Bill Text: NJ S1279 | 2010-2011 | Regular Session | Introduced
Bill Title: Repeals the New Jersey estate tax.
Spectrum: Partisan Bill (Republican 3-0)
Status: (Introduced - Dead) 2010-02-08 - Introduced in the Senate, Referred to Senate Budget and Appropriations Committee [S1279 Detail]
Download: New_Jersey-2010-S1279-Introduced.html
Sponsored by:
Senator ANTHONY R. BUCCO
District 25 (Morris)
Co-Sponsored by:
Senator Kyrillos
SYNOPSIS
Repeals the New Jersey estate tax.
CURRENT VERSION OF TEXT
As introduced.
An Act eliminating the New Jersey estate tax and repealing parts of the statutory law.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. The following sections are repealed:
R.S.54:38-1 through R.S.54:38-7; and
R.S.54:38-10 through R.S.54:38-16.
2. This act shall take effect immediately and shall apply to the estate of any resident decedent dying after December 31, 2009.
STATEMENT
This bill provides for the repeal of the New Jersey estate tax and would apply to the estate of any resident decedent dying on or after January 1, 2010.
Currently, New Jersey imposes an estate tax based on a credit historically allowed by federal law against the federal estate tax for the payment of inheritance taxes or other legacy taxes imposed by the states. However, under federal tax code changes enacted in 2001, the federal credit by which New Jersey's estate tax is calculated was phased-out over a four year period, with a full repeal of the federal credit taking effect in 2005. Thus, but for the enactment of P.L. 2002, c.31 (C.54:38-1et seq.), which "decoupled" the New Jersey estate tax from the 2001 federal tax law changes, New Jersey's estate tax would have been completely eliminated in 2005.
While prior to 2001, all states imposed an estate tax which allowed the states to "pick up" a share of federal estate tax revenues through the federal credit mechanism, only 15 states, including New Jersey, elected to "decouple" from the federal estate tax in 2001, effectively negating the intent of the U.S. Congress to repeal the "pick up" tax. Moreover, only two states, New Jersey and Maryland, currently levy an estate tax similar to the one in effect prior to 2001 while also separately imposing a State inheritance tax. With this legislation, New Jersey would join the majority of states which have chosen to follow the changes implemented at the federal level and eliminate an estate tax based on the federally repealed credit.
