2001 Legislation
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SENATE BILL NO. 1031 – Estate taxes, apportionment, trusts


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Daily Data Tracking History

S1031................................................by JUDICIARY AND RULES
ESTATE TAX - Amends existing law to provide references to trusts and other
dispositive instruments in the apportionment of estate taxes.
01/25    Senate intro - 1st rdg - to printing
01/26    Rpt prt - to Jud
02/05    Rpt out - rec d/p - to 2nd rdg
02/06    2nd rdg - to 3rd rdg
02/07    3rd rdg - PASSED - 29-0-5(1 vacant)
      AYES -- Andreason, Boatright, Branch(Bartlett), Brandt, Bunderson,
      Burtenshaw, Danielson, Darrington, Davis, Deide, Dunklin, Frasure,
      Geddes, Goedde, Hawkins, Ingram, Keough, King-Barrutia, Lodge, Noh,
      Richardson, Risch, Schroeder, Sorensen, Stegner, Stennett, Wheeler,
      Whitworth, Williams,
      NAYS -- None
      Absent and excused -- Cameron, Ipsen, Lee, Sandy, Thorne
      Vacant -- Dist. #4
    Floor Sponsor -- Sorensen
    Title apvd - to House
02/08    House intro - 1st rdg - to Jud
03/20    Rpt out - rec d/p - to 2nd rdg
03/21    2nd rdg - to 3rd rdg
03/26    3rd rdg - PASSED - 66-0-4
      AYES -- Barraclough, Barrett, Bedke, Bell, Bieter, Black, Boe, Bolz,
      Bruneel, Callister, Campbell, Chase, Clark, Collins, Crow, Cuddy,
      Deal, Denney, Ellis, Ellsworth, Eskridge, Field(13), Field(20),
      Gagner, Gould, Hadley, Hammond, Hansen, Harwood, Henbest(Farley),
      Higgins, Hornbeck, Jaquet, Jones, Kellogg, Kendell, Kunz, Lake,
      Langford, Loertscher, Mader, Marley, McKague, Meyer, Montgomery,
      Mortensen, Moss, Moyle, Pearce, Pomeroy, Raybould, Ridinger, Roberts,
      Robison, Sali, Schaefer, Shepherd, Smith, Smylie, Stevenson, Stone,
      Tilman, Trail, Wood, Young, Mr. Speaker
      NAYS -- None
      Absent and excused -- Bradford, Pischner, Sellman, Wheeler
    Floor Sponsor -- Clark
    Title apvd - to Senate
03/28    To enrol
    Rpt enrol - Pres signed
03/29    Sp signed - to Governor
03/31    Governor signed
         Session Law Chapter 262
         Effective: 07/01/01

