As used in ORS
118.005 to 118.840, unless the context requires otherwise:
(1) “Beneficiary” means the recipient of a beneficial interest in
property or the income therefrom transferred in a manner taxable under
ORS 118.005 to 118.840.
(2) “Department” means the Department of Revenue.
(3) “Director” means the Director of the Department of Revenue.
(4) “Executor” means the executor, administrator, personal
representative, fiduciary, or custodian of property of the decedent, or,
if there is no executor, administrator, fiduciary or custodian appointed,
qualified and acting, then any person who is in the actual or
constructive possession of any property includable in the estate of the
decedent for inheritance tax purposes whether or not such estate is
subject to administration.
(5) “Gross estate” has the meaning given that term in section 2031
of the Internal Revenue Code.
(6) “Nonresident decedent” means an individual who is domiciled
outside of Oregon at the time of death.
(7) “Passes” includes any case where for the purposes of ORS
118.005 to 118.840 a taxable transfer takes place or is deemed to take
place.
(8) “Personal representative” means personal representative as
defined in ORS 111.005.
(9) “Resident decedent” means an individual who is domiciled in
Oregon at the time of death.
(10) “Transfer” or “transfer of property” means a transfer that is
subject to the federal estate tax imposed under subtitle B, chapter 11 of
the Internal Revenue Code. [1959 c.418 §7; 1969 c.520 §23; 1971 c.567 §4;
1973 c.344 §1; 1975 c.762 §1; 1977 c.666 §1; 1997 c.99 §6] Any term used
in ORS 118.005 to 118.840 has the same meaning as when used in a
comparable context in the laws of the federal Internal Revenue Code
relating to federal estate taxes, unless a different meaning is clearly
required or the term is specifically defined in ORS 118.005 to 118.840.
Any reference in ORS 118.005 to 118.840 to the Internal Revenue Code
means the federal Internal Revenue Code as amended and in effect on
December 31, 2000, except where the Legislative Assembly has specifically
provided otherwise. [2003 c.806 §2]Note: Section 3, chapter 806, Oregon Laws 2003, provides:
Sec. 3. (1) Section 2 of this 2003 Act [118.007] applies to
decedents dying on or after January 1, 1998, and to inheritance taxes
imposed on transfers of property occurring due to decedents dying on or
after January 1, 1998.
(2) Except where the Legislative Assembly has provided otherwise,
the effective and applicable dates, and the exceptions, special rules and
coordination with the Internal Revenue Code, as amended, relative to
those dates, contained in the Taxpayer Relief Act of 1997 (P.L. 105-34)
and the Internal Revenue Service Restructuring and Reform Act of 1998
(P.L. 105-206), apply for purposes of ORS 118.005 to 118.840, to the
extent they can be made applicable, in the same manner as they are
applied under the Internal Revenue Code and related federal law. [2003
c.806 §3] The Legislative Assembly finds that
significant recent changes have been made in federal estate tax laws. The
Legislative Assembly further finds that an unintended consequence of
these federal law changes has been to create difficulties in the
administration and enforcement of the Oregon inheritance tax. The
Legislative Assembly declares that ORS 118.007 and section 3, chapter
806, Oregon Laws 2003, and the amendments to ORS 118.010, 118.160 and
118.230 by sections 6, 7 and 8, chapter 806, Oregon Laws 2003, are needed
to ensure that the level of tax compliance with the Oregon inheritance
tax is at the level that Oregonians expect from a fair and balanced tax
system. [2003 c.806 §1a](1) A tax is imposed upon a
transfer of property and any interest therein, within the jurisdiction of
the state, whether belonging to the inhabitants of this state or not,
which passes to or vests in any person or persons, or any body or bodies
politic or corporate, in trust or otherwise, or by reason whereof any
person or body politic or corporate shall become beneficially entitled,
in possession or expectation, to any property or interest therein or
income thereof.
(2) The tax imposed under this section shall equal the maximum
amount of the state death tax credit allowable against the federal estate
tax under section 2011 of the Internal Revenue Code.
(3) In the case of a resident decedent owning property outside of
the jurisdiction of this state at the time of death, the tax imposed
under this section shall be the amount determined under subsection (2) of
this section multiplied by a ratio. The numerator of the ratio shall be
the sum of the appraised value of the decedent’s real property located in
Oregon, tangible personal property located in Oregon and intangible
personal property located both in and outside of Oregon. The denominator
of the ratio shall be the total appraised value of the decedent’s gross
estate.
(4)(a) In the case of a nonresident decedent owning property within
the jurisdiction of this state at the time of death, the tax imposed
under this section shall be the amount determined under subsection (2) of
this section multiplied by a ratio. The numerator of the ratio shall be
the sum of the appraised value of the decedent’s real property located in
Oregon, tangible personal property located in Oregon and intangible
personal property located in Oregon. The denominator shall be the total
appraised value of the decedent’s gross estate.
(b) Intangible personal property of a nonresident decedent shall
not be included in the numerator of the ratio used to determine the tax
under this subsection if a similar exemption is made by the laws of the
state or country of the decedent’s residence in favor of residents of
this state.
(5) In the case of decedents dying before January 1, 2003, if
federal estate tax credits other than the state death tax credit result
in no federal estate tax, no tax shall be imposed under this section.
(6) Payment, in whole or in part, of inheritance and estate taxes
from funds of an estate or trust on any benefit subject to tax under ORS
118.005 to 118.840 is not to be considered as a further taxable benefit,
when such payment is directed by decedent’s will or by a trust agreement.
(7) If the federal taxable estate is determined by making an
election under section 2032 or 2056 of the Internal Revenue Code or
another provision of the Internal Revenue Code, or if a federal estate
tax return is not required under the Internal Revenue Code, the
Department of Revenue may adopt rules providing for a separate election
for state inheritance tax purposes. [Amended by 1955 c.727 §1; 1959 c.418
§1; 1965 c.470 §1; 1969 c.591 §213; 1975 c.685 §3; 1977 c.666 §2; 1997
c.99 §7; 2003 c.806 §6](1) For purposes of computing the tax imposed under ORS
118.010, the taxable estate to be used for computing the maximum amount
of the state death tax credit allowable under section 2011 of the
Internal Revenue Code shall be the taxable estate determined for federal
estate tax purposes, reduced by the value on the date of death of the
decedent of all Oregon special marital property in the estate.
