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Julie Garber

State Estate Taxes - Does Arizona Have an Estate Tax?

By June 28, 2009

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Does Arizona have an estate tax? The answer is no, currently Arizona doesn't collect a state estate tax, although things were different a few years ago before major changes took effect with regard to federal estate tax laws. So what do federal estate tax laws have to do with Arizona estate taxes? Prior to January 1, 2005, Arizona collected a separate state estate tax, called a "pick up tax," that was actually equal to a portion of the overall federal estate tax bill.

Effective January 1, 2005, the pick up tax was officially phased out under the provisions of the Economic Growth and Tax Relief Reconciliation Act ("EGTRRA"). In response to the changes in federal law that phased out the pick up tax, some states that used to collect a pick up tax chose to enact laws that allow the state to still collect a state estate tax. But Arizona, like 32 other states, did nothing. In fact, in 2006 the Arizona legislature took things one step further and permanently repealed the estate tax provisions of the Arizona statutes.

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