NOTE: State laws change frequently and the following information may not reflect recent changes in the laws. For current tax or legal advice, please consult with an accountant or an attorney since the information contained in this article is not tax or legal advice and is not a substitute for tax or legal advice.
Currently only a handful of states and the District of Columbia collect a state estate tax. Below is a chart that lists which states collected state estate taxes in 2009, 2010 and 2011 and which still do in 2012, along with each state's respective 2009, 2010, 2011 and 2012 state estate tax exemptions.
Summary of Changes to State Estate Tax Laws
Here is a summary of the changes that took effect with regard to state estate tax laws in 2009, 2010, 2011 and 2012, and changes that are set to take place in 2013:
- Delaware brought back its state estate tax effective for deaths occurring between July 1, 2009 and July 1, 2013.
- Two states saw their estate tax exemption increase on January 1, 2010: Rhode Island's exemption increased to $850,000 and Connecticut's exemption increased to $3,500,000.
- Two states saw their state estate tax disappear on January 1, 2010 due to state legislative action: Kansas and Oklahoma.
- On June 27, 2011, S.L. 2011-330 was signed into law by North Carolina Governor Beverly Perdue. This law clarifies that the North Carolina estate tax does not apply to the estates of decedents who died in 2010 but will apply to the estates of decedents dying on or after January 1, 2011 with a $5,000,000 exemption, which is indexed for inflation in 2012 so that the 2012 exemption is $5,120,000.
- Illinois saw its estate tax disappear on January 1, 2010 due to repeal of the federal estate tax, and despite the retroactive reinstatement of the federal estate tax, Illinois' tax did not come back automatically like in North Carolina. Nonetheless, the Illinois legislature acted quickly at the beginning of 2011 to reinstate the Illinois estate tax for the 2011 tax year with a $2,000,000 exemption. However, in December 2011 the Illinois legislature acted to increase the exemption to $3,500,000 in 2012 and $4,000,000 in 2013.
- *Hawaii brought back its state estate tax effective May 1, 2010. Note that although the Hawaii estate tax exemption appears to be set at $3,500,000, in calculating the tax due the tax really does not kick in until the estate exceeds $3,600,000.
- The Rhode Island estate tax exemption will be adjusted for deaths occurring on or after January 1, 2011 based on the percentage increase in the Consumer Price Index rounded to the nearest $5.00.
- Vermont's estate tax exemption was increased to $2,750,000 effective January 1, 2011.
- On May 4, 2011, the Connecticut estate tax exemption was retroactively decreased from $3,500,000 back down to $2,000,000 for deaths occurring on or after January 1, 2011.
- On June 30, 2011, Ohio Governor John Kasich signed the 2012 - 2013 budget into law, which eliminates the Ohio estate tax effective for deaths occurring on or after January 1, 2013.
- Effective January 1, 2012, the name of Oregon's death tax will change from an inheritance tax to an estate tax. In addition, while the current Oregon inheritance tax (soon to be estate tax) exemption of $1,000,000 will remain the same, the tax will only apply to the value of an estate in excess of $1,000,000 (under current law once an estate exceeds $1,000,000 the tax applies to the entire estate) and the estate tax rates will change such that the majority of estates valued between $1,000,000 and $2,000,000 will pay slightly less in taxes and estates valued over $2,000,000 will pay slightly more in taxes.
- Effective January 1, 2013, Maine's estate tax exemption will increase to $2,000,000 and the estate tax rate will be lowered.
State Inheritance Taxes
For information about state inheritance taxes, which are not the same as state estate taxes, refer to the State Inheritance Tax Chart.
State Estate Tax and Exemption Chart
| State | 2009 Exemption | 2010 Exemption | 2011 Exemption | 2012 Exemption |
| Connecticut | $2,000,000 | $3,500,000 | $2,000,000 | $2,000,000 |
| Delaware | $3,500,000 effective 07/01/2009 | $3,500,000 | $5,000,000 | $5,120,000 |
| District of Columbia | $1,000,000 | $1,000,000 | $1,000,000 | $1,000,000 |
| *Hawaii | No state estate tax | $3,600,000 effective 05/01/2010 | $3,600,000 | $3,600,000 |
| Illinois | $2,000,000 | No state estate tax | $2,000,000 | $3,500,000 |
| Kansas | $1,000,000 | No state estate tax | No state estate tax | No state estate tax |
| Maine | $1,000,000 | $1,000,000 | $1,000,000 | $1,000,000 |
| Maryland | $1,000,000 | $1,000,000 | $1,000,000 | $1,000,000 |
| Massachusetts | $1,000,000 | $1,000,000 | $1,000,000 | $1,000,000 |
| Minnesota | $1,000,000 | $1,000,000 | $1,000,000 | $1,000,000 |
| New Jersey | $675,000 | $675,000 | $675,000 | $675,000 |
| New York | $1,000,000 | $1,000,000 | $1,000,000 | $1,000,000 |
| North Carolina | $3,500,000 | No state estate tax | $5,000,000 | $5,120,000 |
| Ohio | $338,333 | $338,333 | $338,333 | $338,333 |
| Oklahoma | $3,000,000 | No state estate tax | No state estate tax | No state estate tax |
| Oregon | $1,000,000 | $1,000,000 | $1,000,000 | $1,000,000 |
| Rhode Island | $675,000 | $850,000 | $859,350 | $892,865 |
| Tennessee | $1,000,000 | $1,000,000 | $1,000,000 | $1,000,000 |
| Vermont | $2,000,000 | $2,000,000 | $2,750,000 | $2,750,000 |
| Washington | $2,000,000 | $2,000,000 | $2,000,000 | $2,000,000 |
