The Senate approved a bill to raise Oregon’s estate tax threshold and increase estate taxes above $3 million on February 24, sending it to the House.
The bill passed with a vote of 22-5.
On February 13, Democrats on the Revenue Committee voted 3-2 to approve House Bill 1511, which would raise Oregon’s estate tax threshold from $1 million to $2.5 million.
This means that an estate worth $1 million will no longer be subject to estate taxes upon the owner’s death, and those who inherit the estate will no longer have to worry about the tax burden.
The trade-off is an increase in taxes on estates worth more than $3 million, which will make up for the money the state collects through 2029 through the current estate tax.
Sen. Mike McClain (R-Powell Butte) speaks against SB 1599 A at the Oregon State Capitol on Monday, February 23, 2026 in Salem.
What is inheritance tax?
Estate taxes can be levied on items that the deceased owned or had an interest in at the time of death. The tax is paid by the person’s estate and reduces the beneficiary’s estate.
The federal government imposes an estate tax, but the threshold in most states is high enough that many people don’t have to worry: $15 million. However, in some states, including Oregon, the threshold is much lower.
What is the estate tax in Oregon?
Oregon currently has the lowest estate tax threshold in the nation, including 12 states and the District of Columbia. Compared to Connecticut’s $13 million threshold or Washington state’s $3 million threshold, Oregonians don’t have to be millionaires to be affected by the tax.
The tax threshold has also not changed since 2011, meaning many Oregonians are approaching that number.
Sam Tutko, vice president at Miser Wealth Partners, said Oregonians who own a home, have $60,000 in a checking account and a 401(k) could be at risk from estate taxes because Oregon’s exemption is $1 million.
“I think this is the middle-class tax relief our voters asked for,” said Sen. Anthony Broadman, D-Bend. “Nurses, police officers and firefighters who bought homes for $200,000 in 2005 found themselves required to file estate tax returns.”
Some of the senators who voted against it opposed increasing taxes on people who exceed the threshold.
“When you increase the incentives for people with larger properties to move, they’re likely to do so,” said Sen. Mike McLane, D-Powell. “We’ve already had people taking advice from estate planners to buy a home and establish residency in another state.”
If the bill passes, the top marginal tax rate on high-value properties will increase by 3.9 percentage points.
Ginnie Sandoval is the Oregon Wire reporter for the Statesman Journal. Sandoval’s arrival time is GSandoval@statesmanjournal.com or at X @Gini Sandoval.
This article originally appeared in the Salem Statesman-Journal: Oregon estate tax bill heads to House, would raise threshold