Which States Still Collect a State Estate Tax?

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 an estate tax at the state level.

Summary of Changes in State Estate Tax Laws

Four states saw their state estate taxes disappear on January 1, 2010: Illinois, Kansas, North Carolina and Oklahoma; however, estate taxes came back for both Illinois and North Carolina on January 1, 2011.

Hawaii enacted an estate tax effective May 1, 2010, and before that Delaware enacted an estate tax effective July 1, 2009.

Rhode Island's estate tax exemption increased from $675,000 to $850,000 on January 1, 2010, and will be indexed for inflation in future years.

In May 2011 the Connecticut estate tax exemption was lowered from $3,500,000 down to $2,000,000 and the reduction was made retroactive to January 1, 2011.

Ohio's estate tax is currently set to be repealed on January 1, 2013.

Illinois' estate tax came back on January 1, 2011 with a $2,000,000 exemption which will increase to $3,500,000 in 2012 and $4,000,000 in 2013.

North Carolina's estate tax exemption will follow the federal exemption.

Lowest and Highest State Estate Tax Exemptions

For the 2012 tax year, Ohio has by far the lowest exemption at $338,333, New Jersey has the next lowest at $675,000, Hawaii has an effective $3,600,000 exemption, and North Carolina now has the highest exemption at $5,120,000. (Note that it is currently unclear whether Delaware's estate tax exemption will be $3,500,000 or $5,000,000.)

The estate tax exemptions for the other states that collect state estate taxes range from $892,865 to $2,000,000, with the majority offering only a $1,000,000 exemption.

Current List of States That Collect an Estate Tax at the State Level

Here is the list of jurisdictions that collect a state estate tax as of January 1, 2012:

1. Connecticut
2. Delaware
3. District of Columbia
4. Hawaii
5. Illinois
6. Maine
7. Maryland
8. Massachusetts
9. Minnesota
10. New Jersey
11. New York
12. North Carolina
13. Ohio
14. Oregon
15. Rhode Island
16. Tennessee
17. Vermont
18. Washington

To find the current state estate tax exemption for each jurisdiction listed above, refer to the State Estate Tax and Exemption Chart.