A top priority for North Dakota House members, Governor Burgum, and certainly the state’s taxpayers, has passed the House of Representatives: tax reform.
Multiple pieces of legislation passed this week as House members plugged away, voting on legislation ahead of the legislature’s crossover date.
The headline bill for North Dakota taxpayers is House Bill 1158, which would install a flat income tax rate of 1.5%, and set a relatively high income threshold before someone owes income tax at all. The bill, sponsored by Rep. Craig Headland, has broad support, including from Governor Burgum and Americans for Tax Reform.
This legislation would give North Dakota the lowest flat tax rate in the nation.
Not content with that potential distinction, the House also approved House Bill 1425, which would allow for the income tax to be gradually eliminated as the state collects excess revenues from taxpayers.
This approach, often referred to as “revenue triggers,” puts taxpayers first. Rather than the state taking in too much money and then spending that money to grow government, the tax burden is permanently reduced.
Also passed in this flurry of activity, the House approved HB 1118. This legislation would set the state income tax rate at a flat 1.99%, along with new income tax credits.
The passage of these bills are all big victories for North Dakotans. Rep. Headland deserves immense credit for his leadership on income tax relief over multiple sessions. Still, there remains much work to be done before the Senate votes. Supporters of income tax cuts should make sure to contact their state senators and urge them to support HB 1158 and HB 1425.
Also of note, the House approved a much-needed pension reform plan in House Bill 1040. The bill would pay down existing pension debt, and move to a defined contribution plan, ensuring benefits are there in the future for retirees. Without reform, the system is at risk, and taxpayers would likely be forced to pay to cover unfunded liabilities. This is another important issue the House is leading on.
Americans for Tax Reform President Grover Norquist testified in support of income tax reform in North Dakota last month, saying, “This would give North Dakota the lowest flat tax of any state in the nation, making the state tax climate one of the most welcoming in the country. Though the state would remain behind the no-income-tax states, including neighboring South Dakota – at least for now.”
If these bills are passed by the Senate, South Dakota won’t have much more time as the no tax Dakota.
Here are all the members who voted yes for HB 1158:
YEAS: Anderson, B.; Anderson, D.; Anderson, K.; Bahl; Bellew; Beltz; Bosch; Brandenburg; Christensen; Christy; Cory; Dockter; Dyk; Fegley; Fisher; Frelich; Grueneich; Hagert; Hatlestad; Hauck; Headland; Heilman; Heinert; Henderson; Holle; Hoverson; Johnson, J.; Jonas; Karls; Kempenich; Kiefert; Klemin; Koppelman; Kreidt; Lefor; Longmuir; Louser; Marschall; Martinson; McLeod; Meier; Monson; Motschenbacher; Nathe; Nelson; Novak; O’Brien; Olson, J.; Olson, S.; Ostlie; Porter; Prichard; Pyle; Richter; Rios; Roers Jones; Rohr; Ruby, D.; Ruby, M.; Sanford; Satrom; Schatz; Schauer; Schobinger; Schreiber-Beck; Steiner; Stemen; Strinden; Thomas; Timmons; Toman; Tveit; VanWinkle; Vetter; Vigesaa; Wagner; Warrey; Weisz; Speaker Johnson, D.
By Farragutful – Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=119104871