Prior to the Federal change in the State Death Tax deduction, there were very few States that had a separate Estate or Inheritance Tax. The majority of states merely had a statute saying that if, in paying your Federal Estate Tax, the government gave you a State Death Tax deduction, you were required to pay that deduction to the State. Now that deduction is being eliminated so the States are passing new legislation creating a new and separate Estate and Inheritance Tax that is not tied to the Federal Estate Tax provisions. The States of Oregon and Washington have passed almost identical provisions for the new tax and, in general, whereas a decedent's estate in 2004 would be entitled to $1.5 million as a credit before a Federal tax would kick in, the State is only allowing $850,000 (to be increased to $1 million before the State tax becomes due. To my knowledge, the State of California has not followed suit and currently has no special tax other than the Federal tax deduction amount discussed above. You can see that this would create a situation where an estate of $1.5 million would pay no Federal tax but the States of Oregon and Washington will want a tax of about $64,000.