If you’re trying to minimize your tax bill, living in Oregon could work against you. Oregon is one of the few states in the country that levies an estate tax. Moreover, the Oregon estate tax has a relatively low threshold, meaning it’s not just the superrich who have to worry about it.
How Estate Taxes Work
An estate tax is a tax that is levied on estates of a certain size. If an estate is subject to an estate tax, this tax is paid before the heirs receive their inheritance. Estate taxes are similar to inheritance taxes, but the key difference is that inheritance taxes are levied on the heirs. Sometimes the term “death tax” is used to refer to both estate and inheritance taxes.
In the U.S., the federal government imposes an estate tax but not an inheritance tax. To determine whether an estate has to pay the federal estate tax, the fair market value of all of the assets are calculated. If the total exceeds the threshold, the estate must pay the federal estate tax. In 2025, the threshold is $13,990,000.
Most estates are not worth nearly $13 million, so most people don’t have to worry about federal estate taxes. However, some states impose their own estate and/or inheritance taxes, and Oregon is one of those states.
How Oregon’s Estate Tax Stands Out
According to the Tax Foundation, the following states have estate taxes, with the following thresholds as of 2024:
- Connecticut: $13.61 million
- Illinois: $4 million
- Maine: $6.8 million
- Massachusetts: $2 million
- Maryland: $5 million
- Minnesota: $3 million
- New York: $6.94 million
- Oregon: $1 million
- Rhode Island: $1.77 million
- Vermont: $5 million
- Washington: $2.19 million
Oregon has the lowest estate tax threshold in the country. An estate only needs to have a value of $1 million for taxes to kick in. For estates that have to pay the Oregon estate tax, the tax rate is 10% to 16%.
Why $1 Million Is a Low Bar
A million dollars might sound like a lot of money, but estates can reach this threshold quite easily.
According to Redfin, the median sale price for a house in Oregon is $506,800 as of January 2025. If you own a home, there’s a good chance your estate is already halfway to the Oregon estate tax threshold. Add in your retirement accounts, savings accounts, and other assets, and it’s not too hard for the average person to reach the million-dollar threshold.
As a result, the Oregon estate tax doesn’t just apply to wealthy families. It applies to many average individuals who are trying to leave something for their children.
Will Oregon’s Estate Tax Change?
If you’re frustrated by the low estate tax threshold in Oregon, you’re not alone. Some lawmakers are trying to raise the threshold.
On February 7th, 2025, the Oregon House Republican Caucus announced it was holding a public hearing on HB 2301, a bill that would raise the Oregon estate tax threshold to $7 million. The bill would also change the amount of the tax to a flat 7% rate. According to the announcement, Oregonians have expressed overwhelming support for the bill.
If passed, this bill would represent a massive change in estate taxes for Oregonians. While many people meet the $1 million threshold, far fewer would meet the $7 million threshold.
What Can People in Oregon Do?
When people think about writing their will and getting their estate plan in order, they often neglect to think about taxes. This oversight is understandable in a way. After all, in most states, most people don’t need to think about estate taxes. Oregon is an exception. Because the threshold is so low, estate taxes should be a concern for many people.
The Oregon estate tax threshold may change in the future, but for now, Oregonians need to plan with a million-dollar threshold in mind. People with larger estates also need to consider the federal estate taxes, especially now that higher estate tax exemptions are set to end.
The good news is that there are strategies that you can implement to control the impact of taxes on your estate. For example, you might be able to use irrevocable trusts and lifetime giving to reduce your estate taxes – although you have to be mindful of rules for trusts as well as gift taxes.
There’s a lot to consider when you put together your estate plan. An estate planning attorney can help you review your options and create a strategy that makes sense for your situation. Contact Skinner Law.