(2) Oregon special marital property consists of any trust or other
property interest, or a portion of a trust or property interest:
(a) In which principal or income may be accumulated or distributed
to or for the benefit of only the surviving spouse of the decedent during
the lifetime of the surviving spouse;
(b) In which a person may not transfer or exercise a power to
appoint any part of the trust or other property interest to a person
other than the surviving spouse during the lifetime of the surviving
spouse; and
(c) For which the executor of the estate of the decedent has made
the election described in ORS 118.016 (1).
(3) If a trust or other property interest would qualify as Oregon
special marital property under subsection (2) of this section except that
the trust or other property interest allows principal or income to be
distributed to other persons in addition to the surviving spouse, the
executor may elect to set aside a share of the trust or other property
interest as a separate share of the trust or property interest or as a
separate trust, which shall qualify as Oregon special marital property if:
(a) The executor makes the election described in ORS 118.016 (1);
(b) Each beneficiary who is living at the time the election is made
and who may be entitled to a distribution from the share during the
lifetime of the surviving spouse makes the election described in ORS
118.016 (2);
(c) The surviving spouse makes the election described in ORS
118.016 (2); and
(d) All elections are attached to the inheritance tax return filed
with respect to the estate of the decedent, or are filed or maintained as
records as otherwise prescribed by the Department of Revenue by rule.
[2005 c.124 §2] (1)
The executor of an estate containing property that the executor seeks to
qualify as Oregon special marital property under ORS 118.013 shall make
an election under this subsection in order for the property to be Oregon
special marital property. The election shall be made:
(a) By attaching a statement to the inheritance tax return for the
estate of the decedent that identifies the trust or other property
interest that constitutes Oregon special marital property and that
affirms that the identified property meets the requirements of Oregon
special marital property under ORS 118.013 and will be administered as
required under ORS 118.013; or
(b) In such other manner as the Department of Revenue prescribes by
rule.
(2) For a trust or other property interest described in ORS 118.013
(3), in order for any portion of the trust or other property interest to
be Oregon special marital property, in addition to the election of the
executor described in subsection (1) of this section, the surviving
spouse and each beneficiary who is living at the time of the election and
who may be eligible for a distribution from the trust or other property
interest during the lifetime of the surviving spouse shall make an
election and written consent that is in substantially the following form:
___________________________________________________________________________
___
CONSENT TO ESTABLISHMENT OF
OREGON SPECIAL MARITAL PROPERTY (a) ELECTION TO BE SIGNED BY ALL BENEFICIARIES EXCEPT THE SURVIVING
SPOUSE: Each of the undersigned acknowledge and consent to a portion of
the ____________ (name of trust or other property interest) being set
aside as a separate share or trust in order to qualify for the Oregon
special marital property election in accordance with ORS 118.013, for the
primary purpose of reducing or eliminating the Oregon inheritance tax due
on the estate of ____________ (name of decedent). The undersigned
together with the surviving spouse constitute all of the persons living
on the date of this election who may be entitled to a distribution during
the lifetime of the surviving spouse from the ___________ (name of trust
or other property interest). Each of the undersigned, both on behalf of
the undersigned and on behalf of the unborn lineal descendants of the
undersigned, irrevocably agrees to release all rights to distributions
from the Oregon special marital property during the lifetime of the
surviving spouse. Each of the undersigned agrees that all other
provisions of the _________ (name of trust or other property interest)
shall remain in effect and that, upon the death of the surviving spouse,
any remaining Oregon special marital property shall be distributed as
otherwise provided in the trust or other property interest.Signature of: _________(beneficiary)Signature of: _________(beneficiary) (b) ELECTION TO BE SIGNED BY THE SURVIVING SPOUSE: I am the
surviving spouse of ____________ (name of decedent). I acknowledge and
consent to a portion of the ____________ (name of trust or other property
interest) being set aside as a separate share or trust in order to
qualify as Oregon special marital property under ORS 118.013, for the
primary purpose of reducing or eliminating the Oregon inheritance tax due
on the estate of ____________ (name of decedent). I, together with all of
the other individuals executing the election in accordance with ORS
118.013, constitute all of the persons living on the date of this
election who may be entitled to a distribution from the Oregon special
marital property to which this election applies and who might be entitled
to a distribution during my lifetime. I agree that all other terms,
conditions and provisions that apply to the ____________ (name of trust
or other property interest) shall apply to the Oregon special marital
property to which this election applies, and that upon my death, any
remaining Oregon special marital property shall be distributed as
otherwise provided in the trust or other property interest.Signature of: ____________(surviving spouse)SUBSCRIBED AND SWORN TO before me this _____ day of_____, 2_____._______________Notary Public of OregonMy commission expires: _________
___________________________________________________________________________
___
(3) Elections made under this section are irrevocable.
(4) The custodial parent or court appointed guardian of a minor
beneficiary may sign the election on behalf of the minor beneficiary and
the unborn lineal descendents of the minor beneficiary. [2005 c.124 §3]Note: Section 5, chapter 124, Oregon Laws 2005, provides:
Sec. 5. (1) An Oregon inheritance tax return that is filed with
respect to a death occurring on or after January 1, 2002, and before the
effective date of this 2005 Act [November 4, 2005], may be amended to
make the elections described in sections 2 [118.013] and 3 [118.016] of
this 2005 Act on or before the later of:
(a) December 31, 2006; or
(b) The deadline otherwise prescribed by law for the filing of an
amended inheritance tax return.
(2) An inheritance tax return that is originally filed on or after
the effective date of this 2005 Act may be amended to make the elections
described in sections 2 and 3 of this 2005 Act as otherwise prescribed by
law.
