From the APP:
A state Senate committee Monday approved a bill that would phase out New Jersey’s estate tax over five years.
The vote by the Senate Budget and Appropriations Committee was a win for business groups that have argued the tax drives Garden State residents out of state.
“The only individuals who are now paying the estate tax are those who due mostly to family or business reasons choose not to leave the state,” said Michele Siekerka, president of the New Jersey Business and Industry Association, a business lobby group. “Those who can leave New Jersey do.”
New Jersey taxes estates – cash, real estate, retirement accounts, life insurance benefits and other assets – worth more than $675,000. It is one of 14 states with an estate tax. And it has the nation’s lowest threshold. By comparison, the federal government for 2015 taxes estates worth more than $5.43 million.
New Jersey also taxes beneficiaries who receive inheritances, but grandparents, spouses, parents and children are exempt.
The bill was debated as lawmakers face pressure from two sides. They are searching for ways to lower the state’s notoriously high cost of living. And they are trying to generate enough revenue to pay for a checklist ranging from health benefits for state workers to transportation improvement projects.
The bill sponsored by Sen. Paul Sarlo, D-Bergen and Passaic, and Sen. Steven Oroho, R-Sussex, Warren, and Morris, would increase the threshold each year to $5 million in 2020 before eliminating it in 2021.