In recent years the federal estate tax has emerged as a controversial political issue. Opponents of the tax have sought to reduce or eliminate it, arguing in part that it places an unfair burden on family farms and small businesses. Although a number of studies have examined these effects nationwide, few have looked at the effects at the local level, making it difficult for policy makers and advocacy groups to assess the tax’s local effects. In New Mexico in particular, some ranchers have expressed concern about their exposure to the tax. The purpose of this paper therefore, is to determine the extent of that exposure, beginning with an overview of how the tax works, followed by a brief examination of a national study on its effects, and finally, an analysis of its impact on New Mexicans and New Mexican ranchers.