The New York Non-resident Estate Tax: A Tax That Can Be Less Than It Seems To Be

This article discusses the proper amount of the New York State estate tax on the estate of a US citizen who died domiciled in a jurisdiction that does not impose a state death tax and owned property that is taxable in New York. On the face of its statute, New York would seem to take for itself any portion of the full potential credit for state death taxes that is not absorbed by other state taxes. Or in this case, over $400,000 on approximately $50,000 of New York tangible personal property. Here, the State Tax Commission, following the principles set forth in Revenue Ruling 56-230, that the only property with respect to which a credit for state death taxes would be allowable under Section 2011 of the Code is property within the jurisdiction of states of the United States the transfer of which was constitutionally subject to tax by those states, determined that the New York tax would be its pro rata share of that reduced credit; or approximately $3,000. These principles seemingly would be equally applicable to the estate of a non-New York resident who dies in a Sop Tax state which has not de-coupled from the federal estate tax and owned property taxable in New York.