(3)(a) If a refund is made as the result of the filing of an
amended return that is allowable because of the date for filing amended
returns under subsection (1)(a) of this section, the refund may not bear
interest, unless the refund is made on or after March 1, 2007.
(b) A refund described in paragraph (a) of this subsection that is
made on or after March 1, 2007, and attributable to the elections
described in sections 2 and 3 of this 2005 Act shall bear interest as
prescribed in ORS 305.220, for the period beginning March 1, 2007, and
ending on the date the refund is made.
(4) Once made, an election described in sections 2 and 3 of this
2005 Act is irrevocable. [2005 c.124 §5]For purposes of computing the tax imposed under ORS
118.010, the gross estate of a decedent who was a surviving spouse with
respect to property that is Oregon special marital property under ORS
118.013 shall include the Oregon special marital property, valued as of
the date of death of the surviving spouse. [2005 c.124 §4](1) The tax
provided for in ORS 118.010 shall be paid to the Department of Revenue on
the date the federal estate tax is payable. If interest is paid on
federal estate tax installments resulting in a reduction of the federal
estate tax, and the department determines, pursuant to an amended return
or refund claim, that the amount of tax imposed by ORS 118.010 is less
than the amount theretofore paid, the excess tax shall be refunded by the
department with interest at the rate established by ORS 305.220 for each
month or fraction thereof during a period beginning on the date the
amended return or refund claim is filed to the time the refund is made.
(2) If the amount of federal estate tax reported on a United States
estate tax return is changed or corrected by the Internal Revenue Service
or other competent authority, resulting in a change in the maximum state
death tax credit allowable under the federal estate tax law, the executor
shall report the change or correction in federal estate tax to the
department. If the federal change or correction results in a reduction of
the allowable state death tax credit, the report of the change or
correction shall be treated by the department as a claim for refund
pursuant to ORS 305.270 and, notwithstanding the limitations of ORS
305.270, shall be deemed timely if filed with the department within two
years after the federal correction was made. If the change or correction
results in an increase in the state death tax credit allowable on the
federal estate tax return, the department may issue a notice of
deficiency within two years after the federal change or correction was
made or within two years after receiving a report of the federal change
or correction, whichever is the later. Any executor filing an amended
federal estate tax return shall also file an amended return with the
department within 90 days thereafter.
(3)(a) In the case of an estate that contains property that is
valued under section 2032A of the Internal Revenue Code for federal
estate tax purposes (relating to the valuation of certain farm or other
property) and that ceases to qualify for valuation under section 2032A,
an additional tax under ORS 118.005 to 118.840 shall be imposed. The
additional tax shall equal the amount of any increase in the state death
tax credit allowable under section 2011 of the Internal Revenue Code that
is attributable to the change in the value of the estate resulting from
the imposition of additional federal estate tax under section 2032A.
(b) The department shall be notified of the disqualification of the
property from valuation under section 2032A in the same time and manner
as the federal Internal Revenue Service is notified of the
disqualification.
(c) The period for assessment of the tax imposed under this
subsection, including any penalty or interest, shall be two years from
the date on which the department receives the notice described in
paragraph (b) of this subsection.
(d) The other provisions of ORS 118.005 to 118.840 and ORS chapter
305 shall apply to the additional tax imposed under this subsection in
the same manner in which those provisions apply to the tax imposed under
ORS 118.010.
(4) For purposes of this section, a change or correction of a
United States estate tax return is deemed to be made on the date of the
federal audit report.
(5) The executor shall, upon request of the department, supply a
copy of the United States estate tax return which the executor has filed
or may file with the federal government, or a copy of any federal agent’s
report upon any audit or adjustment of the United States estate tax
return. [Amended by 1959 c.418 §5; 1971 c.732 §1; 1973 c.703 §3; 1975
c.685 §6; 1977 c.666 §9; 1979 c.582 §1; 1987 c.646 §4; 1989 c.626 §1;
1997 c.99 §8]
(1) In the case of an estate that contains a qualified family-owned
business interest, an additional tax shall be imposed under ORS 118.005
to 118.840 if:
(a) The value of the interest was originally taken as a deduction
under section 2057(a) of the Internal Revenue Code in computing the value
of the taxable estate for federal estate tax purposes; and
(b) An additional federal estate tax is imposed with respect to the
qualified family-owned business interest for the reasons stated in
section 2057(f) of the Internal Revenue Code.
(2)(a) The additional tax imposed under this section shall equal
the amount of any allowable increase in the state death tax credit under
section 2011 of the Internal Revenue Code if the applicable percentage of
the family-owned business interest that is being disqualified under
section 2057(f) of the Internal Revenue Code were added to the taxable
estate for federal estate tax purposes.
(b) The applicable percentage to be used in calculating the
additional tax under this subsection shall equal the applicable
percentage used in calculating the additional federal estate tax under
section 2057(f)(2)(B) of the Internal Revenue Code.
(3) The Department of Revenue must be notified of the qualified
family-owned business interest being made subject to additional federal
estate tax under section 2057(f) of the Internal Revenue Code at the same
time and in the same manner as the Internal Revenue Service is notified
of the additional federal tax.
(4) The period for assessment of the additional tax imposed under
this section, including any penalty or interest, shall be two years from
the date on which the department receives the notice described in
subsection (3) of this section.
(5) The other provisions of ORS 118.005 to 118.840 and ORS chapter
305 shall apply to the additional tax imposed under this section in the
same manner in which those provisions apply to the tax imposed under ORS
118.010. [1999 c.90 §27](1) Except as provided in subsection (2) of this section:
(a) An inheritance tax return is not required with respect to the
estates of decedents dying on or after January 1, 1987, and before
January 1, 2003, unless a federal estate tax return is required to be
filed; and
(b) An inheritance tax return is not required with respect to the
estates of decedents dying on or after:
(A) January 1, 2003, and before January 1, 2004, unless the value
of the gross estate is $700,000 or more;
(B) January 1, 2004, and before January 1, 2005, unless the value
of the gross estate is $850,000 or more;
(C) January 1, 2005, and before January 1, 2006, unless the value
of the gross estate is $950,000 or more; or
(D) January 1, 2006, unless the value of the gross estate is $1
million or more.
