Number: RS20853
Title: State Estate and Gift Tax Revenue
Authors: Steven Maguire, Government and Finance Division 
Abstract: P.L. 107-16, the Economic Growth and Tax Relief Reconciliation Act of 2001, repeals the federal estate tax for decedents that die in 2010. In addition, the act repealed the credit for state estate taxes for decedents dying after December 31, 2004, and replaces the credit with a deduction. In most states, the repeal of the tax and the significant increase in the federal exclusion will also repeal or diminish state estate, inheritance, and gift taxes. Some state budgets depend on the estate tax more than others. As a percentage of total tax revenue collected from FY1977 to FY2005, state estate tax contributions ranged from 0.40% in New Mexico to 3.31% in New Hampshire. When the federal "credit for state death taxes" changed to a deduction (in 2005), 26 states, including Alaska and New Hampshire, no longer levied estate taxes. In the 110th Congress, H.R. 411 would repeal the sunset for estate tax repeal. The Administration's FY2008 budget proposes repealing estate tax permanently. Repeal of the sunset would also retain other modifications to the valuation of assets at death implemented by EGTRRA.
Pages: 6
Date: March 13, 2007