Which States Have No Estate Tax?


Quick Answer

California, Arizona, Nevada, Utah and Idaho are among the many states that do not have an inheritance tax, as of 2014, according to the Tax Foundation. Montana, Wyoming, North Dakota, South Dakota and Colorado are others. In fact, most states do not assess inheritance tax.

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Full Answer

Only 15 states assess inheritance tax, including Washington, Oregon, Minnesota, Illinois and Tennessee. Others include New York, Maine, Vermont, Massachusetts and Rhode Island. Connecticut, New Jersey, Delaware, Maryland and Hawaii are others. Washington D.C. also has an inheritance tax. No other states assess tax on inheritances, according to the Tax Foundation.

Of those states that assess the tax, Nebraska’s inheritance tax is the highest; the tax is 18 percent for inheritance transfers to non-relatives, notes the Tax Foundation. New Jersey and Kentucky, which assess 16 percent of the inheritance passed on to beneficiaries, follows a close second.

Notably, Indiana repealed its inheritance tax in 2013, making the abolishment retroactive to Jan. 1, 2013, according to the Tax Foundation. Other states have presented similar legislation in recent years, including Tennessee, a state with an inheritance tax of 5.5 to 9.5 percent. Tennessee’s estate tax is set to phase out completely in 2016. Maryland, New York, Minnesota and Washington, D.C. all have initiated reforms in the past.

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