2007 Oregon Code - Chapter 118 :: Chapter 118 - Inheritance Tax
Chapter 118 —
Inheritance Tax
2007 EDITION
INHERITANCE TAX
PROBATE LAW
GENERAL PROVISIONS
118.005Â Â Â Â Definitions
for ORS 118.005 to 118.840
118.007Â Â Â Â Connection
to federal law; meaning of terms
118.009Â Â Â Â Legislative
findings
118.010Â Â Â Â Imposition
and amount of tax in general; out-of-state property; nonresident decedents;
rules
118.013Â Â Â Â Taxable
estate adjustment for
118.016Â Â Â Â
118.019Â Â Â Â Gross
estate of surviving spouse;
118.100Â Â Â Â Time
for paying tax; refunds; effects of change in federal estate tax return or
special valuation disqualification
118.120Â Â Â Â Qualified
family-owned business interests; additional tax
118.140Â Â Â Â Exclusion
of value of natural resource or commercial fishing property from gross estate;
rules
118.160Â Â Â Â When
tax return is required; lists of property transfers and other data
118.171Â Â Â Â Application
of ORS chapter 305
LIEN; PAYMENT; COMPROMISE OF TAX
118.210Â Â Â Â Liability
for tax
118.220Â Â Â Â When
tax accrues and is payable
118.225Â Â Â Â Extension
of time for payment
118.230Â Â Â Â Lien
of tax; liability for payment; assessment and collection of taxes
118.240Â Â Â Â Delivery
of property prior to collection of tax by personal representative or trustee
prohibited
118.250Â Â Â Â To
whom tax payable; issuing receipts
118.260Â Â Â Â Penalties
for delinquency; failure to file and fraud; interest; deposit where tax not
determined
118.270Â Â Â Â Property
from which tax is collectible
118.280Â Â Â Â Power
to sell for payment of tax; tax lien transferred to proceeds when property of
estate sold or mortgaged
118.290Â Â Â Â Duty
of recipient when legacy payable out of property; legacy for limited period
118.300Â Â Â Â Deferred
payment election; bond or letter of credit
118.310Â Â Â Â Transfer
of stock or obligations by foreign representative or trustee; payment of tax
prior to transfer
118.350Â Â Â Â Compromise
and compounding tax; approval by court; proceedings in case of actions or suits
involving title to real property
ADMINISTRATION OF INHERITANCE TAX ACT
118.410Â Â Â Â Jurisdiction
of tax cases
118.470Â Â Â Â Representative
or trustee to furnish additional reports on demand
118.510Â Â Â Â Disposition
of revenues
118.525Â Â Â Â Disclosure
of return information
118.535Â Â Â Â Appraisal
by department; costs
ENFORCEMENT OF FOREIGN DEATH TAXES
118.810Â Â Â Â Application,
construction and definition
118.820Â Â Â Â Duty
to file proof of death taxes due domiciliary state of nonresident decedent
118.830Â Â Â Â Form
and requisites of proof; petition for accounting by tax officials of
domiciliary state
118.840Â Â Â Â Final
accounting or discharge of executor or administrator
DISPUTES RESPECTING DOMICILE OF DECEDENT
118.855Â Â Â Â Definitions
for ORS 118.855 to 118.880
118.860Â Â Â Â Election
to invoke provisions of ORS 118.855 to 118.880 where dispute exists as to
domicile of decedent for purpose of death taxes
118.865Â Â Â Â Settlement
agreement fixing amount of taxes due each state involved in dispute
118.870Â Â Â Â Arbitration
procedure
118.875Â Â Â Â Limit
on amount of interest and penalties
118.880Â Â Â Â Reciprocal
statutes required in other states; resolving conflicts between statutes
PENALTIES
118.990Â Â Â Â Penalties
GENERAL PROVISIONS
     118.005
Definitions for ORS 118.005 to 118.840. 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
     (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
     (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]
     118.007
Connection to federal law; meaning of terms. 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]
     118.009
Legislative findings. 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
     118.010
Imposition and amount of tax in general; out-of-state property; nonresident
decedents; rules. (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 decedentÂ’s real property located in
     (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 decedentÂ’s real property
located in
     (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 decedentÂ’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 decedentÂ’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]
     118.013
Taxable estate adjustment for
     (2)
     (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]
     118.016
     (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
     (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
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
Signature of: ____________
(surviving spouse)
     SUBSCRIBED AND SWORN TO before me this _____
day of _____, 2_____.