(2) In every estate, whether or not subject to administration and
whether or not a federal estate tax return is required to be filed, the
executor shall at such times and in such manner as required by rules of
the Department of Revenue, file with the department a return in a form
provided by the department setting forth a list and description of all
transfers of property, in trust or otherwise, made by the decedent in the
lifetime of the decedent as a division or distribution of the estate of
the decedent made within the three-year period ending on the date of
death or intended to take effect at or after death and any further data
that the department requires to determine inheritance tax under this
chapter. [Formerly 118.660; 1971 c.567 §5; 1977 c.666 §12; 1985 c.565
§10a; 1987 c.646 §5; 2003 c.806 §7]Note: Sections 9 and 10, chapter 806, Oregon Laws 2003, provide:
Sec. 9. (1) In the case of a decedent who dies on or after January
1, 2002, and before January 1, 2004, the Department of Revenue may extend
the time for the filing of a return and for the payment of any tax due
under ORS 118.005 to 118.840 for a reasonable period not to exceed four
years from the date otherwise fixed for the filing of a return and the
payment of the tax due.
(2) The department may prescribe rules and forms for granting an
extension under this section. [2003 c.806 §9]
Sec. 10. Notwithstanding any other provision of ORS 118.005 to
118.840, in the case of decedents dying on or after January 1, 2002, and
before January 1, 2003:
(1) A return under ORS 118.005 to 118.840 is not required and no
tax is due under ORS 118.005 to 118.840 if the taxable estate of the
decedent is less than $1 million; and
(2) If a return is required under subsection (1) of this section,
the tax due under ORS 118.005 to 118.840 shall be determined under the
Internal Revenue Code as amended and in effect on December 31, 2000,
using a unified credit that does not exceed $192,800. [2003 c.806 §10] The provisions of ORS
chapter 305 as to the audit and examination of reports and returns,
determination of deficiencies, assessments, claims for refund,
conferences and appeals to the Oregon Tax Court, and the procedures
relating thereto, shall apply to the determination of inheritance taxes
under this chapter, except where the context requires otherwise. [1977
c.870 §17 (enacted in lieu of 118.170, 118.180 and 118.360); 1995 c.650
§50]LIEN; PAYMENT;
COMPROMISE OF TAX All heirs, legatees, devisees,
administrators, executors and trustees, and any grantee or donee under a
conveyance or gift made during the grantor’s or donor’s life if the
conveyance or gift is subject to tax under ORS 118.010, are,
respectively, liable for any and all taxes mentioned in ORS 118.010, with
interest thereon, until the same have been paid as in ORS 118.005 to
118.840 provided. All taxes imposed by ORS
118.005 to 118.840 take effect at and accrue upon the death of the
decedent, and are due and payable on the date the decedent’s federal
estate tax is due and payable, except as otherwise provided in ORS
118.005 to 118.840. [Amended by 1973 c.254 §1; 1975 c.762 §7; 1977 c.666
§13; 1997 c.99 §9] (1) Upon application of the
executor and the securing of all taxes that are payable by bond, deposit
or other good collateral acceptable to the Department of Revenue, the
department may extend the time for payment of any part of the amount
imposed by ORS 118.005 to 118.840.
(2) The extension under this section shall be for a period not in
excess of 14 years from the date prescribed by ORS 118.220 for payment of
the tax.
(3) Under rules prescribed by the department, the department may
extend the time for the payment of any deficiency of a tax imposed by ORS
118.005 to 118.840 for a reasonable period not to exceed four years from
the date otherwise fixed for the payment of the deficiency. [1977 c.666
§13d; 1997 c.99 §10](1) Every tax imposed by ORS 118.005 to 118.840 is a
lien upon the property embraced in any inheritance, devise, bequest,
legacy or gift until paid, and the person to whom such property is
transferred, and the personal representatives and trustees of every
estate embracing such property are personally liable for such tax until
its payment, to the extent of the value of such property.
(2) Taxes imposed under ORS 118.005 to 118.840 may be assessed and
collected by the Department of Revenue in the same manner as income taxes
are assessed and collected under ORS chapter 314. The department may
issue a warrant as provided in ORS 314.430 and record the warrant in the
County Clerk Lien Record maintained under ORS 205.130. A warrant issued
under this section has the same force and effect as a warrant issued
under ORS 314.430. [Amended by 1969 c.591 §214; 1975 c.762 §8; 1977 c.870
§26; 1985 c.85 §4; 1987 c.758 §5; 2003 c.806 §8]Any personal representative or
trustee having in charge, or in trust, any property for distribution,
embraced in or belonging to any inheritance, devise, bequest, legacy or
gift, subject to inheritance tax shall deduct the tax therefrom, and pay
the same to the Department of Revenue, as provided in ORS 118.005 to
118.840. If such property is not in money, the personal representative or
trustee shall collect the tax on such inheritance, devise, bequest,
legacy or gift upon the appraised value thereof from the person entitled
thereto. The personal representative or trustee shall not deliver, or be
compelled to deliver, any property embraced in any inheritance, devise,
bequest, legacy or gift, subject to tax under ORS 118.005 to 118.840, to
any person until it has collected the tax thereon. [Amended by 1973 c.254
§2; 1997 c.99 §11] (1) The taxes
imposed by ORS 118.005 to 118.840 are payable to the Department of
Revenue.
(2) The department shall give the personal representative, trustee
or other person paying such tax, a receipt.
(3) The department shall issue to any interested person demanding
the same a copy of a receipt that may have been given by such department
for the payment of tax under ORS 118.005 to 118.840. [Amended by 1965
c.727 §4; 1971 c.652 §3; 1973 c.254 §3; 1975 c.593 §1; 1975 c.762 §9;
1977 c.666 §13a; 1985 c.565 §10b; 1987 c.646 §6](1) If no return has been
filed as required by this chapter, there shall be added to the amount of
tax required to be shown on the return a delinquency penalty of five
percent of the amount of such tax.
