There's no inheritance tax in Oregon today. Beneficiaries don't owe a state tax just for receiving an inheritance. Instead, Oregon levies a separate estate tax on estates worth $1,000,000 or more—paid by the estate before distributions. That distinction matters when you're planning.
Oregon once had an inheritance-tax framework. But by 1987 the statutory inheritance tax rate was set to zero and the system effectively operated as a "pick-up" tax tied to a federal credit (the state death tax credit). When Congress later phased out that federal credit in the 2000s, Oregon had to choose whether to drop its death tax entirely or create its own stand-alone system. Lawmakers chose the latter. In 2011 Oregon put in place the modern estate tax (estate transfer tax) that applies independently of the federal credit.
The state also updated its administrative rules to make clear that the old inheritance-tax regime applies only to deaths before January 1, 2012. For deaths on or after that date, the relevant levy is an estate tax—not an inheritance tax on beneficiaries. There have been efforts to repeal the tax entirely. Most notably, Ballot Measure 84 (2012)—which would have phased out Oregon's estate (and any remaining inheritance) taxes—failed at the polls, keeping the system in place. Calls to revisit repeal or raise the threshold surface periodically.
Two Main Points on Inheritance Tax in Oregon
One, there's no inheritance tax in Oregon. Heirs don't pay a state tax solely because they inherit. Income tax may still apply later if inherited assets (like IRAs or rental property) produce taxable income. But that's a separate issue.
Two, estate tax may apply instead. If a decedent's Oregon estate is $1,000,000 or more, the estate likely must file Form OR-706 and may owe Oregon estate tax before anything is distributed. That's where trust structure, titling, lifetime gifts, and beneficiary designations can help control exposure.
(Read More: Learn about revocable trusts in Oregon versus Nevada and the cost of probate in Oregon.)
Sources
- Oregon Statutes (§ 112.025, § 112.035, § 112.572, § 112.065, § 112.035)