Oregon Chapter 118
Chapter 118 — Inheritance TaxDownload Full 2005 Oregon Revised Statutes (coming soon!)
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Chapter 118 —
Inheritance Tax
2007 EDITION
INHERITANCE TAX
PROBATE LAW
GENERAL PROVISIONS
118.005 Definitions
for ORS 118.005 to 118.840
118.007 Connection
to federal law; meaning of terms
118.009 Legislative
findings
118.010 Imposition
and amount of tax in general; out-of-state property; nonresident decedents;
rules
118.013 Taxable
estate adjustment for
118.016
118.019 Gross
estate of surviving spouse;
118.100 Time
for paying tax; refunds; effects of change in federal estate tax return or
special valuation disqualification
118.120 Qualified
family-owned business interests; additional tax
118.140 Exclusion
of value of natural resource or commercial fishing property from gross estate;
rules
118.160 When
tax return is required; lists of property transfers and other data
118.171 Application
of ORS chapter 305
LIEN; PAYMENT; COMPROMISE OF TAX
118.210 Liability
for tax
118.220 When
tax accrues and is payable
118.225 Extension
of time for payment
118.230 Lien
of tax; liability for payment; assessment and collection of taxes
118.240 Delivery
of property prior to collection of tax by personal representative or trustee
prohibited
118.250 To
whom tax payable; issuing receipts
118.260 Penalties
for delinquency; failure to file and fraud; interest; deposit where tax not
determined
118.270 Property
from which tax is collectible
118.280 Power
to sell for payment of tax; tax lien transferred to proceeds when property of
estate sold or mortgaged
118.290 Duty
of recipient when legacy payable out of property; legacy for limited period
118.300 Deferred
payment election; bond or letter of credit
118.310 Transfer
of stock or obligations by foreign representative or trustee; payment of tax
prior to transfer
118.350 Compromise
and compounding tax; approval by court; proceedings in case of actions or suits
involving title to real property
ADMINISTRATION OF INHERITANCE TAX ACT
118.410 Jurisdiction
of tax cases
118.470 Representative
or trustee to furnish additional reports on demand
118.510 Disposition
of revenues
118.525 Disclosure
of return information
118.535 Appraisal
by department; costs
ENFORCEMENT OF FOREIGN DEATH TAXES
118.810 Application,
construction and definition
118.820 Duty
to file proof of death taxes due domiciliary state of nonresident decedent
118.830 Form
and requisites of proof; petition for accounting by tax officials of
domiciliary state
118.840 Final
accounting or discharge of executor or administrator
DISPUTES RESPECTING DOMICILE OF DECEDENT
118.855 Definitions
for ORS 118.855 to 118.880
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
118.865 Settlement
agreement fixing amount of taxes due each state involved in dispute
118.870 Arbitration
procedure
118.875 Limit
on amount of interest and penalties
118.880 Reciprocal
statutes required in other states; resolving conflicts between statutes
PENALTIES
118.990 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 decedent’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 decedent’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 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]
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]
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 decedent’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 decedent’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 transferee’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 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.
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
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]
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