18:26-3.2 Amount and nature of tax

TRANSFER INHERITANCE AND ESTATE TAX  
SUBCHAPTER 3. ADDITIONAL TAX (NEW JERSEY ESTATE TAX)
N.J.A.C. 18:26-3.2 (2014)
§ 18:26-3.2 Amount and nature of tax

   (a) The New Jersey estate tax is that amount representing the difference between the gross amount of the inheritance, legacy and succession taxes actually paid this State and any other states, territories, possessions, or the District of Columbia and the amount of the credit allowable against the Federal estate tax due the United States.

Example:

Mr. "A", a New Jersey resident, died on July 16, 1992, having a taxable estate of $ 700,000 for Federal estate tax purposes. The credit allowable for State taxes under the Federal estate tax law was $ 18,000, the amount actually paid to New Jersey for inheritance taxes was $ 6,000. The New Jersey estate tax due is $ 12,000.

(b) The New Jersey estate tax does not in any way interfere with the operation of the inheritance tax so as to decrease any inheritance, succession or legacy tax due or to become due this State or any other state, territory, possession, or the District of Columbia or to impair the lien of this State for any tax. The determination of the inheritance tax chargeable need not be suspended until the estate tax, if any, payable to New Jersey, is assessed. Neither is it necessary to withhold the filing of the Federal estate tax return pending the determination of the amount of the New Jersey inheritance taxes chargeable. Where, however, the value of a bequest, in trust or otherwise, to a surviving spouse is made dependent upon the value of the decedent's adjusted gross estate, as finally fixed for Federal estate purposes, the New Jersey transfer inheritance tax chargeable cannot be determined until the Federal estate tax proceedings have been finally completed.

(c) The estate tax due this State is payable out of the same funds as those from which the Federal estate taxes are payable.

(d) The tax imposed upon the estates of resident decedents in New Jersey, unlike the inheritance tax, does not constitute a lien on any of the property, real or personal, of the estate, and therefore waivers or consents to transfer are unnecessary.

(e) For estates with date of death on or after July 1, 1993, no assessment of additional estate tax shall be made after the expiration of more than four years from the date of filing of an estate tax return except in the following cases:

1. The return is false or fraudulent with the intent to evade tax;

2. If before the expiration of the four year period prescribed in this subsection for the assessment of additional tax a taxpayer consents in writing that such period may be extended, the amount of such additional tax may be determined at any time within such period. The period so extended may be further extended by subsequent consents in writing made before the expiration of the extended period;

3. An additional or increased estate tax becomes payable as a result of a redetermination, or additional or corrected assessment of estate, inheritance, succession, or legacy taxes by the United States government or any state or territory of the United States, including the District of Columbia. (See N.J.A.C. 18:26-3.4 for requirement to notify the Division of a redetermination of estate tax by the Internal Revenue Service.); or

4. The Federal estate tax chargeable on final assessment has not been definitely determined.

(f) The taxes assessed pursuant to (e)3 and 4 above shall be made within four years from the date the additional or increased estate tax becomes payable or the Federal estate tax chargeable on final assessment is definitely determined and the Branch is properly notified pursuant to N.J.A.C. 18:26-3.4.