When someone passes away, the federal government may impose an estate tax based on the total value of everything that person owned at the time of their death. This tax is paid by the estate before assets are distributed to heirs.
But did you know that some states have their own version of this tax? In addition to the federal estate tax, several states impose state-level estate or inheritance taxes—often referred to collectively as “death taxes.” These state taxes can significantly impact how much of your legacy ultimately passes to your loved ones, making it essential to understand how they work and whether they might apply to you.
Which States Collect a Death Tax?
As of 2025, the following states impose a state estate tax:
Connecticut, District of Columbia, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, and Washington.
The following states impose an inheritance tax:
Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania.
Notably, Maryland is the only state that levies both an estate tax and an inheritance tax.
Keep in mind that these laws change over time. It’s important to consult with a qualified estate planning professional to ensure you have the most up-to-date information before making decisions that affect your estate or your heirs.
Understanding How State Death Taxes Work
Every state sets its own rules about how much of an estate is exempt from taxation, what deductions are available, and what tax rates apply. In general, a state death tax applies if:
- The deceased person lived in that state, or
- The deceased owned real estate or tangible personal property located in that state at the time of death.
Even if you live in a state without a death tax, owning property in a state that does could still create tax exposure.
State Death Tax Examples
To better understand how these laws work, let’s look at a few examples that show when an estate—or the person inheriting—might be subject to state-level death taxes.
1. Deceased Person Resided in New York
Imagine your uncle passed away and left you his entire estate. If he lived in New York at the time of his death, his estate could be subject to a state-level estate tax, since New York imposes its own estate tax in addition to the federal one.
Whether his estate actually owes New York estate taxes would depend on the total value of his estate and the available deductions and exemptions under New York law.
Would you, as the inheritor, owe an inheritance tax? No—New York does not impose an inheritance tax.
2. Deceased Person Lived in Florida
If your uncle lived in Florida and owned no property in New York (or any other state that imposes an estate tax), his estate would not be subject to any state-level estate tax because Florida has none.
However, his estate might still owe federal estate taxes, which apply regardless of state residency. You, as the inheritor, would not owe any inheritance tax because Florida also does not impose one.
3. Deceased Person Lived in Florida; You Live in New York
Suppose your uncle lived and owned property only in Florida, but you live in New York. His estate would not be subject to a state-level estate tax because Florida has none, and he had no property in New York.
Even though you live in New York, you would not owe inheritance tax, as neither state imposes one.
4. Florida Resident-Owned Property in New York; You Live in New York
Now imagine your uncle was a Florida resident but owned a second home in New York. In this situation, his estate could be subject to New York estate tax, but only on the value of his New York property, since that property is located within the state.
You, as the inheritor, still would not owe an inheritance tax, as neither Florida nor New York imposes one.
5. Deceased Person Lived in Kentucky; You Live in Florida
Suppose your aunt lived in Kentucky and you live in Florida. Because Kentucky no longer imposes an estate tax, her estate would not owe any state-level estate tax.
However, Kentucky does have an inheritance tax, which means you—as the inheritor—might owe taxes on what you receive (if it exceeds the applicable exemption), even though you live in Florida, a state without such a tax.
6. Note for Snowbirds
Consider John, who lives in Connecticut for six months and in Florida for the other six. His official residence is Connecticut. Because the state of residency determines which estate tax laws apply, Connecticut will treat John as a resident for estate tax purposes.
When John passes away, his entire estate, including his Florida home, will be subject to Connecticut’s estate tax because it is considered part of his overall estate as a Connecticut resident.
The Bottom Line
As these examples show, state death taxes can be complex and may apply in ways that are not immediately obvious. Factors such as where you live, where you own property, and where your beneficiaries reside can all influence whether your estate—or your loved ones—will owe additional taxes.
If you live in or own property in a state with an estate or inheritance tax, now is the time to review your estate plan. Working with an experienced estate planning attorney can help ensure that your plan accounts for potential tax exposure and preserves as much of your legacy as possible for the people you love.