_______________
Notary Public of
My 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]
     118.019
Gross estate of surviving spouse;
     118.020 [Amended by 1961 c.455 §1; 1963 c.135 §1;
1971 c.652 §1; 1973 c.793 §1; 1977 c.666 §3; 1987 c.293 §67; repealed by 1997
c.99 §24]
     118.025 [1987 c.646 §12; 1989 c.625 §80; repealed by
1997 c.99 §24]
     118.030 [Repealed by 1997 c.99 §24]
    Â
     118.035 [1973 c.759 §2; 1975 c.685 §4; 1977 c.666 §4;
1989 c.224 §8; repealed by 1997 c.99 §24]
     118.037 [1975 c.685 §2; repealed by 1977 c.666 §36]
     118.040 [Amended by 1959 c.418 §2; 1977 c.666 §5;
repealed by 1997 c.99 §24]
     118.050 [Amended by 1955 c.727 §2; 1963 c.392 §1;
1967 c.485 §1; 1975 c.687 §1; 1977 c.666 §6; repealed by 1997 c.99 §24]
     118.060 [Repealed by 1997 c.99 §24]
     118.070 [Amended by 1955 c.727 §3; 1959 c.418 §3;
1961 c.455 §2; 1963 c.283 §1; 1965 c.470 §2; 1969 c.493 §74; 1973 c.132 §1;
1973 c.299 §1; 1973 c.703 §1; 1975 c.762 §2; 1977 c.666 §7; 1983 c.632 §1;
repealed by 1997 c.99 §24]
     118.075 [1963 c.435 §6; 1969 c.493 §75; repealed by
1977 c.666 §36]
     118.080 [Amended by 1959 c.418 §4; 1961 c.455 §3;
1973 c.703 §2; 1975 c.762 §3; 1977 c.666 §8; repealed by 1997 c.99 §24]
     118.085 [1971 c.593 §2; repealed by 1997 c.99 §24]
     118.090 [Amended by 1963 c.68 §1; 1977 c.666 §16;
repealed by 1997 c.99 §24]
     118.095 [1969 c.112 §1; repealed by 1977 c.666 §36]
     118.100
Time for paying tax; refunds; effects of change in federal estate tax return or
special valuation disqualification. (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
     (5) The executor shall, upon request of
the department, supply a copy of the
     118.110 [Amended by 1953 c.704 §1; 1961 c.455 §4;
1973 c.268 §1; 1975 c.685 §5; 1977 c.666 §10; 1979 c.582 §2; repealed by 1997
c.99 §24]
     118.120
Qualified family-owned business interests; additional tax. (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]
     118.140
Exclusion of value of natural resource or commercial fishing property from
gross estate; rules. (1) As
used in this section, “natural resource property” means real property, as
defined in ORS 307.010, lawfully qualified, at the decedentÂ’s death, for
designation as:
     (a) Farm use, as defined in ORS 308A.056,
or as one or more farm use homesites, as defined in ORS 308A.250, related to
that real property; or
     (b) Forestland, as defined in ORS 321.201,
or as one or more forestland homesites, as defined in ORS 308A.250, related to
that real property, not to exceed 5,000 acres.
     (2) For purposes of computing the tax
imposed under ORS 118.010, the gross estate of a decedent may not include the
value of:
     (a) Natural resource property, to the
extent the value of natural resource property does not exceed $7.5 million; or
     (b) Property used in commercial fishing
operations and any property used in processing or marketing of the product of
those commercial fishing operations, to the extent the value of the property
described in this paragraph does not exceed $7.5 million.
     (3) Subsection (2) of this section applies
only if the property that is excluded from the value of the gross estate under
subsection (2) of this section is transferred to:
     (a) The spouse of the decedent;
     (b) A natural or adopted child of the
decedent;
     (c) A natural or adopted grandchild of the
decedent;
     (d) A natural or adopted brother or sister
of the decedent; or
     (e) A natural or adopted niece or nephew
of the decedent.
