StateDeathTax.com

StateDeathTax.com is an informational site providing information on state death taxes (also known as state inheritance or estate taxes). This site is sponsored by Brentmark Software, the creator of the State Death Tax Manager. The State Death Tax Manager is available for licensing by companies who would like to include such calculations in their software products.

State Death Tax Manager

Estate Planning QuickView v. 2007.00, Retirement Plan Analyzer v. 2007.00, and Estate Planning Tools v. 2007.00, Kugler Estate Analyzer v. 2008.00, and PFP Notebook v. 2008.00 are the first programs by Brentmark Software to include the State Death Tax Manager. This feature handles state death tax calculations (estate taxes and inheritance taxes) for all 50 states and D.C. The State Death Tax Manager allows users to download the latest state death tax calcs so that they will always have current state death calculations.

The State Death Tax Manager is also included in the following non-Brentmark programs: NumberCruncher v. 2007.00, Steve Leimberg's Estate Planning QuickView v. 2007.00, and Steve Leimberg's Retirement Plan Analyzer v. 2007.00.

Patch Files

Changes to the State Death Tax Manager require that all users update to v. 1.50 or later. Without version 1.50 or later, you may not be able to download the latest data file. Users of Brentmark software products may update by using the Brentmark Update System or by downloading and running a patch file.

For Brentmark's Estate Planning Tools, Estate Planning QuickView, Retirement Plan Analyzer, Kugler Estate Analyzer, and PFP Notebook:
Click here to download the State Death Tax Manager v. 1.00 or later to v. 1.70 Patch
File: sdtm170.exe (841K)
V. 1.70 Changes: 1) Added ability to handle RI’s rule that the Taxable Gifts aren’t included in the Federal Estate Tax Limitation, 2) Illinois recursive calculation corrected to use 2001 to determine exemption; this affects $2M to $2.3M estates. Note: The v. 1.70 patch only updates the illustrations run with the State Death Tax Manager. The program calcs are not updated until new versions of the programs (Brentmark's Estate Planning Tools, Estate Planning QuickView, Retirement Plan Analyzer, Kugler Estate Analyzer, and PFP Notebook) themselves are released in the future (after 5/21/08).
V. 1.60 Changes: 1) Corrects an issue with CT calcs in cases where the Adjusted Taxable Gifts value increases the taxable amount above the taxable threshold and 2) Allows the calculation of state death taxes in states with decoupled state death taxes where there is no federal estate tax when it is assumed that the federal estate tax is repealed.
V. 1.50 Changes: With earlier versions than 1.50, you may not be able to download the latest state death tax data file. This affects Estate Planning Quickview 2007.00 or later and Retirement Plan Analyzer v. 2007.00 or later.

For NumberCruncher, Steve Leimberg's Estate Planning QuickView, and Steve Leimberg's Retirement Plan Analyzer:
Click here to download the State Death Tax Manager v. 1.00 or later to v. 1.70 Patch
File Name: lmsdtm170.exe (960K)
V. 1.70 Changes: 1) Added ability to handle RI’s rule that the Taxable Gifts aren’t included in the Federal Estate Tax Limitation, 2) Illinois recursive calculation corrected to use 2001 to determine exemption; this affects $2M to $2.3M estates. Note: The v. 1.70 patch only updates the illustrations run with the State Death Tax Manager. The program calcs are not updated until new versions of the programs (NumberCruncher, Steve Leimberg's Estate Planning QuickView, and Steve Leimberg's Retirement Plan Analyzer) themselves are released in the future (after 5/21/08).
V. 1.60 Changes: 1) Corrects an issue with CT calcs in cases where the Adjusted Taxable Gifts value increases the taxable amount above the taxable threshold , 2) Allows the calculation of state death taxes in states with decoupled state death taxes where there is no federal estate tax when it is assumed that the federal estate tax is repealed, 3) Adds ability to pick the destination folder where the State Death Tax Manager is located (which is useful for network installations).
V. 1.50 Changes: This updates the State Death Tax Manager from v. 1.00 or later to v. 1.50. This affects Steve Leimberg's Estate Planning Quickview 2007.00 or later and Steve Leimberg's Retirement Plan Analyzer v. 2007.00 or later.

Data Files

State Death Tax Manager users:
If your State Death Tax Manager cannot access data files on the internet because your firewall prevents it, you can download the latest data file here. After downloading the file to your computer, you should select Import Latest Data from the File menu of the State Death Tax Manager to open the file named statedeathtax.sdx which will be on your computer where you placed it.

Note: To download with Internet Explorer, you may need to right click on the following link. After right clicking, select Save Target As and then select Save. Be sure to note where the downloaded file is being saved.

