Bill Text: NJ A295 | 2016-2017 | Regular Session | Introduced

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Bill Title: Eliminates transfer inheritance tax for step-grandchildren.

Spectrum: Bipartisan Bill

Status: (Introduced - Dead) 2016-01-27 - Introduced, Referred to Assembly Appropriations Committee [A295 Detail]

Download: New_Jersey-2016-A295-Introduced.html

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ASSEMBLY, No. 295

STATE OF NEW JERSEY

217th LEGISLATURE

 

PRE-FILED FOR INTRODUCTION IN THE 2016 SESSION

 

 

Sponsored by:

Assemblywoman  BETTYLOU DECROCE

District 26 (Essex, Morris and Passaic)

Assemblyman  TROY SINGLETON

District 7 (Burlington)

Assemblyman  DANIEL R. BENSON

District 14 (Mercer and Middlesex)

 

Co-Sponsored by:

Assemblymen S.Kean and Webber

 

 

 

 

SYNOPSIS

     Eliminates transfer inheritance tax for step-grandchildren.

 

CURRENT VERSION OF TEXT

     Introduced Pending Technical Review by Legislative Counsel.

  

An Act eliminating the transfer inheritance tax for step-grandchildren and amending R.S.54:34-2.1.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    R.S.54:34-2.1 is amended to read as follows:

     54:34-2.1.  The transfer of property passing to any child to whom the decedent for not less than ten years prior to such transfer stood in the mutually acknowledged relation of a parent, provided such relationship began at or before the child's fifteenth birthday and was continuous for ten years thereafter, shall be taxed at the same rates and with the same exemptions as the transfer of property passing to a child of said decedent born in lawful wedlock.

     The transfer of property passing to a stepchild of a decedent, or the issue of any stepchild of a decedent, shall be taxed at the same rates and with the same exemptions as the transfer of property passing to a child of said decedent, or the issue of any child of said decedent, born in lawful wedlock.

     This section shall apply to the estate of every decedent, whether the said decedent died prior to June second, one thousand nine hundred and thirty-seven, or shall die after said date, but this section shall not entitle any person to a refund of any tax paid prior to said date.

(cf: R.S.54:34-2.1)

 

     2.    This act shall take effect January 1, 2015.

 

 

STATEMENT

 

     This bill would eliminate the State's transfer inheritance tax for step-grandchildren of a decedent by treating such persons the same as a decedent's grandchildren under the New Jersey Transfer Inheritance Tax Act, R.S.54:33-1 et seq.

      Currently, step-grandchildren are treated as Class D beneficiaries under subsection d. of R.S.54:34-2 since they do not fall within any of the other statutory classes of beneficiaries (Classes A and C; subsections a. and c.) set forth in that section of law.  As such, the step-grandchildren of a decedent are subject to a transfer inheritance tax of 15% on any property transfer of an amount up to $700,000, and 16% on any property transfer in excess of that amount.

     This is not the case with a decedent's grandchildren. Such
persons, being the "issue of any child or legally adopted child of a decedent," are considered to be Class A beneficiaries under subsection a. of R.S.54:34-2, and thus are not subject to any transfer inheritance tax pursuant to the provisions of that section of law.

     Under the bill, step-grandchildren, i.e., the issue of any stepchild of a decedent, would be treated like grandchildren with respect to a decedent's property transfer, and thus be considered Class A beneficiaries subject to no taxation.