Bill Text

  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-sixth Legislature                  First Regular Session - 2001
                                       IN THE SENATE
                                    SENATE BILL NO. 1031
                              BY JUDICIARY AND RULES COMMITTEE
  1                                        AN ACT
  5    Be It Enacted by the Legislature of the State of Idaho:
  6        SECTION 1.  That Section 15-3-916, Idaho Code, be, and the same is  hereby
  7    amended to read as follows:
  8        15-3-916.  APPORTIONMENT  OF  ESTATE  TAXES. (a) For purposes of this sec-
  9    tion:
 10        (1)  "Estate" means the gross estate of a decedent as determined  for  the
 11        purpose of federal estate tax;
 12        (2)  "Person"  means any individual, partnership, association, joint stock
 13        company,  corporation,  government,  political  subdivision,  governmental
 14        agency, or local governmental agency;
 15        (3)  "Person interested in  the  estate"  means  any  person  entitled  to
 16        receive, or who has received, from a decedent or by reason of the death of
 17        a  decedent  any  property  or interest therein included in the decedent's
 18        estate. It includes a personal representative, conservator, and trustee;
 19        (4)  "State" means any state,  territory,  or  possession  of  the  United
 20        States, the District of Columbia, and the Commonwealth of Puerto Rico;
 21        (5)  "Tax"  means  the  federal  estate  tax  and the Idaho estate tax and
 22        interest and penalties imposed in addition to the tax;
 23        (6)  "Fiduciary" means personal representative or trustee.
 24        (b)  Unless the will, trust or other dispositive instrument otherwise pro-
 25    vides, the tax shall be  apportioned  among  all  persons  interested  in  the
 26    estate.  The  apportionment  is to be made in the proportion that the value of
 27    the interest of each person interested in the estate bears to the total  value
 28    of  the  interests of all persons interested in the estate. The values used in
 29    determining the tax are to be used for that purpose. If the  decedent's  will,
 30    trust or other dispositive instrument directs a method of apportionment of tax
 31    different  from the method described in this code, the method described in the
 32    will, trust or other dispositive instrument controls.
 33        (c)  (1) The court in which venue  lies  for  the  administration  of  the
 34        estate of a decedent, on petition for the purpose may determine the appor-
 35        tionment of the tax.
 36        (2)  If  the  court finds that it is inequitable to apportion interest and
 37        penalties in the manner  provided  in  subsection  (b)  of  this  section,
 38        because  of  special circumstances, it may direct apportionment thereof in
 39        the manner it finds equitable.
 40        (3)  If the court finds that the  assessment  of  penalties  and  interest
 41        assessed  in  relation to the tax is due to delay caused by the negligence
 42        of the fiduciary, the court may charge him with the amount of the assessed
 43        penalties and interest.
  1        (4)  In any action to recover from any person interested in the estate the
  2        amount of the tax apportioned to the person in accordance with  this  code
  3        the  determination  of  the  court in respect thereto shall be prima facie
  4        correct.
  5        (d)  (1) The personal representative or other person in possession of  the
  6        property  of  the  decedent  required to pay the tax may withhold from any
  7        property distributable to any person interested in the  estate,  upon  its
  8        distribution  to  him,  the amount of tax attributable to his interest. If
  9        the property in possession of the personal representative or other  person
 10        required  to pay the tax and distributable to any person interested in the
 11        estate is insufficient to satisfy the  proportionate  amount  of  the  tax
 12        determined to be due from the person, the personal representative or other
 13        person  required to pay the tax may recover the deficiency from the person
 14        interested in the estate. If the property is not in the possession of  the
 15        personal  representative  or the other person required to pay the tax, the
 16        personal representative or the other person required to pay  the  tax  may
 17        recover  from  any  person  interested in the estate the amount of the tax
 18        apportioned to the person in accordance with this act.
 19        (2)  If property held by the personal representative is distributed  prior
 20        to final apportionment of the tax, the distributee shall provide a bond or
 21        other security for the apportionment liability in the form and amount pre-
 22        scribed by the personal representative.
 23        (e)  (1) In  making  an  apportionment,  allowances  shall be made for any
 24        exemptions granted, any classification made of persons interested  in  the
 25        estate  and for any deductions and credits allowed by the law imposing the
 26        tax.
 27        (2)  Any exemption or deduction allowed by reason of the  relationship  of
 28        any person to the decedent or by reason of the purposes of the gift inures
 29        to  the  benefit  of the person bearing such relationship or receiving the
 30        gift; but if an interest is subject to a prior present interest  which  is
 31        not  allowable  as  a deduction, the tax apportionable against the present
 32        interest shall be paid from principal.
 33        (3)  Any deduction for property previously taxed and any credit  for  gift
 34        taxes  or  death  taxes  of  a foreign country paid by the decedent or his
 35        estate inures to the proportionate benefit of all persons liable to appor-
 36        tionment.
 37        (4)  Any credit for inheritance, succession or estate taxes  or  taxes  in
 38        the  nature  thereof applicable to property or interests includable in the
 39        estate, inures to the benefit of the persons or interests chargeable  with
 40        the  payment thereof to the extent proportionately that the credit reduces
 41        the tax.
 42        (5)  To the extent that property passing to or in trust  for  a  surviving
 43        spouse  or  any  charitable,  public  or  similar gift or devise is not an
 44        allowable deduction for purposes of the tax solely by reason of an inheri-
 45        tance tax or other death tax imposed upon and deductible  from  the  prop-
 46        erty, the property is not included in the computation provided for in sub-
 47        section  (b)  of this section, and to that extent no apportionment is made
 48        against the property. The sentence immediately preceding does not apply to
 49        any case if the result would be to  deprive  the  estate  of  a  deduction
 50        otherwise allowable under section 2053(d) of the Internal Revenue  Code of
 51        1954  [U.S.C.,  tit.  26, sec. 2053(d)], as amended, of the United States,
 52        relating to deduction for state death taxes on transfers for public, char-
 53        itable, or religious uses.
 54        (f)  No interest in income and no estate for years or for  life  or  other
 55    temporary  interest  in  any  property  or fund is subject to apportionment as
  1    between the temporary interest and the remainder. The  tax  on  the  temporary
  2    interest  and the tax, if any, on the remainder is chargeable against the cor-
  3    pus of the property or funds subject to the temporary interest and remainder.
  4        (g)  Neither the personal representative nor other person required to  pay
  5    the  tax  is under any duty to institute any action to recover from any person
  6    interested in the estate the amount of the tax apportioned to the person until
  7    the expiration of the three (3) months next following final  determination  of
  8    the tax. A personal representative or other person required to pay the tax who
  9    institutes  the  action  within  a reasonable time after the three (3) months'
 10    period is not subject to any liability or surcharge because any portion of the
 11    tax apportioned to any person interested in the estate was  collectable  at  a
 12    time  following the death of the decedent but thereafter became uncollectable.
 13    If the personal representative or other person required to pay the tax  cannot
 14    collect  from any person interested in the estate the amount of the tax appor-
 15    tioned to the person, the amount not recoverable  shall  be  equitably  appor-
 16    tioned  among  the  other  persons interested in the estate who are subject to
 17    apportionment.
 18        (h)  A personal  representative  acting  in  another  state  or  a  person
 19    required  to pay the tax domiciled in another state may institute an action in
 20    the courts of this state and may recover a proportionate amount of the federal
 21    estate tax, of an estate tax payable to another state or of a death  duty  due
 22    by  a  decedent's  estate  to  another  state, from a person interested in the
 23    estate who is either domiciled in this state or  who  owns  property  in  this
 24    state  subject  to attachment or execution. For the purposes of the action the
 25    determination of apportionment by the court having jurisdiction of the  admin-
 26    istration of the decedent's estate in the other state is prima facie correct.

Statement of Purpose / Fiscal Impact

                       STATEMENT OF PURPOSE
                            RS 10714

This bill amends existing Idaho Code Section 15-3-916, relating to
apportionment of estate taxes, to allow trusts or other dispositive
instruments to provide for apportionment of taxes other than as
specified by the statute for Idaho estate taxes in its definition
of "tax".  This corrects a technical oversight in the original bill
and conforms the language of the statute to actual practice.

This bill is revenue neutral and will have no effect on revenues or

     Robert L. Aldridge
     1209 North Eighth Street
     Boise, Idaho  83702-4297
     Telephone:  208-336-9880
     FAX:  208-336-9882