Oregon passes $15M estate tax exemption to support family-owned farms and businesses

The House Committee on Revenue convened on February 6, 2025, to discuss significant legislative measures aimed at addressing estate taxes and their impact on Oregon residents. The meeting highlighted the ongoing concerns regarding the retention of family-owned businesses and the potential exodus of retirees seeking more favorable tax environments in other states.

The committee began by reviewing the $15 million estate tax exemption established in the 2023 session for family-owned farms, woodlands, ranches, and fishery businesses. This legislation was designed to alleviate the financial burden on families wishing to keep their properties within the family upon the death of the owner, provided they had operated the property for at least five years. Feedback from the natural resources community indicated that this measure has positively shifted attitudes, allowing families to focus on stewardship rather than the fear of corporate buyouts.

However, urban representatives raised concerns about rising housing values and the implications for retirement funds. The discussion transitioned to the need for a broader exemption to address these issues. A proposal was introduced for a $7 million exemption across the board, coupled with a reduced estate tax rate of 7%. This approach aims to encourage Oregonians to invest and save while ensuring that family-owned businesses can remain in the state.

The committee also examined the trend of residents relocating to states like Nevada and Idaho, which do not impose estate taxes. This migration has implications for Oregon's income tax revenue, as departing residents no longer contribute to the state's tax base. The proposed legislation seeks to mitigate this loss by providing a more favorable tax structure for those with estates valued under $7 million.

The meeting concluded with a consensus on the importance of creating a predictable tax environment that retains high-income individuals while still generating necessary revenue for the state. The proposed changes aim to strike a balance between supporting family-owned businesses and addressing the financial realities faced by retirees in Oregon. Further discussions and refinements to the proposal are expected in upcoming sessions.