What happened to Kansas inheritance-tax liability for pre-July 1998 estates that had not filed a return by July 1, 2008?

Plain-English summary

Kansas inheritance tax historically applied to estates of people who died before July 1, 1998. A separate Kansas estate tax replaced it for decedents dying on or after that date, but K.S.A. 79-15,119 had allowed the old inheritance tax to continue because the limitations period did not begin until a return was filed.

The Legislature set a final cutoff. If an inheritance-tax return for a pre-July 1998 decedent was not filed before July 1, 2008, no inheritance-tax liability accrued to the estate or its distributees. The running of the limitations period also released the state's lien from estate property.

With the exception of matters already pending before the Department, the inheritance tax ended July 1, 2008. The Department said it would not process inheritance-tax returns submitted after that date and would not issue a closing letter or certificate of nontaxability. Real-property title and probate could instead be cleared by reference to the statutes identified in the notice, including K.S.A. 59-2251.

The notice expressly distinguished the inheritance tax from the Kansas estate tax, which continued to apply to estates of decedents dying on or after July 1, 1998.

What this means for you

Estates of pre-July 1998 decedents

If no Kansas inheritance-tax return was filed before July 1, 2008, the notice says neither the estate nor distributees owed the inheritance tax, subject to the exception for matters already pending with the Department.

Probate and title professionals

After the cutoff, the Department would not issue a closing letter or certificate of nontaxability. The notice directs practitioners to the cited statutes to clear real-property title and close probate.

Common questions

Q: Did Kansas end all death taxes on July 1, 2008?
A: No. The notice ended the old inheritance tax, while stating that the separate estate tax for decedents dying on or after July 1, 1998 continued.

Q: What if a pre-1998 estate never filed an inheritance-tax return by the deadline?
A: No liability accrued to the estate or distributees, and the state's lien was released by the limitations period.

Q: Would the Department process a late return after July 1, 2008?
A: No. It also would not issue a closing letter or certificate of nontaxability.

Q: Was there an exception?
A: Yes. The notice preserved matters already pending before the Department of Revenue.

Citations and references

• K.S.A. 79-15,119 — inheritance-tax return cutoff and no-liability rule.
• K.S.A. 79-15,251 — continued the application of K.S.A. 79-15,119 for specified estates.
• K.S.A. 59-2251 — probate-closing provision cited by the notice.

Subject

Kansas Inheritance Tax Ends on July 1, 2008

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: Notice 08-01

Original ruling text

Notice
Notice Number: 08-01
Tax Type: Inheritance Tax
Brief Description: Kansas Inheritance Tax Ends on July 1, 2008
Keywords:
Approval Date: 05/07/2008

Body:
KANSAS DEPARTMENT OF REVENUE
OFFICE OF POLICY & RESEARCH

                                                  Notice 08-01

                                Kansas Inheritance Tax Ends On July 1, 2008

The Kansas inheritance tax applies to the estates of decedents dying before July 1, 1998. The Kansas estate tax,
which applies to the estates of decedents dying on or after July 1, 1998, continues in effect.
For many years, Kansas had an inheritance tax. As a general rule, estates of persons who died before July 1, 1998
were subject to the inheritance tax.

In 1998 the inheritance tax was replaced with an estate tax that applies to the estates of decedents dying on or after
July 1, 1998. When the Kansas estate tax was enacted, however, it contained a provision, K.S.A. 79-15,119, which
specifically provided for the continuation of the inheritance tax. Because of this provision, and because the statute of
limitations for the Kansas inheritance tax did not begin to run until an inheritance tax return was filed, the inheritance
tax continued to apply to estates of persons who died before July 1, 1998.

In 2001 the Kansas Legislature amended K.S.A. 79-15,119 to include language which ends the inheritance tax on July
1, 2008. The statute provides:

      79-15,119. Same; application of act. The provisions of K.S.A. 2001 Supp. 79-15,100 through 79-15,119,
      and amendments thereto, shall be applicable to the estates of all decedents dying after June 30, 1998. The
      provisions of article 15 of chapter 79 of the Kansas Statute Annotated in effect immediately before the
      effective date of the Kansas estate tax act shall be applicable to the estates of all decedents dying before
      July 1, 1998, for which an inheritance tax return was filed before July 1, 2008. In the event any such
      inheritance tax return is not filed with the director before July 1, 2008, no liability which may have been
      imposed if the return was so filed by such date shall accrue to either the estate or the distributees of the
      estate.
 In 2006 the Kansas Legislature enacted a new estate tax law. As part of that law they provided, in K.S.A. 79-
 15,251, that the provisions of K.S.A. 79-15,119 would continue to apply for estates of decedents dying before
 January 1, 2007. As a result, the inheritance tax sunset provision found in K.S.A. 79-15,119 continues in effect.

 As noted in K.S.A. 79-15,119, if an inheritance tax return has not been filed by July 1, 2008 for the estate of a
 decedent dying before July 1, 1998 neither the estate nor any distributee of the estate is liable for inheritance tax.
 In addition, the running of the statute of limitations serves to release the state’s lien from any property
 considered to be an asset of the decedent’s estate. As a result, with the exception of matters currently
 pending before the Department of Revenue, the Kansas inheritance tax ends July 1, 2008.

 In light of the fact that no tax is or will be due from estates of decedents dying before July 1, 1998, the
 Department of Revenue will not process any inheritance tax returns submitted after July 1, 2008, nor will
 we issue a Closing Letter or Certificate of Nontaxability. It should be possible for you to clear title to any real
 property included in the estate by making reference to the statutes cited above. Probate proceedings may be
 closed by reference to these statutes, and in accordance with the provisions of K.S.A. 59-2251.
                                                 Taxpayer Assistance

Page 2

 Additional copies of this notice, forms or publications are available from our web site, www.ksrevenue.org. If
 you have questions about inheritance tax, please contact:
                                             Taxpayer Assistance Center
                                          Kansas Department of Revenue
                                           915 SW Harrison St., 1st Floor
                                              Topeka, KS 66612-1588
                                                Phone: 785-368-8222
                                                  Fax: 785-296-4993

Date Composed: 05/07/2008 Date Modified: 05/07/2008

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