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Washington Supreme Court Invalidates State's Estate Tax

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02/04/2005
The Washington Supreme Court yesterday invalidated the state's estate tax in Estate of Hemphill v. State of Washington (No. 74974-4, 2/3/05). How nice. Now I am waiting for the U.S. Supreme Court to do the same for the federal estate tax. Guess I will be waiting for a long time.Further analysis from TaxProf Blog:
The estate tax scheme in Washington as currently written, though not automatically adopting specific federal law, must be administered complementary to federal law to guarantee that a separate state tax does not burden estates. A new tax burden can be created only by law that states such a purpose.
Ambiguities in taxing statutes are construed "most strongly against the government and in favor of the taxpayer." In this case, the original initiative creating this tax statute, our prior interpretation of the statute, and the current wording of the statute show that Washington still has a "pickup" tax based on current federal law. Any amount of a state estate tax not fully absorbed by a current federal credit is an invalid independent tax.

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