     (4)(a) For each calendar year beginning on
or after January 1, 2009, the Department of Revenue shall recompute the maximum
excluded value of the gross estate provided for in subsection (2) of this
section by the change in the cost of living, if any. The computation shall be
as follows:
     (A) Divide the average U.S. City Average
Consumer Price Index for the 12 consecutive months ending January 1 of the
calendar year prior to the calculation by the average U.S. City Average
Consumer Price Index for the calendar year 2007.
     (B) Multiply $7.5 million by the indexing
factor determined as provided in subparagraph (A) of this paragraph.
     (b) As used in this subsection, “U.S. City
Average Consumer Price Index” means the U.S. City Average Consumer Price Index
for All Urban Consumers (All Items) as published by the Bureau of Labor
Statistics of the United States Department of Labor.
     (c) If any change in the maximum excluded
value of the gross estate determined under paragraph (a) of this subsection is
not a multiple of $500, the change shall be rounded to the nearest $500.
     (5)(a) If property initially excluded from
the value of a gross estate as natural resource property under this section is
not then used as natural resource property for at least five out of the eight
calendar years following the decedentÂ’s death or is disposed of by the
transferee other than by disposition to another family member who is eligible
for the exclusion allowed under this section, an additional tax under ORS
118.005 to 118.840 shall be imposed.
     (b) The additional tax liability shall be
an amount that is no greater than the amount of additional taxes that would
have been due had the property been included in the gross estate, but at least
the amount of such additional taxes multiplied by ((five minus the number of
years the property was used as natural resource property) divided by five). The
additional tax liability shall be apportioned to the estate for any time period
prior to transfer and apportioned to the transferee for any time period
thereafter.
     (c) Prior to the transfer of property
treated as natural resource property under this section, the executor or the
decedent shall notify the transferee of the potential for tax consequences to
the transferee if the transferee fails to meet the conditions of paragraph (a)
of this subsection. The transfereeÂ’s written acknowledgment of this notice
shall be attached to the inheritance tax return.
     (6) The Department of Revenue shall adopt
rules consistent with those adopted under section 2032A of the Internal Revenue
Code, as that section was amended and in effect on December 31, 2006, to
administer this section. [2007 c.843 §68]
     Note: Section 69, chapter 843, Oregon Laws 2007,
provides:
     Sec.
69. Section 68 of this 2007
Act [118.140] applies only to decedents who die on or after January 1, 2007.
[2007 c.843 §69]
     118.150 [Formerly 118.640; 1971 c.652 §2; 1973 c.498
§1; 1975 c.762 §4; 1977 c.666 §11; 1985 c.761 §1; repealed by 1997 c.99 §24]
     118.155 [1973 c.503 §13; 1975 c.762 §5; 1977 c.666 §11a;
1979 c.553 §12; 1981 c.804 §70; 1991 c.459 §341; repealed by 1997 c.99 §24]
     118.160
When tax return is required; lists of property transfers and other data. (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]
     118.170 [1969 c.591 §221; 1971 c.567 §6; repealed by
1977 c.870 §16 (118.171 enacted in lieu of 118.170)]
     118.171
Application of ORS chapter 305.
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]
     118.180 [Formerly 118.700; 1971 c.567 §7; 1973 c.100
§1; 1975 c.762 §6; repealed by 1977 c.870 §16 (118.171 enacted in lieu of
118.180)]
     118.190 [1973 c.100 §2; repealed by 1977 c.870 §59]
LIEN;
PAYMENT; COMPROMISE OF TAX
     118.210
Liability for tax. All
heirs, legatees, devisees, administrators, executors and trustees, and any
grantee or donee under a conveyance or gift made during the grantorÂ’s or donorÂ’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.
     118.220
When tax accrues and is payable. 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
decedentÂ’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]
     118.225
Extension of time for payment.
(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]
     118.230
Lien of tax; liability for payment; assessment and collection of taxes. (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]
     118.240
Delivery of property prior to collection of tax by personal representative or
trustee prohibited. 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]
     118.250
To whom tax payable; issuing receipts. (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]
     118.260
Penalties for delinquency; failure to file and fraud; interest; deposit where
tax not determined. (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]
     118.270
Property from which tax is collectible. 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]
     118.280
Power to sell for payment of tax; tax lien transferred to proceeds when
property of estate sold or mortgaged. (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]
     118.290
Duty of recipient when legacy payable out of property; legacy for limited
period. (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]
     118.300
Deferred payment election; bond or letter of credit. 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]
     118.310
Transfer of stock or obligations by foreign representative or trustee; payment
of tax prior to transfer. 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.
