Effective June 30, 2013, for any amounts gifts over a $1,000,000 exemption gifted during lifetime, Minnesota residents will pay a flat tax of 10%.
Some other changes that may become important as other states look for ways to raise revenues:
Due to these changes, Minnesota Estate tax returns are now required if the sum of the federal gross estate including federal adjusted taxable gifts within 3 years of death exceed $1,000,000. While there will be a credit for prior gift tax paid to Minnesota, whether or not there is additional estate tax will depend on the value of the decedent’s taxable estate (which includes the prior taxable gifts).
While this does not affect any of my clients and DC, Virginia and Maryland do not have a gift tax or 3 year look back for prior taxable gifts, this change is important because it may signify a trend in future changes in the gift and estate tax laws of other states.