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 which was supposed to expire on July 1, 2013. Nonetheless, in the spring of 2013 the Delaware legislature acted to eliminate the sunset of Delaware's estate tax.
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Ohio's estate tax was repealed on January 1, 2013.
Illinois' estate tax came back on January 1, 2011 with a $2,000,000 exemption which increased to $3,500,000 in 2012 and $4,000,000 in 2013.
The state estate tax exemption for Hawaii currently follows the federal estate tax exemption.
Tennessee's estate tax is scheduled to disappear on January 1, 2016.
In July 2013, North Carolina's estate tax exemption was repealed retroactively to January 1, 2013.
Beginning in 2014, Washington's $2,000,000 estate tax exemption will be indexed for inflation.
Lowest and Highest State Estate Tax Exemptions
For the 2013 tax year, New Jersey has the lowest exemption at $675,000. The estate tax exemptions for the other states that collect state estate taxes range from $910,725 to $5,250,000, 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, 2014:
- District of Columbia
- New Jersey
- New York
- Rhode Island
To find out the current state estate tax exemption for each jurisdiction listed above, refer to the State Estate Tax and Exemption Chart.
To find out the current state estate tax top rates, refer to the 2014 State Death Tax Exemption and Top Tax Rate Chart.
To find out which states collect a state inheritance tax, which is different from a state estate tax, refer to the State Inheritance Tax Chart.