(2) If the failure to file a return continues for a period in
excess of three months after the due date, there shall be added to the
amount of tax required to be shown as tax on the return a failure to file
penalty of 20 percent of the amount of such tax. This penalty is in
addition to the delinquency penalty imposed by subsection (1) of this
section.
(3) If any part of any deficiency is due to fraud with intent to
evade tax, then 100 percent of the total amount of the deficiency shall
be assessed and collected.
(4) Except for a deferral of payment pursuant to an extension
granted under ORS 118.225 or a timely election made under ORS 118.300, if
the taxes imposed by ORS 118.005 to 118.840 are not paid on or before the
date on which payment of the tax is required to be made under ORS
118.220, there shall be added to the amount of tax required to be shown
on the return a delinquency penalty of five percent of the amount of such
tax.
(5)(a) Except as provided in subsection (6) of this section and
paragraph (b) of this subsection, if the tax imposed by ORS 118.005 to
118.840 is not paid on or before the date on which payment of the tax is
required to be made under ORS 118.220, interest shall be charged and
collected thereon at the rate established under ORS 305.220 for each
month or fraction thereof from the time when the tax became due and
payable.
(b) If payment of the tax or deficiency is extended under ORS
118.225, interest shall be charged and collected on any amount for which
extension is granted from the date the tax or deficiency is otherwise due
and payable to the date of payment at the rate established under ORS
305.220 for each month or fraction thereof.
(6) In all cases in which a bond is given, under the provisions of
ORS 118.300, interest shall be charged at the rate established under ORS
305.220 for each month or fraction thereof from the time when the tax
became due and payable, until the date of payment.
(7) If the tax has not been determined, a deposit may be made to
avoid interest. Should the amount of such payment exceed the sum
subsequently determined to be due, the Department of Revenue shall refund
the excess.
(8) Payments made on the tax shall be applied first to penalty and
interest and then to the principal.
(9) For purposes of this section, the amount of tax required to be
shown on the return shall be reduced by the amount of any part of the tax
which is paid on or before the date prescribed for payment of the tax and
by the amount of any credit against the tax which may be lawfully claimed
upon the return. [Amended by 1971 c.732 §2; 1973 c.332 §1; 1975 c.593 §2;
1977 c.666 §13b; 1982 s.s.1 c.16 §3; 1993 c.726 §1; 1997 c.99 §12] Except as to real
property located outside of the state passing in fee from the decedent
owner, the tax imposed under ORS 118.010 shall be assessed against and be
collected from property of every kind, which, at the death of the
decedent owner is subject to, or thereafter, for the purpose of
distribution, is brought into this state and becomes subject to the
jurisdiction of the courts of this state for distributive purposes, or
which was owned by any decedent domiciled within the state at the time of
the death of the decedent even though the property was situated outside
of the state. [Amended by 1997 c.99 §13](1) Every executor,
administrator or trustee has power to sell as much of the property
embraced in any inheritance, devise, bequest or legacy, as will enable
the executor, administrator or trustee to pay the tax imposed by ORS
118.005 to 118.840, in the same manner as the executor, administrator or
trustee is authorized to do for the payment of the debts of a decedent.
(2) Any part of the gross estate sold for the payment of claims
against the estate and expenses of administration, for the payment of the
tax imposed by ORS 118.005 to 118.840, or for purposes of distribution,
shall be divested of the lien of such tax, and such lien shall be
transferred to the proceeds of such sale. A mortgage on property executed
for payment of claims against the estate and expenses of administration
and for payment of the tax imposed by ORS 118.005 to 118.840 shall
constitute a lien upon said property prior and superior to the
inheritance tax lien, which inheritance tax lien shall attach to the
proceeds of such mortgage. [Amended by 1957 c.362 §1; 1969 c.591 §215](1) If any bequest or legacy is charged upon
or payable out of any property, the heir or devisee shall deduct such tax
therefrom and pay such tax to the administrator, executor or trustee, and
the tax shall remain a lien or charge on such property until paid. The
payment thereof shall be enforced by the executor, administrator or
trustee in the same manner that payment of the bequest or legacy is
enforced, or by the Department of Revenue in the same manner as income
taxes are collected under ORS chapter 314.
(2) If any bequest or legacy is given in money for a limited
period, the administrator, executor or trustee shall retain the tax upon
the whole amount; but, if it is not in money, the administrator, executor
or trustee shall make application to the court having jurisdiction of an
accounting by the administrator, executor or trustee to make an
apportionment, if the case requires, of the sum to be paid by such
legatee or beneficiary, and for such further order relative thereto as
the case may require. [Amended by 1961 c.455 §5; 1985 c.85 §5] Any
person or corporation beneficially interested in any property chargeable
with a tax under this chapter and personal representatives and trustees,
may elect, on or before the date on which the inheritance tax is due and
payable under ORS 118.220, not to pay the tax until the person or persons
beneficially interested therein shall come into actual possession or
enjoyment thereof. If it is personal property, the person or persons so
electing shall give a bond or irrevocable letter of credit to the state
in double the amount of the tax, with such sureties or issued by such
insured institution as defined in ORS 706.008 as the Director of the
Department of Revenue may approve, conditioned for the payment of the tax
and interest thereon, at such time and period as the person or persons
beneficially interested therein may come into actual possession or
enjoyment of the property, which bond shall be executed and filed, and a
full return of the property made to the Director of the Department of
Revenue within six months from the date of transfer thereof, as in this
section provided. The bond or letter of credit must be renewed every five
years. [Amended by 1969 c.591 §216; 1975 c.762 §10; 1977 c.666 §14; 1991
c.331 §34; 1997 c.99 §14; 1997 c.631 §406]If a foreign executor,
administrator or trustee assigns or transfers any stock or obligations in
this state standing in the name of the decedent, or in trust for a
decedent, liable to any such tax, the tax shall be paid to the Department
of Revenue on or before the transfer thereof, and no such assignment or
transfer is valid unless such tax is paid.(1) Whenever an estate, devise, legacy or beneficial interest therein,
charged or sought to be charged with the inheritance tax is of such
nature or is so disposed that the liability of the same is doubtful, or
the value thereof cannot with reasonable certainty be ascertained under
the provisions of law, the Department of Revenue may compromise with the
beneficiaries or representatives of such estate, and compound the tax
thereon. The payment of the amount of the taxes so agreed upon shall
discharge the lien against the property of the estate.
