Our readers may have heard about legislation being considered by state lawmakers that would raise the exemption threshold for the Oregon estate tax. Oregon’s estate tax is considered among the most onerous of the estate taxes levied by 11 states and the District of Columbia.
That’s because the exemption threshold is the lowest, at $1 million. The tax rate is between 10% and 16%, which is comparable to the range in some other states. Oregon is also among the minority of states with an inheritance tax.
There has been concern that these taxes have spurred highly successful people to leave Oregon for other states with higher exemption thresholds or no estate (or inheritance) tax at all. Further, these taxes tend to discourage the transfer of intergenerational wealth, which has been at an all-time high in recent years.
That bill, which would have raised the exemption threshold to $2.5 million, failed to pass before the legislature adjourned last month. Now advocates for change are hoping that another strategy that involves taking the issue directly to the voters will prevail.
What would the ballot proposition do?
Advocates for minimizing the tax burden on Oregon residents are working to collect enough signatures to get a proposition on the November 2026 ballot that would go further than the proposed legislation. Initiative Petition (IP) 51, which is titled End of the Death Tax, would “repeal the Oregon estate tax, prohibit an inheritance tax, and prohibit both at the local level as well,” according to the Cascade Policy Institute.
Those who live in states like Oregon that have their own estate tax as well as an inheritance tax (at least for the time being) can still take steps to minimize how much of their estate will go to the government rather than their loved ones and other beneficiaries. They can also take steps to avoid or minimize their federal estate tax burden.
This often requires careful and strategic estate planning – particularly for very large estates. It’s also critical to know the current applicable laws and to adhere to them. Getting experienced estate planning guidance is the best place to start.