This bill amends the New Jersey Transfer Inheritance Tax Act to eliminate the transfer inheritance tax for step-grandchildren, aligning their treatment with that of stepchildren and grandchildren. Specifically, it modifies R.S.54:34-2.1 to classify step-grandchildren, defined as the issue of any stepchild of a decedent, as Class A beneficiaries. This classification exempts them from the transfer inheritance tax, which currently imposes a tax rate of 15% on property transfers up to $700,000 and 16% on amounts exceeding that for Class D beneficiaries, which includes step-grandchildren.

The bill aims to rectify the disparity in tax treatment between step-grandchildren and other beneficiaries, such as grandchildren and stepchildren, who are not subject to the transfer inheritance tax. By treating step-grandchildren similarly to these other classes, the legislation seeks to provide equitable tax treatment for all descendants of a decedent. The act is set to take effect on January 1, 2025.