(2) In any suit or action involving the title to real property, in
which it appears, by the pleadings or otherwise, that an inheritance tax
is or might be payable to the State of Oregon by reason of the death of
any person whose estate has not been administered in Oregon, the circuit
court shall direct that a copy of the pleadings in such cause be served
upon the Department of Revenue, such service to be made as summons is
served in any cause in the circuit court of this state. Thereupon further
proceedings in the cause shall be suspended until the department has had
an opportunity to appear therein, such appearance to be made within the
time that is required by the service of summons upon a private person or
corporation. The department shall appear in the cause and present the
claims of the state, if any, to an inheritance tax, and it is the duty of
the Attorney General of the state to represent the state and the
department in such proceedings, and the department may compromise and
compound the tax claimed to be due upon the passing of such real
property. Such settlement and compromise shall be entered of record in
the register of such court. Thereafter the payment of the amount of taxes
so agreed upon shall discharge the inheritance tax lien against the
property. If a compromise is not effected, the amount of tax, if any, due
upon the passing of the real property shall be determined by the court as
are other questions involved in such litigation, and subject to the same
right of appeal to the Court of Appeals. The judgment of the court or of
the Court of Appeals, if there is an appeal, is conclusive as to the
amount of taxes due upon the passing of the real property and payment
thereof shall discharge the lien against the property. [Amended by 1969
c.591 §217; 1971 c.567 §8; 1979 c.562 §6; 1985 c.540 §29; 1987 c.758 §8;
2003 c.576 §381]ADMINISTRATION OF
INHERITANCE TAX ACT The Oregon Tax Court has sole
jurisdiction to hear and determine all questions arising under the
provisions of ORS 118.005 to 118.840, and to any act in relation thereto
authorized by law to be done by such court in other matters or
proceedings coming within its jurisdiction. [Amended by 1971 c.567 §10]Personal representatives or trustees of the estates subject to
inheritance tax shall when requested by the Department of Revenue furnish
certified copies of reports, and upon failure to comply with such
requests, the department may obtain copies and transcripts from the clerk
of the court with the costs therefor to be charged against the estate.
[Amended by 1955 c.727 §6; 1973 c.254 §8] The net revenue from the taxes
imposed by ORS 118.005 to 118.840 (including temporary payments under ORS
118.260 and fees, taxes, interest and penalties), after deduction of
refunds, shall be credited to the General Fund to be available to meet
any expense or obligation of this state lawfully incurred. [Amended by
1959 c.273 §1; 1969 c.479 §4; 1997 c.99 §15] (1) It shall be unlawful
for the Department of Revenue or any of its officers or employees to
divulge or make known in any manner any particulars disclosed in any
return or supporting data required under this chapter. Except for
executors or beneficiaries and their authorized representatives, it shall
be unlawful for any person or entity who has acquired information
pursuant to subsections (3) and (4) of this section to divulge or make
known such information for any purpose other than that specified in the
provisions of law authorizing the use or disclosure. No subpoena or
judicial order shall be issued compelling the department, or its officers
or employees, or persons described in subsections (3) and (4) of this
section, to divulge or make known any particulars disclosed in any such
return or supporting data except where the liability for inheritance
taxes is to be adjudicated by the Oregon Tax Court. Nothing in this
section shall prohibit the publication of statistics so classified as to
prevent the identification of particulars in any return or supporting
data covered by this section.
(2) As used in this section:
(a) “Officer,” “employee” or “person” includes an authorized
representative of the officer, employee or person, or former officer,
employee or person, or an authorized representative of such former
officer, employee or person.
(b) “Particulars” includes, but is not limited to, a taxpayer’s
name, address, telephone number, Social Security number and the amount of
refund claimed by or granted to a taxpayer.
(3) Notwithstanding subsection (1) of this section, the department
may permit, for tax purposes only, the Commissioner of Internal Revenue
or authorized representatives, or an officer or employee of any state or
the District of Columbia which has a provision of law which meets the
requirements of any applicable provision of the Internal Revenue Code as
to confidentiality to inspect any return or supporting data referred to
in subsection (1) of this section. The department may disclose to the
executor or beneficiary of any estate, or an authorized representative
thereof, any information or particulars otherwise made confidential by
this section, if the department determines that the executor or
beneficiary has a material interest which will be affected by such
information or particulars.
(4) The department may disclose a taxpayer’s name, address,
telephone number, Social Security number, refund amount or tax due to the
extent necessary in connection with collection activities or the
processing or mailing of returns, correspondence or forms with respect to
the tax imposed under this chapter.
(5) The department also may disclose and give access to information
described in subsection (1) of this section to those persons, agencies or
entities, described in ORS 314.840 (2)(e), (f), (g) and (h) to the extent
authorized by said paragraphs; and to any agency of the State of Oregon
or any person, or any officer or employee of such agency or person to
whom disclosure or access is given by state law and not otherwise
referred to in this section, including but not limited to the Secretary
of State and the officers and employees thereof, for the uses and
purposes described in ORS 297.060.
(6) Each officer or employee of the department and each person
described or referred to in subsection (5) of this section to whom
disclosure or access to tax information is given, prior to beginning
employment or the performance of duties involving such disclosure or
access, shall be advised in writing of the provisions of subsection (1)
of this section and ORS 118.990 (3), and shall as a condition of
employment or performance of duties execute a certificate for the
department, stating in substance that the person has read these
provisions of law, that the person has had them explained and that the
person is aware of the penalties for the violation of subsection (1) of
this section. [1979 c.690 §4; 1983 c.633 §1; 1985 c.565 §10d; 1987 c.158
§18; 1987 c.646 §6a; 1993 c.726 §51] (1) If the Department of
Revenue determines that the executor has not made an appraisal that is
needed in order to comply with the provisions of ORS 118.005 to 118.840,
the department may cause an appraisal to be made by a fee appraiser to so
ensure compliance.
