Meanings
nounsponge tax (plural sponge taxes)
plural sponge taxes
- UShistoricallawAn estate tax imposed by a state that was credited against the federal estate tax, raising revenue for a state without increasing the overall tax burden.
1 more example
Following various versions of the Massachusetts estate tax in response to the changes in the Internal Revenue Code, in 2002, the Legislature amended § 2A to use a "sponge tax" calculation based upon the Federal credit for State death taxes that would have been allowable to a decedent's estate in 2000.
2020, Elspeth B. Cypher writing for the Supreme Judicial Court of Massachusetts in Shaffer v. Commissioner of Revenue, case number SJC 12812https://www.mass.gov/files/documents/2020/07/10/q12812.pdf
Cite this entry
APA
sponge tax. (n.d.). In WatkinsX Dictionary. Retrieved November 4, 2026, from https://dictionary.watkinsx.com/word/sponge%20tax
MLA
“sponge tax.” WatkinsX Dictionary, https://dictionary.watkinsx.com/word/sponge%20tax. Accessed November 4, 2026.
Chicago
WatkinsX Dictionary, s.v. “sponge tax,” accessed November 4, 2026, https://dictionary.watkinsx.com/word/sponge%20tax.
Source: sponge tax on Wiktionary, CC BY-SA 4.0.