NEW JERSEY

TRANSFER INHERITANCE AND ESTATE TAXES

Transfer Inheritance Tax

Tax imposed.-A tax is imposed upon the transfer of any property, real or personal, of the value of $500 or over, or of any interest therein or income therefrom, in trust or otherwise, to persons or corporations, except as hereinafter provided, as follows: (1)

Transfers taxable. The transfers taxable under this act include (a) transfers by will or by intestate laws of this State from any person dying seized or possessed of the property while a resident of this State; (b) transfers by will or intestate laws of real property within this State or of goods, wares, and merchandise within this State, and the decedent was a nonresident of the State at the time of his death; (c) or when the transfer is of property made by a resident, or is of real property within this State, or of goods, wares, and merchandise within this State, made by a nonresident, by deed, grant, bargain, sale, or gift made in contemplation of the death of the grantor, vendor, or donor, or intended to take effect in possession or enjoyment at or after such death. (1)

Same. When any person or corporation comes into the possession or enjoyment, by a transfer from a resident or from a nonresident decedent, when such nonresident decedent's property consists of real property within this State, or of an estate in expectancy of any kind which is contingent or defeasible, transferred by an instrument taking effect after the passage of this act, or of any property transferred pursuant to a power of appointment contained in any instrument taking effect after the passage of this act, such a transfer is taxable hereunder. Whenever property, real or personal, is held or deposited in the joint names of two or more persons, and transferred to the survivor (or survivors) under the doctrine of survivorship, the right of the survivor to ownership or possession and enjoyment is deemed a transfer taxable hereunder, except such part as may be proved by the survivor to have originally belonged to him and never to have belonged to the decedent; but this provision applies, in the case of a nonresident decedent, only to real property within this State or goods, wares, and merchandise within this State. (1)

Exemptions. Transfers of property to this State, or to municipal corporations or subdivisions thereof; proceeds of life insurance transferred to trustees and beneficiaries of trust deeds or agreements; soldiers' benefits from the Federal Government; and property passing since July 1, 1924, to State-aided educational institutions, are exempt from this tax. Each beneficiary in classes A and B is allowed an exemption of $5,000. In classes C and D, the transfer is exempt if valued at less than $500; if more than $500, no exemption is allowed. (1)

Classification of beneficiaries.-The beneficiaries under this act are classified as follows: Class A: Father, mother, grandparents, busband, wife, child, or adopted child of decedent or issue of either, mutually acknowledged child, and stepchild. Class B: Churches, hospitals, orphan asylums, public libraries, Bible and tract societies, religious, benevolent, and charitable institutions and organizations and transfers for religious, benevolent, and charitable uses and purposes. Class C: Brother or sister of decedent, wife or widow of a son of decedent, or husband of a daughter. Class D: All others. (1) Rates of tax. The rates of tax imposed on the amounts transferred are as follows: (1)

Payment of taxes; interest.-All taxes imposed by this act are payable to the State tax commissioner at the death of the testator, intestate, grantor, donor, or vendor, unless otherwise provided; if not paid within 1 year from such date, interest is charged at the rate of 10 percent per annum from the expiration of 1 year from such date. Said penalty of 10 percent per annum is not charged in case of unavoidable delay, but 6 percent is charged from the expiration of such year until the cause of delay is removed. (5, 6, 9)

Tax lien. The taxes assessed under this act are a lien on all property owned by the decedent as of the date of death until paid or secured by bond. (5)

Disposition of proceeds. After the close of each fiscal year, the State treasurer pays to the county treasurer of each county 5 percent of the amount of inheritance taxes collected from property of resident decedents in the county during the fiscal year. (Ch. 198, Session Laws of 1931.)

Administration of act. The provisions of this act are administered by the State tax commissioner.

Source of information.-Pamphlet "Transfer Inheritance Tax Act, Chapter 228, Laws of 1909 (as amended)," published by State tax commissioner, 1937.

Estate Tax

Tax imposed. In addition to the inheritance tax imposed under the above provisions, there is imposed an estate or transfer tax upon the transfer of the estate of every resident decedent which is subject to an estate tax payable to the United States under the provisions of the Federal Revenue Act of 1926.2 The amount of this State estate tax is the sum by which the maximum credit allowable against any Federal estate tax payable to the United States on account of taxes paid to any State or Territory of the United States or the District of Columbia, exceeds the aggregate amount of all estate, inheritance, succession, or legacy taxes actually paid to any such State or Territory or to the District of Columbia, including inheritance, succession, or legacy taxes actually paid this State, in respect to any property owned by such decedent or subject to such taxes as a part of or in connection with his estate. (1)

Filing returns.—All persons and corporations liable for the payment of this tax are required to file with the State tax commissioner a copy of the Federal estate tax return within 30 days after filing of the original with the Federal Government. A copy of any communication received from the Federal Government making any final change in said return, or confirming, increasing, or diminishing the tax shown to be due is required to be filed within 30 days after receipt thereof. (7)

Payment of tax; interest. The taxes imposed under these provisions are payable to the State tax commissioner and are due at the date of death of the decedent; if not paid within 18 months therefrom, interest is charged at the rate of 6 percent per annum from the expiration of said 18 months until paid. The commissioner may extend the time for payment with or without interest for such period as the circumstances require. (5, 6)

Tax lien. All administrators, executors, trustees, grantees, donees, and vendees are personally liable for any and all taxes imposed under these provisions until paid, but no lien attaches to any property of an estate on account of such taxes. (6)

Disposition of proceeds. The proceeds of these taxes are paid into the State treasury for the exclusive use of the State. (6)

Administration of act.-The provisions of this act are administered by the State tax commissioner.