(2) The cost of the appraisal including the appraiser’s fee as a
witness in the event of an appeal shall be paid out of the taxes
collected under this chapter before the net revenue is credited to the
General Fund as provided in ORS 118.510. [1979 c.516 §3; 1997 c.99 §16]Note: 118.535 was added to and made a part of ORS chapter 118 by
legislative action but was not added to any smaller series therein. See
Preface to Oregon Revised Statutes for further explanation.ENFORCEMENT OF
FOREIGN DEATH TAXES (1) The
provisions of ORS 118.810 to 118.840 apply to the estate of any
nonresident decedent if the laws of the state of domicile of the
nonresident decedent contain a provision, of any nature or however
expressed, whereby this state is given reasonable assurance of the
collection of its inheritance or death taxes, interest and penalties,
from the estates of decedents dying domiciled in this state in cases
where the estates of such decedents are being administered by the probate
court of such other state, or if the state of domicile of the nonresident
decedent does not grant letters in nonresident estates until after
letters have been issued by the state of domicile.
(2) The provisions of ORS 118.810 to 118.840 shall be construed
liberally in order to insure that the state of domicile of any decedent
shall receive any death taxes, together with interest and penalties
thereon, due to it.
(3) For the purpose of ORS 118.810 to 118.840, the words, “state of
domicile” or “domiciliary state” include any territory of the United
States, the District of Columbia and any foreign country.At any time before the expiration of 18 months
after the qualification in any probate court of this state of any
executor of the will of, or administrator of the estate of, any
nonresident decedent, such executor or administrator shall file with the
clerk of the court in which the executor or administrator qualified proof
that all death taxes, together with interest or penalties thereon, which
are due to the state of domicile of such decedent, or to any political
subdivision thereof, have been paid or secured, or that no such taxes,
interest or penalties are due, as the case may be, unless it appears that
letters of administration or letters testamentary have been issued in the
state of domicile.The proof required by ORS 118.820 may
be in the form of a certificate issued by the official or body charged
with the administration of the death tax laws of the domiciliary state
but if such proof is not filed within the time limit set out in ORS
118.820, the clerk of the court forthwith shall notify by mail the
official or body of the domiciliary state charged with the administration
of the death tax laws thereof with respect to such estate, and shall
state in such notice as far as is known to the clerk, the name, date of
death and last domicile of such decedent; the name and address of each
executor or administrator; a summary of the values of the real estate,
tangible personalty and intangible personalty, wherever situated,
belonging to such decedent at the time of death; and the fact that such
executor or administrator has not filed theretofore the proof required in
ORS 118.820. The clerk shall attach to such notice a plain copy of the
will and codicils of such decedent, if the decedent died testate, or if
the decedent died intestate, a list of heirs and next of kin of the
decedent, so far as is known to such clerk. Within 60 days after the
mailing of such notice, the official or body charged with the
administration of the death tax laws of the domiciliary state may file
with the court in this state a petition for an accounting in such estate.
Such official or body of the domiciliary state shall be deemed a party
interested for the purpose of petitioning the court for such accounting.
If such petition is filed within the period of 60 days, the court shall
order the accounting, and upon the accounting being filed and approved
shall enter a judgment requiring the remission to the fiduciary appointed
by the domiciliary probate court of the balance of the intangible
personalty after the payment of creditors and expenses of administration
in this state. [Amended by 2003 c.576 §382]
Unless the provisions of either ORS 118.820 or 118.830 have been complied
with, no such executor or administrator shall be entitled to a final
accounting or discharge in any court in this state.DISPUTES RESPECTING
DOMICILE OF DECEDENT For the purposes of
ORS 118.855 to 118.880:
(1) “Board” means board of arbitration.
(2) “Death tax” means any tax levied by a state on account of the
transfer or shifting of economic benefits in property at death, or in
contemplation thereof, or intended to take effect in possession or
enjoyment at or after death, whether denominated an “inheritance tax,”
“transfer tax,” “succession tax,” “estate tax,” “death duty,” “death
dues,” or otherwise.
(3) “Executor” means an executor of the will or administrator of
the estate of the decedent, but does not include an ancillary
administrator nor an administrator with the will annexed if an executor
named in the will has been appointed and has qualified in another state.
(4) “Interested person” means any person who may be entitled to
receive or who has received any property or interest which may be
required to be considered in computing the death taxes of any state
involved in the dispute.
(5) “State” means the District of Columbia and any state, territory
or possession of the United States.
(6) “Taxing official” means the Director of the Department of
Revenue and the designated authority of a reciprocal state charged with
the duty of collecting its death taxes.
(7) “This state” means the State of Oregon. [1959 c.573 §1]When the taxing official of this state and the taxing official of
one or more other states each claims that the state of the official
respectively was the domicile of the decedent for the purpose of death
taxes, at any time prior to the commencement within this state of suit or
action for determination of the decedent’s domicile for death tax
purposes, or within 60 days thereafter, the executor or the taxing
official of any such state may elect to invoke the provisions of ORS
118.855 to 118.880. Such executor or taxing official shall send a notice
of such election by registered or certified mail, receipt requested, to
the taxing official of each such state and to each executor, ancillary
administrator, and interested person. Within 40 days after the receipt of
such notice of election the executor may reject such election by sending
a notice of rejection by registered or certified mail, receipt requested,
to all persons to whom the notice of election is required to be sent.
When an election has been rejected by the executor no further proceedings
shall be had under ORS 118.855 to 118.880. If such election is not
rejected within the 40-day period, the dispute in respect of the domicile
of the decedent for death tax purposes shall be settled solely as
provided in ORS 118.865 to 118.880 and no other or additional proceedings
to determine or redetermine the domicile of the decedent for death tax
purposes shall thereafter be instituted in any court of this state or
otherwise. [1959 c.573 §2; 1991 c.249 §16](1) In any case in which an election is made and not
rejected, as provided in ORS 118.860, the Department of Revenue may enter
into a written agreement with the other taxing officials involved and
with the executor to accept a sum certain in full payment of any death
taxes, together with interest and penalties, which may be due this state,
provided the agreement fixes the amount of death taxes with interest and
penalties to be paid to the other states involved in the dispute.
