The latest annual report from the non-partisan Tax Foundation ranks North Dakota 29th in the nation in the area of “Business Friendly Tax Policy.” (The full PDF of the report can be found here.)
According to the report, North Dakota’s ranking on Corporate Income Tax rates jumped from 30th to 21st based on the reduction of the top tax bracket from 6.5% to 5.15% and reducing the number of tax brackets from 5 to 3.
On the Personal Income Tax side, which are the rates that S-Corps and LLCs are subject to, the ranking only increased one notch from 36th to 35th based on the top tax rate dropping from 4.86% to 3.99%.
Our rankings for Sales Tax are much better because many states have considerably higher sales taxes than North Dakota. This year, North Dakota ranks 15th for sales tax.
When it comes to property taxes, the rankings are a little less straight-forward because there are several ways to compare property taxes due to the fact every state (and every county in some states) has a slightly different way of doing things. When you look at the map of property tax rates around the country, North Dakota is somewhere in the “average range”.
This report should be an eye-opener for taxpayers and lawmakers.
Despite our state’s windfall from oil tax profits, our state is having trouble capitalizing on the fact that no other state is in the position to dramatically reduce and reform its tax code like North Dakota is.
We have made gains over the last two legislative sessions when it comes to reducing income tax rates, and the legislature does deserve credit for that part.
But it would be a shame for the state to not take advantage of the fact that North Dakota hit the economic lottery.
29th place is simply not good enough.
Dustin Gawrylow is the executive director of the North Dakota Taxpayer’s Association.