FISCAL NOTE TO

SENATE, No. 704

STATE OF NEW JERSEY

DATED: NOVEMBER 1, 1996

      Senate Bill No. 704 of 1996 amends the New Jersey transfer inheritance tax to treat for tax purposes payments from an estate to children of brothers and sisters of decedents in the same manner as transfers to brothers and sisters. Presently, the first $25,000 of a transfer to brothers and sisters of a decedent is exempt from tax and the tax rates on any remainder range from 11 percent on amounts to $1.1 million to 16 percent on amounts over $1.7 million. Children of the sibling of a decedent, however, are not allowed the $25,000 exemption and the tax rates imposed are 15 percent and 16 percent below or above $700,000.

      The Division of Taxation has prepared a fiscal note to the bill. The division, based on data for estates of 1993 decedents, estimates the loss of revenue to the State would be approximately $68 million per year. The estimated cost of the $25,000 exemption is $51 million and the cost attributable to the reduction in tax rates is $17 million.

      The Office of Legislative Services accepts the estimates prepared by the division noting the division is the only source of data on inheritance and estate taxes for the State.

This fiscal note has been prepared pursuant to P.L.1980, c.67.