(2) Notwithstanding the commencement of a legal action for
determination of domicile within this state or the commencement of an
arbitration proceeding as provided in ORS 118.870, the department, at any
time prior to the conclusion of such action or proceeding, may in any
case enter into a written agreement with the other taxing officials
involved and with the executor to accept a sum certain in full payment of
any death tax, together with interest and penalties, which may be due
this state, provided the agreement fixes the amount of death taxes with
interest and penalties to be paid the other states involved in the
dispute. Upon the filing of the agreement with the authority which would
have jurisdiction to assess the death taxes of this state if the decedent
died domiciled in this state, an assessment shall be made as provided in
such agreement, and such assessment shall finally and conclusively fix
the amount of death taxes due this state. If the aggregate amount payable
under such agreement or under an agreement made in accordance with the
provisions of subsection (1) of this section to the states involved in
the dispute is less than the minimum credit allowable to the estate
against the United States estate tax imposed with respect thereto, the
executor forthwith shall also pay to the department the same percentage
of the difference between such aggregate amount of such credit as the
amount payable to the department under such agreement bears to such
aggregate amount. [1959 c.573 §§3,5; 1987 c.758 §9] When it appears by the written
admission of the executor and the tax official of each state involved in
the dispute that an agreement contemplated in ORS 118.865 (1) cannot be
reached or, in all events, if one year has elapsed from the date of the
election without such an agreement having been reached, the domicile of
the decedent at the time of death shall be determined solely for death
tax purposes as follows:
(1) When this state and one other state only are involved in the
dispute, the Director of the Department of Revenue and the taxing
official of the other state shall each appoint a member of a board of
arbitration and those members shall appoint the third member of the
board. If this state and more than one other state are involved, the
taxing officials thereof shall agree upon the authorities charged with
the duty of administering death tax laws in three states not involved in
the dispute and each of these authorities shall appoint one member of the
board of arbitration. The board shall select one of its members as
chairperson.
(2) The board shall hold hearings at such places as it deems
necessary, upon reasonable notice to the executor, ancillary
administrators, all interested persons and the taxing officials of the
states involved, all of whom are entitled to be heard.
(3) The board may administer oaths, take testimony, subpoena
witnesses and require their attendance; require the production of books,
papers and documents and issue commissions to take testimony. Subpoenas
may be issued by any member of the board. Failure to obey a subpoena of
the board may be punished by any court of record in the same manner as if
the subpoena had been issued by such court.
(4) Whenever practicable the board shall apply the rules of
evidence then prevailing in the federal courts under the federal rules of
civil procedure.
(5) The board, by the decision of its majority, shall determine the
domicile of the decedent at the time of death. The decision of the board
is final and conclusive and binds this state and all of its judicial and
administrative officials on all questions concerning the domicile of the
decedent for death tax purposes. If the board does not render a decision
within one year from the time that it is fully constituted, all authority
of the board shall cease and the bar to court proceedings set forth in
ORS 118.860 shall no longer exist.
(6) The decision of the board and the record of its proceeding
shall be filed with the authority having jurisdiction to assess death
taxes in the state determined to be the domicile of the decedent and with
the authorities which would have had jurisdiction to assess death taxes
in each of the other states involved if the decedent had been found to be
domiciled therein.
(7) The reasonable compensation and expenses of the members of the
board and its employees shall be agreed upon among such members, the
taxing officials involved, and the executor. If such an agreement cannot
be reached, the compensation and expenses shall be determined by such
taxing officials and, if they cannot agree, by the appropriate probate
court of the state determined to be the domicile of the decedent. Such
amount so determined shall be borne by the decedent’s estate and shall be
deemed an administration expense thereof. [1959 c.573 §4] When the board
of arbitration determines that a decedent died domiciled in this state,
the total amount of interest and penalties for nonpayment of the tax
during the period commencing with the date of the election and ending
with the date of the final determination of the board shall not exceed
one percent per month or fraction of a month of the amount of the death
taxes found to be due. [1959 c.573 §6;1975 c.593 §4](1) ORS 118.855 to 118.880 shall be
applicable only to cases in which each of the states involved in the
dispute has in effect therein a statute substantially similar to ORS
118.855 to 118.880, or has in effect therein a statute empowering one or
more of its officials to voluntarily enter into a binding arbitration or
compromise agreement respecting disputed liability for death taxes and
such an agreement with each of the other states involved in the dispute
and the executor is entered into prior to the appointment of the board of
arbitration as provided in ORS 118.870.
(2) Any procedural conflict between ORS 118.855 to 118.880 and the
statute of a reciprocal state involved in the dispute shall be resolved
by the decision of the majority of the board. If there is a statutory
conflict relating to the number of board members to be selected or the
manner of their selection, the appropriate provision of whichever of the
conflicting statutes is designated by the executor shall govern and
control. [1959 c.573 §7]PENALTIES (1) Failure, neglect or refusal by any person in
possession or control of any record, file or paper containing information
relating to the estate of a deceased person or any interest therein to
exhibit the same upon the written request of the department specifying
and describing such instrument is a misdemeanor.
(2) Any person who willfully makes a false statement in a report
required by ORS 118.160 shall be guilty of false swearing and upon
conviction, shall be punished as provided by law.
(3) Violation of ORS 118.525 is a Class C felony. If the offender
is an officer or employee of the state the offender shall be dismissed
from office and shall be incapable of holding any public office in this
state for a period of five years thereafter. [Amended by 1961 c.455 §8;
subsection (2) enacted as 1969 c.210 §1; 1969 c.591 §223; 1973 c.254 §9;
1975 c.762 §13; 1979 c.690 §5; 1981 c.724 §6]
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