There are a ton of tax proposals being considered by the North Dakota legislature this session. From property taxes to the income tax, there are a lot of ideas floating around about how to give taxpayers at least some of their money back out of the windfall in revenues the state government is enjoying.
Today the House Finance and Tax committee will hear one of the simplest proposals. HB1394, introduced by Rep. Rick Becker, would simply change the state’s sales tax rate from 5% to 4%.
Just to give you an idea of where we’re at with the sales tax, according to the latest numbers from the Office of Management and Budget (see below), in the month of December sales tax revenues exceeded forecasts by 88%, or about $44.7 million. In the current biennium to date, sales tax revenues have exceeded legislative forecasts by 59%, or $615.4 million.
If we’d had a 4% state sales tax rate instead of a 5% sales tax rate, and if we assumed that the lower tax rate didn’t inspire more commerce (lowering the tax rate is obviously going to encourage additional sales) biennium to date we’d probably have exceeded our sales tax projection by only $283.78 million.
That would mean, if we had reduced the sales tax for this biennium, we still would have received every single dollar the state projected and budgeted for but roughly a quarter-billion dollars or so more.
I think this is definitely a tax we could reduce, saving everyone in the state who buys things a significant amount of money. Here’s the contact list for the House Finance and Tax Committee. It might be worth letting them know what you think.