sponge tax

Noun

 * 1)  An 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.
 * 2) * 2020, Elspeth B. Cypher writing for the Supreme Judicial Court of Massachusetts in Shaffer v. Commissioner of Revenue, case number SJC 12812:
 * 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.