18:26-3A.3 Simplified tax system

TRANSFER INHERITANCE AND ESTATE TAX  
SUBCHAPTER 3A. ESTATE TAX--DECEDENTS DYING AFTER DECEMBER 31, 2001
N.J.A.C. 18:26-3A.3 (2014)
§ 18:26-3A.3 Simplified tax system

   (a) The taxable value of the estate is determined as follows:

1. Net estate determined for New Jersey inheritance tax purposes under the provisions of the statutes and regulations in effect on December 31, 2001 (line 7 of recital page of form IT-R); plus

2. Real and tangible personal property located outside New Jersey; plus

3. Proceeds of any contract of insurance on the life of the decedent owned by the decedent or transferred by the decedent within three years of death paid to any beneficiary other than the executor, administrator, or estate; plus

4. All transfers made within three years of the decedent's death not included in the inheritance tax net estate; plus

5. In the event that the decedent was a surviving spouse/civil union partner of a decedent who died on or after February 19, 2007 and received qualified terminable interest property (QTIP) from the predeceased spouse or civil union partner for which the marital deduction was elected for Federal and/or New Jersey, the full value of the QTIP property; plus

6. Any other property includable in the Federal gross estate under the provisions of the Internal Revenue Code in effect on December 31, 2001; less

7. Any property passing outright to the decedent's surviving spouse or to the surviving civil union partner of a decedent who died on or after February 19, 2007, provided the surviving spouse/civil union partner was a U.S. citizen on the decedent's date of death. This deduction does not include QTIP (Qualified Terminable Interest Property) or similar property. QTIP is property that passes from the decedent and in which the surviving spouse or civil union partner has a qualifying income interest for life. The surviving spouse or civil union partner has a qualifying income interest for life if he or she is entitled to all or a specific portion of the income from the property payable annually or at more frequent intervals, or has a usufruct interest in the property (right to enjoy the property) for life and during the surviving spouse's or civil union partner's lifetime no person has a power to appoint any part of the property to any person other than the surviving spouse or civil union partner. Additionally, the surviving spouse or civil union partner must be a citizen of the United States on the decedent's date of death. If QTIP or the surviving spouse's or civil union partner's citizenship is a significant factor, consideration should be given to the use of the Form 706 method of filing; and

8. Any property which passes to, for the use of or in trust for any educational institution, church, hospital, orphan asylum, public library or Bible and tract society or to any institution or organization organized and exclusively for religious, charitable, benevolent, scientific, literary or educational purposes, including any institution instructing the blind in the use of dogs as guides, no part of the net earnings of which inures to the benefit of any private stockholder or other individual or corporation; provided, that this exemption shall not extend to such educational institutions and organizations of other states, the District of Columbia, territories and foreign countries which do not grant an equal, and like exemption to such institutions and organizations of this State. This exemption does not apply if any portion of the property can be used by, for the benefit of or paid to any private stockholder, individual or corporation.

(b) The taxable value of the estate is reduced by $ 60,000 and taxed at the following rates:

1. On any amount less than $ 615,000, no tax;

2. On any amount equal to or more than $ 615,000 but less than $ 667,174, 37.0 percent of the excess over $ 615,000;

3. On any amount equal to or more than $ 667,174 but less than $ 840,000, 4.8 percent of the excess over $ 667,174 plus $ 19,304;

4. On any amount equal to or more than $ 840,000 but less than $ 1,040,000, 5.6 percent of the excess over $ 840,000 plus $ 27,600;

5. On any amount equal to or more than $ 1,040,000 but less than $ 1,540,000, 6.4 percent of the excess over $ 1,040,000 plus $ 38,800;

6. On any amount equal to or more than $ 1,540,000 but less than $ 2,040,000, 7.2 percent of the excess over $ 1,540,000 plus $ 70,800;

7. On any amount equal to or more than $ 2,040,000 but less than $ 2,540,000, 8.0 percent of the excess over $ 2,040,000 plus $ 106,800;

8. On any amount equal to or more than $ 2,540,000 but less than $ 3,040,000, 8.8 percent of the excess over $ 2,540,000 plus $ 146,800;

9. On any amount equal to or more than $ 3,040,000 but less than $ 3,540,000, 9.6 percent of the excess over $ 3,040,000 plus $ 190,800;

10. On any amount equal to or more than $ 3,540,000 but less than $ 4,040,000, 10.4 percent of the excess over $ 3,540,000 plus $ 238,800;

11. On any amount equal to or more than $ 4,040,000 but less than $ 5,040,000, 11.2 percent of the excess over $ 4,040,000 plus $ 290,800;

12. On any amount equal to or more than $ 5,040,000 but less than $ 6,040,000, 12.0 percent of the excess over $ 5,040,000 plus $ 402,800;

13. On any amount equal to or more than $ 6,040,000 but less than $ 7,040,000, 12.8 percent of the excess over $ 6,040,000 plus $ 522,800;

14. On any amount equal to or more than $ 7,040,000 but less than $ 8,040,000, 13.6 percent of the excess over $ 7,040,000 plus $ 650,800;

15. On any amount equal to or more than $ 8,040,000 but less than $ 9,040,000, 14.4 percent of the excess over $ 8,040,000 plus $ 786,800;

16. On any amount equal to or more than $ 9,040,000 but less than $ 10,040,000, 15.2 percent of the excess over $ 9,040,000 plus $ 930,800; and

17. On any amount equal to or more than $ 10,040,000, 16.0 percent of the excess over $ 10,040,000 plus $ 1,082,800.