Bill Text: NJ A397 | 2014-2015 | Regular Session | Introduced

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Bill Title: Repeals the New Jersey estate tax.

Spectrum: Moderate Partisan Bill (Republican 6-1)

Status: (Introduced - Dead) 2014-01-16 - Introduced, Referred to Assembly Appropriations Committee [A397 Detail]

Download: New_Jersey-2014-A397-Introduced.html

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ASSEMBLY, No. 397

STATE OF NEW JERSEY

216th LEGISLATURE

 

PRE-FILED FOR INTRODUCTION IN THE 2014 SESSION

 

 

Sponsored by:

Assemblyman  ANTHONY M. BUCCO

District 25 (Morris and Somerset)

Assemblyman  TROY SINGLETON

District 7 (Burlington)

 

 

 

 

SYNOPSIS

     Repeals the New Jersey estate tax.

 

CURRENT VERSION OF TEXT

     Introduced Pending Technical Review by Legislative Counsel

  

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  The following sections are repealed: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.