or correction of a
United States estate tax return is deemed to be made on the date
of the federal audit report.
(5) The executor shall, upon request of the department, supply
a copy of the United States estate tax return which the executor
has filed or may file with the federal government, or a copy of
any federal agent's report upon any audit or adjustment of the
United States estate tax return.
SECTION 5. ORS 118.120 is amended to read:
118.120. (1) In the case of an estate that contains a qualified
family-owned business interest, an additional tax shall be
imposed under ORS 118.005 to 118.840 if:
(a) The value of the interest was originally taken as a
deduction under section 2057(a) of the Internal Revenue Code in
computing the value of the taxable estate for federal estate tax
purposes; and
(b) An additional federal estate tax is imposed with respect to
the qualified family-owned business interest for the reasons
stated in section 2057(f) of the Internal Revenue Code.
{ - (2)(a) - } { + (2) + } The additional tax imposed under
this section shall equal the amount of any { - allowable
increase in the state death tax credit under section 2011 of the
Internal Revenue Code if the applicable percentage of the
family-owned business interest that is being disqualified under
section 2057(f) of the Internal Revenue Code were added to
the - } { + increase in the + } taxable estate for federal
estate tax purposes { + , multiplied by the applicable tax rate
under ORS 118.010 + }.
{ - (b) The applicable percentage to be used in calculating
the additional tax under this subsection shall equal the
applicable percentage used in calculating the additional federal
estate tax under section 2057(f)(2)(B) of the Internal Revenue
Code. - }
(3) The Department of Revenue must be notified of the qualified
family-owned business interest being made subject to additional
federal estate tax under section 2057(f) of the Internal Revenue
Code at the same time and in the same manner as the Internal
Revenue Service is notified of the additional federal tax.
(4) The period for assessment of the additional tax imposed
under this section, including any penalty or interest, shall be
two years from the date on which the department receives the
notice described in subsection (3) of this section.
(5) The other provisions of ORS 118.005 to 118.840 and ORS
chapter 305 shall apply to the additional tax imposed under this
section in the same manner in which those provisions apply to the
tax imposed under ORS 118.010.
SECTION 6. ORS 118.160 is amended to read:
118.160. (1) Except as provided in subsection (2) of this
section:
(a) An inheritance tax return is not required with respect to
the estates of decedents dying on or after January 1, 1987, and
before January 1, 2003, unless a federal estate tax return is
required to be filed; and
(b) An inheritance tax return is not required with respect to
the estates of decedents dying on or after:
(A) January 1, 2003, and before January 1, 2004, unless the
value of the gross estate is $700,000 or more;
(B) January 1, 2004, and before January 1, 2005, unless the
value of the gross estate is $850,000 or more;
(C) January 1, 2005, and before January 1, 2006, unless the
value of the gross estate is $950,000 or more; { - or - }
(D) January 1, 2006, { + and before January 1, 2007, + }
unless the value of the gross estate is $1 million or more { + ;
(E) January 1, 2007, and before January 1, 2009, unless the
value of the gross estate is $2 million or more; or
(F) January 1, 2009, unless the value of the gross estate is
$3.5 million or more + }.
(2) In every estate, whether or not subject to administration
and whether or not a federal estate tax return is required to be
filed, the executor shall at such times and in such manner as
required by rules of the Department of Revenue, file with the
department a return in a form provided by the department setting
forth a list and description of all transfers of property, in
trust or otherwise, made by the decedent in the lifetime of the
decedent as a division or distribution of the estate of the
decedent made within the three-year period ending on the date of
death or intended to take effect at or after death and any
further data that the department requires to determine
inheritance tax under this chapter.
SECTION 7. { + The amendments to ORS 118.005, 118.007,
118.010, 118.100, 118.120 and 118.160 by sections 1 to 6 of this
2005 Act apply to estates of decedents who die on or after
January 1, 2007. + }
SECTION 8. { + ORS 118.009 is repealed. + }
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