In 2025, Oregon legislators introduced several bills aimed at reforming the state's estate tax system, particularly focusing on increasing the exemption threshold. Currently, Oregon imposes an estate tax on estates valued over $1 million, with rates ranging from 10% to 16%. This low exemption threshold, coupled with relatively high tax rates, has prompted discussions on potential reforms to prevent the outmigration of wealthy residents and to modernize the tax system. See NFIB - NFIB Small Business AssociationTax Foundation+2Common Sense Institute+2Myatt & Bell P.C.+2Willamette Week+2Tax Foundation+2Common Sense Institute+2
Proposed Legislative Changes
A variety of bills have been introduced to address the estate tax exemption:
- House Bill 2058 (HB 2058): Proposes aligning Oregon's estate tax exemption with the federal exemption amount, setting it at $13.99 million for decedents dying on or after January 1, 2026. This would significantly raise the threshold, reducing the number of estates subject to the tax. See OLIS+6OLIS+6BillTrack50+6
- Senate Bill 648 (SB 648): Similar to HB 2058, this bill aims to raise the estate tax exemption threshold to $13.61 million, matching the federal basic exclusion amount. It also adjusts the filing requirement, stipulating that an estate tax return is necessary only for gross estates exceeding this value. Tax Foundation+3BillTrack50+3OLIS+3
- House Bill 2301 (HB 2301): Suggests an additional estate tax exclusion of $7 million and proposes a flat tax rate of 7% on estates exceeding this amount. This approach seeks to simplify the tax structure and provide relief to moderately sized estates. See OLIS
- House Bill 2362 (HB 2362): Introduces an additional exemption against the Oregon estate tax, with the exemption amount phasing out as the size of the estate increases. This bill aims to provide targeted relief to smaller estates while maintaining tax contributions from larger ones.
Rationale Behind the Reforms
The impetus for these proposed changes stems from concerns that Oregon's current estate tax structure may be driving high-net-worth individuals to relocate to states with more favorable tax environments. Reports indicate that Oregon's estate tax has contributed to the outmigration of wealthy retirees, potentially impacting the state's economy. Aligning the state's exemption threshold with the federal level or adjusting it to reflect current economic conditions could help retain residents and maintain economic stability. Tax Foundation+1Common Sense Institute+1Common Sense Institute
Current Status and Outlook
As of April 2025, these bills are under consideration in their respective legislative committees. Public hearings have been held, and stakeholders, including small business advocates, have expressed support for reforms that would raise the exemption threshold and index it to inflation. The legislative process is ongoing, and it remains to be seen which, if any, of these proposals will be enacted into law. NFIB - NFIB Small Business Association+1Tax Foundation+1
Oregonians and interested parties are encouraged to follow the progress of these bills and participate in public discussions to ensure that any changes to the estate tax system reflect the needs and values of the state's residents.