Mazzeo, Schaer, Lampitt & Vainieri Huttle Propose “Holocaust Reparations Tax Exemption Act"

Bill Would Eliminate Inheritance and Estate Taxes on Reparations Received by Holocaust Victims, Survivors and their Descendants

Assembly Democrats Vince Mazzeo, Gary Schaer, Pamela Lampitt and Valerie Vainieri Huttle have introduced the "Holocaust Reparations Tax Exemption Act" to help relieve the tax burden on Holocaust survivors and their descendants.

"The purpose of the bill is to alleviate the tax burden on the restitution payments and distributions received by Holocaust survivors," said Mazzeo (D-Atlantic). "This is a small token of remembrance and compensation for the untold losses that can never fully be recuperated." 

Specifically, the bill (A-4421) would provide an exemption from the transfer inheritance and estate taxes for an amount equal to the value of certain payments and distributions received by Holocaust survivors and their eligible descendants. 

"Many generations fought long and hard for reparations and we should not be taxing their sacrifices at death," said Schaer (D-Bergen/Passaic). "Because many of these benefits have been, and continue to be, passed along to future generations, this bill extends the tax relief to descendants as well."

"For those who were fortunate enough to survive the holocaust, they typically were stripped of most of their earthly possessions, including family heirlooms and treasures," said Lampitt (D-Camden/Burlington). "These things can never be regained but this change can help us continue to honor the victims and pay tribute to their families in some small way."

"This bill was designed to help provide a measure of relief for the victims and survivors of some of the worst crimes in human history," said Vainieri Huttle (D-Bergen). "Hopefully it will also help future generations of their family honor their legacy." 

Under the bill, the restitution payments and distributions that are eligible for the exemption are broadly defined to include any payment or distribution that:

1) is paid to the decedent during the life of the decedent by reason of the decedent's status as an individual who was persecuted by the Nazi regime or by reason of the decedent's status as an eligible descendant of an individual persecuted by the Nazi regime, including any amount paid by a foreign country, the United States of America, or any other foreign or domestic entity, or a fund established by any country or entity, any amount paid as a result of a final resolution of a legal action, and any amount paid under a law providing for payments or restitution of property;

2) constitutes the direct or indirect return of, or compensation or reparation paid to the decedent for, assets stolen, hidden, or otherwise lost to an individual who was persecuted by the Nazi regime before, during, or immediately after World War II or an eligible descendant of a persecuted individual, including any proceeds of insurance under policies issued on persecuted individuals by European insurance companies immediately before and during World War II; or

3) consists of interest that is paid as part of any payment or distribution described above.

The bill defines an eligible descendant of an individual persecuted by the Nazi regime as an individual who is lineally related to a persecuted individual, by blood, affinity, or adoption, and who is not more than two generations removed in descent from the individual who was persecuted.

Under the bill, the value of the eligible restitution payments or distributions is determined based on the value when received. The bill provides that the value of each eligible payment or distribution is determined for purposes of the exemption based upon the clear market value of the payment or distribution on the date the payment or distribution is received by the decedent.

The bill would take effect immediately and the exemption would apply to transfers and estates associated with deaths occurring on or after the 90th day following the date of enactment.

The measure has been referred to the Assembly Budget Committee.