Estate tax exemption raise dropped

Friday, March 09, 2007

SALEM - Supporters of an effort to increase the amount of the state's inheritance tax exemption can put down their party favors.

Less than a week after lawmakers announced they were raising the exemption from $1 million to $2 million in a two-bill package that creates a rainy day fund, lawmakers backed out of the deal on Thursday.

The action in the Oregon House prompted Senate Republicans to temporarily leave the Capitol in protest.

Representatives also removed a provision increasing the minimum corporate tax.

"I'm disappointed (the exemption increase) didn't hang on," said Farm Bureau lobbyist Don Schellenberg said today, "but I'm not disappointed the corporate minimum tax increase went away."

When asked if the trade-off was worth it, Schellenberg said.

"In the short term, yes; In the long term, no."

The Farm Bureau worked last session on increasing the inheritance tax exemption only to see the bill die in the Senate Revenue Committee after clearing the Oregon House.

Schellenberg said the Bureau hasn't given up on the issue in 2007.

"We believe we will have other opportunities yet this session to deal with the inheritance tax," he said.

One bill in the works, he said, would establish a $7.5 million exemption threshold for inheritors of agriculture and forestry lands - inheritors who often are land-rich and cash-poor.

The rainy day fund bills shift $290 million from canceled corporate tax rebates into the fund and put in place strict prohibitions on spending the money.

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