New Jersey Democrats and Republicans arrived at a deal this last week. Though not everyone is happy, making deals is what gets legislation done and an increase is such deals would be appreciated.
Current Republican Governor Chris Christie wanted to eliminate the New Jersey Estate Tax. He saw the tax as a force pushing affluent retirees out of New Jersey. The Democrats wanted to fund highway repair by raising the New Jersey gas tax. Showing that political horse trading is not a dead art, the two sides negotiated. These changes to the tax code will go into effect the sooner of two weeks after Chris Christie signing the bill or November 1, 2016.
The Gas Tax Rises
The gas tax will rise 23 cents a gallon to 37.5 cents a gallon. This transforms the New Jersey tax from the country’s second lowest tax to the seventh highest gasoline tax. The new tax funds an eight-year, $16 billion Transportation Trust Fund. Hopefully, meeting goals will result in new and badly needed road, bridge, and rail projects.
Phasing Out The New Jersey Estate Tax
In exchange for the highway funding, the Republicans received their goal of ending the New Jersey Estate Tax as well as a small, 3/8% reduction in the sales tax. The Estate Tax exemption will increase from the current $675,000 to $2,000,000 in 2017 and then elimination in 2018. Noticeably absent in the negotiations; the New Jersey Inheritance Tax remains unchanged.
Updating your documents might be to your advantage if your current documents have been crafted to reduce or avoid the New Jersey Estate Tax. Therefore, I suggest that you Contact our office for a free consultation. We can determine if you would benefit from an update.
Wills, Trusts, Probate, and Estate Litigation it’s all we do!
Peter Klenk, Esq.