North Dakota Senate says ‘no’ to income tax breaks

(The Center Square) – The North Dakota Senate defeated a bill to implement income tax breaks in the 2024 tax year.

House Bill 1549 would have increased the income threshold for the zero percent tax bracket from $44,725 to $60,000 for single filers and from $74,570 to $100,000 for married filing jointly. That would increase the number of North Dakotans not paying income tax from 60% to 72%, Tax Commissioner Brian Kroshus told the Joint Appropriations Committee on Tuesday.

The state ended fiscal year 2023 with $288 million over the forecast in April. North Dakota Gov. Doug Burgum told lawmakers Monday that there was plenty of money to fund the tax break.

The appropriations committee sent the bill to the House and Senate floor without a committee recommendation after some members debated whether other forms of tax relief, including property and sales taxes, would do more to help taxpayers.

“I think we’re missing the boat on not looking at sales tax and some of these other things that could make a bigger impact,” said Rep. David Munson, R-Osnabrock, during the appropriations committee meeting.

Lawmakers supporting the bill said reducing the income tax would keep people from moving out of the state to states with no income tax. The state’s southern neighbor, South Dakota, does not tax income.

Sen. Ryan Braunberger, D-Fargo, who voted against the bill, said claims that people move from state to state because of high-income taxes are not true.

“Income tax is just a minor portion of that determination,” Braunberger said. “It’s also about where there human rights are going to be respected. It’s also where their families live. It’s also where they are going to feel the most comfortable. So this idea that just by lowering income taxes it’s going to draw people to North Dakota is not true.”

Burgum said it was a “working family tax relief misopportunity.”

“Literally, it’s ($46 million) less than two week’s revenue we’re bringing into the state right now, probably closer to one week during some during some weeks,” Burgum said. “There are 104 weeks in a biennium, and with a couple billion in cash lying around, if we can’t figure out how to give one week’s of revenue back to the citizens of North Dakota, I guess I will just have to say extreme disappointment on behalf of the citizens that we couldn’t find our way.”