Source of information.-Chapter 243, Session Laws of 1934.

The provisions of law relating to this tax are shown on p. 7.

NEW MEXICO

SUCCESSION TAX

Tax imposed. A succession tax is imposed by this State upon the transfer of property under the conditions and subject to the limitations and exemptions prescribed. (1102)

Transfers taxable. This tax applies to all estates which pass by will or inheritance or by statutes. So far as nonresidents of this State are concerned, the tax applies to the following property passing by will or inheritance under the laws of any other State or country: All real estate and tangible personal property within this State; all intangible personal property, including money on deposit within this State; all intangible personal property, including bonds, securities, shares of stock, and choses in action, the evidence of ownership of which is actually within this State; and shares of the capital stock or registered bonds of all domestic corporations, the certificates of which stock or bonds are without this State, if the laws of decedent's State or country of residence imposes a similar tax upon such shares or bonds of domestic corporations, held under such conditions by residents of this State at their decease. It is provided, however, that personal property of a nonresident decedent is not subject to this tax if a like exemption is made by decedent's State or country of residence in favor of residents of this State. (1102, 1103)

Same. This tax applies also to property held in joint names and passing under the doctrine of survivorship, except to the extent of the value which is shown originally belonged to the survivor. All gifts of real or personal property by deed, grant, or other conveyance made in contemplation of death, except in case of bona fide sales, are termed "testamentary gifts" and are taxable hereunder. All transfers and alienations by deed, grant, or other conveyance, of real and personal property, to take effect upon the death of the grantor or donor, are subject to this tax upon the same principles and percentages regarding the degree of relationship; and the grantee or donee of any such estate is required to pay a tax at the rate of 3 percent or 11⁄2 percent of the value of such property, according to his degree of relationship to the grantor or donor. This tax on "testamentary gifts" is in addition to the tax upon inheritances. (1102a, 1117)

Same. Whenever any person or corporation exercises any power of appointment derived from any disposition of property, all property under such appointment when made is taxable in the same manner as though it belonged absolutely to the donee of such power and had been bequeathed or devised by him by will. Upon failure or omission to exercise such a power, the passing of the property taxable under the laws of this State is deemed to take place to the extent of such omission or failure. (1118)

Deductions allowed.-In computing this tax, there are deducted from the gross value of the estate the exemptions hereinafter shown, as well as funeral expenses, cost of administration, and indebtedness of decedent at time of death. (1101a)

Exemptions. The estate of every decedent to the amount of $10,000 when passing to the beneficiaries of class A is exempt from this tax, and to the amount of $500 when passing to beneficiaries of class B. All gifts of paintings, pictures, books, engravings, bronzes, curios, bric-a-brac, arms and armor, and collections of articles of beauty or interest, made by will to any corporation or institution located in this State for free exhibition and preservation for public benefit, are exempt also. Gifts to or for the use of this State, or any political subdivision thereof, for public purposes; or to corporations or associations for religious, charitable, scientific, literary, or educational purposes, for use within this State, or to fraternal organizations for such purposes, within this State, are not taxed. (1101)

Classification of beneficiaries.-The beneficiaries under this act are classified as follows: Class A: Husband, wife, parents, lineal descendants, adopted child or lineal descendant thereof, wife or widow of a son or husband of a daughter, whether such son or daughter was born in wedlock or adopted, or brother or sister, of decedent. Class B: All others. (1101)

Rates of tax.-All estates which pass to the parent or parents, husband, wife, lineal descendants, or adopted child, of the decedent, are taxed at the rate of 1 percent of the value thereof; if passing to collateral kindred or to strangers to the blood, or to any corporation, voluntary association or society, the tax is at the rate of 5 percent of such value. (1102)

Filing returns.-Executors and administrators are required to file with the clerk of the probate court, within 30 days after appointment, an inventory of all real and personal property of the decedent. (1102b)

Payment of tax. This tax is payable to the State treasurer within 12 months of the qualification of the executor or administrator, unless the probate court extends such time, but such extension is not to exceed 12 months. Executors and administrators are charged interest at the rate of 10 percent per annum from the due date of such tax until payment thereof. (1102, 1111)

Tax lien. The tax imposed by this act remains a lien on all estates and interests therein until paid, and the State treasurer has the right of seizure and distraint of any personal property which is about to be removed out of the State, concealed, or otherwise disposed of, to avoid the payment of said tax. (1104)

Disposition of proceeds. The proceeds of this tax are paid into the general fund of the State. Not exceeding 5 percent thereof is held in a suspense fund and is used for paying refunds. (1111, 1122)

Administration of act.-The State bureau of revenue administers and enforces the provisions of this act. (1119)

Sources of information.-Chapter 141, New Mexico Statutes Annotated, 1929, and Supplement of 1938.