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83rd OREGON LEGISLATIVE ASSEMBLY--2025 Regular Session
Enrolled
Senate Bill 485
Sponsored by Senators SMITH DB, MEEK, Representatives EDWARDS, OSBORNE; Senator
HAYDEN, Representatives DIEHL, HARBICK, LEVY B, MANNIX, RESCHKE, SCHARF (Pre-
session filed.)
CHAPTER .................................................
AN ACT
Relating to estate tax; creating new provisions; amending ORS 118.145; and prescribing an effective
date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 118.145 is amended to read:
118.145. (1) As used in this section:
(a) “Family member” means a person within the third degree of relation, by blood, marriage,
adoption, civil union or domestic partnership, to another person.
(b) “Materially participate” means to engage in the active management, as defined in section
2032A of the Internal Revenue Code, of a farm business, forestry business or fishing business owned
by the decedent on the date of the decedent’s death. The Department of Revenue may adopt rules
to administer this section consistent with this definition.
(c) “Natural resource property” has the meaning given that term in ORS 118.140.
(d) “Small forestland owner” means a decedent who owns, throughout the five years
immediately prior to the date of the decedent’s death, forestland that is at least 10 acres but
fewer than 5,000 acres.
(2) Except as provided in subsection (3) of this section, an interest in natural resource
property is exempt from the tax imposed under this chapter if:
(a) The property is held by a decedent for at least five years before the death of the decedent;
(b) During at least 75 percent of the days of each of the five calendar years immediately prior
to date of the decedent’s death, the decedent or any family member of the decedent materially par-
ticipates in the farm business, forestry business or fishing business;
(c) The interest is transferred, as a consequence of the decedent’s death, to one or more family
members of the decedent and is subsequently owned by family members of the decedent for at least
five consecutive calendar years beginning with the calendar year immediately following the date of
the decedent’s death; and
(d) During at least 75 percent of the days of each of the five calendar years immediately fol-
lowing the date of the decedent’s death, any family member of the decedent materially participates
in the farm business, forestry business or fishing business.
(3) An interest in natural resource property that is forestland is exempt from the tax
imposed under this chapter if:
(a) The decedent is a small forestland owner;
Enrolled Senate Bill 485 (SB 485-A) Page 1
(b) The forestland property is held by the decedent for at least five years immediately
prior to the date of the decedent’s death;
(c) During the five calendar years immediately prior to the date of the decedent’s death,
the decedent or any family member of the decedent actively manages the forestland property
and maintains documentation of activities that are appropriate or customary silvicultural
or management activities given the current phase in the forest management cycle for a
parcel of forestland property;
(d) The interest is transferred, as a consequence of the decedent’s death, to one or more
family members of the decedent and is subsequently owned by family members of the
decedent for at least five consecutive calendar years beginning with the calendar year im-
mediately following the date of the decedent’s death; and
(e) During the five calendar years immediately following the date of the decedent’s death,
any family member of the decedent actively manages the forestland property and maintains
documentation of activities that are appropriate or customary silvicultural or management
activities given the current phase in the forest management cycle for a parcel of forestland
property.
[(3)] (4) An additional tax under ORS 118.005 to 118.540 shall be imposed if:
(a) The natural resource property for which an exemption is allowed under this section is, dur-
ing the five calendar years following the date of the decedent’s death, subsequently sold or other-
wise transferred to a person other than a family member of the decedent; or
(b) The material participation requirement of subsection (2)(d) or (3)(e) of this section is not
met.
[(4)] (5) The additional liability imposed under subsection [ (3)] (4) of this section shall be the
amount of additional tax that would have been imposed had the transferred property been included
in the decedent’s taxable estate. Upon receiving notice of a subsequent sale or other transfer of
property for which an exemption has been claimed, or upon receiving notice that the material par-
ticipation requirement of subsection (2)(d) or (3)(e) of this section has not been met, the department
shall immediately proceed to collect the additional tax.
[(5)] (6) An estate claiming the exemption under this section may not claim the credit allowed
under ORS 118.140.
[(6)] (7) The exemption allowed under this section may not exceed $15 million for the estate.
SECTION 2. The amendments to ORS 118.145 by section 1 of this 2025 Act apply to es-
tates of decedents who die on or after January 1, 2026.
SECTION 3. This 2025 Act takes effect on the 91st day after the date on which the 2025
regular session of the Eighty-third Legislative Assembly adjourns sine die.
Enrolled Senate Bill 485 (SB 485-A) Page 2
Passed by Senate May 20, 2025
..................................................................................
Obadiah Rutledge, Secretary of Senate
..................................................................................
Rob Wagner, President of Senate
Passed by House June 19, 2025
..................................................................................
Julie Fahey, Speaker of House
Received by Governor:
........................M.,........................................................., 2025
Approved:
........................M.,........................................................., 2025
..................................................................................
Tina Kotek, Governor
Filed in Office of Secretary of State:
........................M.,........................................................., 2025
..................................................................................
Tobias Read, Secretary of State
Enrolled Senate Bill 485 (SB 485-A) Page 3