OLYMPIA — The state Supreme Court on Thursday unanimously upheld legislative changes to the state’s estate tax law that saved the state millions of dollars in refunds.
The court ruled that the move taken by lawmakers last year to allow retroactive taxes on some estates was constitutional, did not intrude upon judicial power, and that the retroactivity of the changes were not a violation of the estates’ due process rights.
The Legislature’s action was in response to a 2012 ruling by the high court, which determined the estate tax did not apply to married couples who had used a certain type of trust in their estate planning before the 2005 estate law was passed. Thursday’s ruling by that same court was in response to challenges brought by two estates: one that already paid the tax and was seeking a refund, and another that was fighting a tax bill from the state.
The amendment to the estate tax law became a key part of a budget agreement during an overtime legislative session in 2013. At the time, officials said that without a change, the state would have been on the hook for $160 million. That number included more than $92 million in refunds, nearly $5 million in cancellation of assessments that haven’t yet been paid, and $63 million less in future collections through the middle of 2015.
