Estate Tax Reduction

Background

House Bill 2629A brings Oregon's estate tax threshold in line with the federal estate tax threshold. The threshold would increase from $1 million to $2 million in tax years 2007 and 2008. This would establish a gross estate tax filling threshold of $3.5 million in 2009 and beyond. In the past, once you broke the threshold you were taxed on the entire amount. In this proposal, taxes would not be assessed on any property up to $3.5 million after 2009.

Issue

An estate tax reduction is especially important to those in the restaurant industry. When appraised for estate taxes, a restaurant is valued based upon the fair market value of the business. Often, the profits of the restaurant are not enough to cover the taxes. As it stands now, many restaurants are valued over the current estate tax threshold. When the taxes are assessed on these restaurants, those that inherit are often left with no choice but to sell the family business.

ORA Position

ORA would also support the elimination of estate tax altogether, however short of that ORA support raising the threshold to a realistic level that will allow these family businesses to continue from one generation to the next.