Does Tennessee have death taxes? Yes, it has two types: an inheritance
tax and an estate tax.
The Tennessee inheritance tax is a tax on the privilege of receiving property
transferred upon a decedent’s death. This law was established in
favor of the taxpayer and against the state. The inheritance tax is administered
by the Department of Revenue, and through the Commissioner.
Essentially, when the decedent’s gross estate is less than the maximum
single exemption allowable under T.C.A. Section 67-8-316, the estate’s
representative is not required to file the Inheritance Tax Form.
On the other hand, if the gross estate exceeds that exemption, the personal
representative must file the inheritance tax return.
The inheritance tax return must be filed with the Tennessee Department
of Revenue, and it is due 9 months after the decedent’s death, unless
the Department of Revenue has granted an extension.
Tennessee’s Estate Tax
Tennessee’s estate tax is covered under Part 2 of Chapter 8, Title
67, Tennessee Code Annotated. The Tennessee estate tax supplements the
inheritance tax to ensure that the state receives the total tax that is
at least equal to the “State Death Tax Credit,” which is allowed
by the federal government on the Federal Tax Return, Form 706.
If the total gross estate is less than specified exemptions, then no state
or federal tax is due. For example, for 2006 and thereafter, the applicable
exemption amount was $1,000,000.
Tennessee Phases Out Estate Tax
For deaths occurring in 2015, estates that are valued at $5,000,000 and
less are exempt from Tennessee’s estate tax.
Legislation that was passed in 2012 made it so the exemption would increase
gradually. Unless there are changes in the law, the estate tax will be
eliminated in 2016. (Tenn. HB 3760, SB 3762)
To learn more about the Tennessee estate tax,
contact me, David Whittaker, Attorney at Law at (888) 492-4735!