Texas Inheritance Tax Repealed

Effective Sept. 1, 2015, the Texas Inheritance Tax imposed by Tax Code Chapter 211 is repealed. The legislation repealing the tax is Senate Bill 752, 84th Regular Session (2015). The bill also amended Section 124.001(3) of the Estates Code.

Inheritance Tax Interest Rates

Effective for taxes due on or after January 1, 2000, the interest rate on delinquent taxes is a variable rate. This reflects a law change to a variable interest rate based on the prime rate plus one percent, as published in the Wall Street Journal on the first day of each calendar year that is not a Saturday, Sunday, or legal holiday.

Interest Rates (Year 2000 to Current Year)

• 2009 – 4.25 percent
• 2008 – 8.25 percent
• 2007 – 9.25 percent
• 2006 – 8.25 percent
• 2005 – 6.25 percent
• 2004 – 5.00 percent
• 2003 – 5.25 percent
• 2002 – 5.75 percent
• 2001 – 10.50 percent
• 2000 – 9.50 percent

Interest rates prior to January 1, 2000

• 10% per annum simple interest for due dates prior to September 1, 1991
• 12% compounded monthly for due dates on or after September 1, 1991, through December 31, 1993
• 12% per annum simple interest from January 1, 1994, through December 31, 1999, on all outstanding tax balances.

The interest begins to accrue nine months after the day of death of the decedent on whose estate the tax is determined or, in the case of taxes on generation-skipping transfers, on the original due date of the taxes.

Rate Details and Other Information

Rates

Estates that exceed the minimum federal estate tax filing requirement must file an Inheritance Tax return and pay any applicable tax based on the federal credit for state death taxes.

Due Date

Nine months after date of death.

Electronic Reporting

Not at this time.

Resources

New Statutes: http://www.statutes.legis.state.tx.us/Docs/TX/htm/TX.211.htm

Inheritance Tax Rules: http://texreg.sos.state.tx.us/public/readtac$ext.ViewTAC?tac_view=5&ti=34&pt=1&ch=3&sch=M&rl=Y

General Rules: http://texreg.sos.state.tx.us/public/readtac$ext.ViewTAC?tac_view=5&ti=34&pt=1&ch=3&sch=A&rl=Y

State Tax Automated Research (STAR) System: http://cpastar2.cpa.state.tx.us/