Click here to download the 5/21/08 State Death Tax Manager data file

State Death Tax Manager File Changes:
5/21/08: Massachusetts marital QTIP changed to reflect that the state handles it differently than the Federal. Minnesota marital QTIP changed to match the federal rule. Added ability to handle Rhode Island’s rule that the Taxable Gifts aren’t included in the Federal Estate Tax Limitation (with future program updates also required to handle the RI change).
12/18/07: The Connecticut highest bracket was changed from $10,000,000 to $10,100,000.
9/17/07: The Oregon death tax updated to reflect the override of the federal exemption.
8/22/07: State Death Tax Manager support added to Estate Planning Tools and NumberCruncher. LA repealed inheritance tax effective 1/1/08. Removed credit for OH, already handled within brackets.
7/19/07: State Death Tax Manager support added to Steve Leimberg's Retirement Plan Analyzer.
7/18/07: DC maximum exemption changed to $1,000,000. State Death Tax Manager support added to Brentmark's Retirement Plan Analyzer.
6/18/07: Pennsylvania corrections made for spousal interest in nonmarital trust exemption, retirement benefits exclusion.
6/15/07: Nebraska inheritance tax rate changes made effective 1/1/2008, North Carolina corrections made for how the Federal Exemption is handled.
5/23/07: Nebraska 1/1/2007 estate tax repeal added.
4/14/07: Original State Death Tax Manager file made available.

Information Resources

FindLaw has links and citations to estate, inheritance, and similar tax laws for all 50 states and the District of Columbia on their State Laws: Estate Taxes page. Also see the information at CCH's State Estate Taxes page for some detail on each state's estate taxes.

The Wall Street Journal's lead editorial on 8/1/05, Estates of Pain, remarks on the states with death taxes noting that "At least 18 (see table) have refused to phase out their own estate levies to correspond with the scheduled reduction in the federal death tax, even though most states are collecting record tax receipts this year."

The 4/24/02 issue of The Wall Street Journal had a letter to the editor from John S. Barry of the Tax Foundation. The letter was titled Kill the Death Tax, Soon! In it, it was noted that 2001's tax bill phases out the federal credit for state taxes paid over the next three years much faster than it phases out the federal estate tax. Since 24 states have linked their state death tax to older versions of the federal tax code, the result is that heirs in those states will face a higher combined federal and state rate than under prior law. The total top rate thus is 54% in 2002 up to 60% in 2004 in most of those states although it goes up to 64% in Colorado!

The 8/1/02 issue of The Wall Street Journal had a Tax Report column on p. D2, States Take Action to Restore Estate Taxes to Boost Coffers, by Lynn Asinof. The article noted that 16 states (Washington, Oregon, Nebraska, Kansas, Minnesota, Wisconsin, Arkansas, New York, Vermont, Maine, Massachusetts, Rhode Island, Pennsylvania, New Jersey, Maryland, and Virginia) and the District of Columbia had taken steps to continue their state death tax so that it would not be effectively repealed by the federal law provision that phases out the federal credit for state death taxes. Other states are expected to be added to the list as well. There is wide variance among the states in how their state death taxes are structured. New Jersey is using a $675,000 exemption for all years and Pennsylvania has a $700,000 exemption rising to $1 million by 2006. Some states have taken temporary action for one or more years.
Comment: Note the predominance of high tax states from the northeast, upper midwest, and northwest that are planning to continue their state death taxes. There will be more incentive than ever for the wealthy to flee such states. Florida, for example, which also has no income tax, will be more attractive than ever.

See the 12/16/02 USA Today article by Sandra Block, Wealthy heirs to pay more state taxes.

The 5/30/03 issue of The Wall Street Journal had an editorial called The Death Tax Lives On. The editorial noted that 17 states and the District of Columbia have decoupled their state death tax from federal law: Kansas, Maine, Maryland, Massachusetts, Minnesota, Nebraska, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, Wisconsin and Washington, DC. The editorial noted that the states will have collection costs in the future when federal estate tax disappears. This is because valuation and other audit issues will become state-only issues. There may even be computation issues sooner when the state death tax credit disappears in 2005. Finally, it was noted that Florida is allowing its death tax to die resulting in even more reason to retire to Florida.

The 3/15/04 issue of Forbes has an article by Ashlea Ebeling, Florida or Bust, which was subtitled "Suddenly it matters a lot, for death taxes, where you die." It noted that there are 25 states which will have no state death tax in 2005 including Florida, California, and Texas. Details were given on the states which will continue to have state death taxes including three of the worst (New Jersey, Rhode Island, and Wisconsin) which only have exemptions of $675,000.