     118.320 [Amended by 1969 c.178 §1; 1973 c.254 §4;
1975 c.762 §11; 1985 c.85 §6; repealed by 1987 c.646 §9]
     118.330 [Amended by 1969 c.178 §2; repealed by 1975
c.762 §19]
     118.340 [Amended by 1973 c.254 §5; repealed by 1975
c.762 §19]
     118.350
Compromise and compounding tax; approval by court; proceedings in case of
actions or suits involving title to real property. (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]
     118.360 [Amended by 1959 c.273 §2; repealed by 1977
c.870 §16 (118.171 enacted in lieu of 188.360)]
     118.370 [Amended by 1955 c.727 §5; 1959 c.273 §3;
1971 c.567 §9; repealed by 1985 c.85 §13]
     118.380 [Amended by 1959 c.273 §4; 1967 c.162 §1;
repealed by 1971 c.652 §4]
     118.390 [Amended by 1971 c.296 §1; 1971 c.621 §24;
repealed by 1973 c.254 §6]
ADMINISTRATION
OF INHERITANCE TAX ACT
     118.410
Jurisdiction of tax cases.
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]
     118.420 [Amended by 1963 c.68 §2; 1967 c.132 §1;
repealed by 1969 c.591 §305]
     118.440 [Amended by 1961 c.455 §6; 1973 c.338 §1;
1979 c.516 §1; repealed by 1985 c.565 §10c]
     118.450 [1967 c.161 §1; 1973 c.254 §7; 1975 c.593 §3;
repealed by 1997 c.99 §24]
     118.460 [Amended by 1975 c.762 §12; repealed by 1979
c.516 §6]
     118.470
Representative or trustee to furnish additional reports on demand. 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]
     118.480 [Repealed by 1975 c.762 §19]
     118.490 [Repealed by 1981 c.705 §8]
     118.500 [Repealed by 1969 c.591 §305]
     118.510
Disposition of revenues. 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]
     118.520 [Repealed by 1959 c.273 §8]
     118.525
Disclosure of return information. (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 taxpayerÂ’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]
     118.535
Appraisal by department; costs.
(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 appraiserÂ’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.
     118.610 [Amended by 1967 c.131 §1; repealed by 1969
c.591 §305]
     118.620 [Repealed by 1969 c.591 §305]
     118.630 [Amended by 1963 c.68 §3; repealed by 1969
c.591 §305]
     118.640 [Amended by 1961 c.455 §7; 1969 c.591 §218;
renumbered 118.150]
     118.650 [Amended by 1959 c.273 §5; 1963 c.68 §4;
1967 c.133 §1; repealed by 1969 c.591 §305]
     118.660 [Amended by 1955 c.727 §7; 1963 c.68 §5;
1969 c.111 §1; 1969 c.591 §219; renumbered 118.160]
     118.670 [Repealed by 1969 c.591 §305]
     118.680 [Amended by 1963 c.68 §6; repealed by 1969
c.591 §305]
     118.690 [Repealed by 1969 c.591 §305]
     118.700 [Amended by 1963 c.68 §7; 1969 c.198 §58;
1969 c.591 §222; renumbered 118.180]
ENFORCEMENT
OF FOREIGN DEATH TAXES
     118.810
Application, construction and definition. (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
     118.820
Duty to file proof of death taxes due domiciliary state of nonresident decedent. 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.
     118.830
Form and requisites of proof; petition for accounting by tax officials of
domiciliary state. 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]
     118.840
Final accounting or discharge of executor or administrator. 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
     118.855
Definitions for ORS 118.855 to 118.880. 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
     (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
     118.860
Election to invoke provisions of ORS 118.855 to 118.880 where dispute exists as
to domicile of decedent for purpose of death taxes. 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 decedentÂ’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]
     118.865
Settlement agreement fixing amount of taxes due each state involved in dispute. (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]
     118.870
Arbitration procedure. 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 decedentÂ’s estate and shall be deemed an
administration expense thereof. [1959 c.573 §4]
     118.875
Limit on amount of interest and penalties. 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]
     118.880
Reciprocal statutes required in other states; resolving conflicts between
statutes. (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
     118.990
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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