Pennsylvania Inheritance Tax on Non-Resident Beneficiary

[patman2]

My question involves estate proceedings in the state of: Pennsylvania

Pennsylvania has an inheritance tax instead of an estate tax. If the assets of Pennsylvania resident decedent (all financial assets) pass via Pay on Death and Transfer on Death accounts and no inheritance taxes are withheld, what process will Pennsylvania use to collect the inheritance tax from out-of-state beneficiaries? Do they have a legal right to collect from non-residents?

[harrylime]

The institutions holding the funds might require an inheritance tax waiver before releasing the funds. The inheritance tax waiver is "an inheritance tax return will be prepared" or "an inheritance tax return will not be prepared, please send me a bill."

Even if the funds are released, the institutions will likely report the transfer to the DOR/Register of Wills, who will then give you the opportunity to pay.

Yes, they have the legal right.

[patman2]

Even if the funds are released, the institutions will likely report the transfer to the DOR/Register of Wills, who will then give you the opportunity to pay. Yes, they have the legal right.

This reminds me of the whole Source Tax controversy where states such as California and New York were agressively pursuing out-of-staters for tax on their retirement income under the justification that they had been residents of the state at one time. A 1996 law put a stop to that. I still don't understand how a state has any right to collect inheritance tax from a non-resident. If Pennsylvania wants to be sure to get their pound of flesh, they should institute an estate tax rather than an inheritance tax. Practically speaking, how do they go about collecting from non-residents?