North Dakota House Passes A Half Billion In Income Tax Cuts Almost Unanimously

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After much floor debate, and procedural maneuvering by Assistant Minority Leader Corey Mock to set up a separate vote on the corporate taxes, Rep. Craig Headland’s proposed income tax cuts (HB1250) have passed.

Here’s what the bill does:

The financial institutions tax rate goes from 6.5% to 6%. That’s a $2.4 million cut.

The number of corporation income tax brackets get reduced from three to two, and the bill lowers the top corporate income tax rate from 5.15% to 3.30%. That’s a $140 million tax cut.

The number of individual income tax brackets get reduced from five to three, and rates are lowered to .9% for the lowest tax bracket, 1.9% for the middle bracket, and 2.9% for the top bracket. That’s a $361 million tax cut.

All told, this bill cuts income tax burdens by $503.4 million. The personal income tax cuts passed on a 92-1 vote (Democrat Rep. Steve Zaiser was the lone no vote). The corporate tax cuts passed on a strictly party-line vote.

The question now is, how much will the Senate water these cuts down? A nearly unanimous vote in the House sends a pretty strong message to the Senate, I think.

Later this week the House will vote on $742 million in “property tax relief,” but that’s not real relief. That’s cost shifting from the local to state level. But these income tax reductions are real tax relief.

I’ll have video of the wrangling on the floor later.

Update: Here’s the video of the floor debate:

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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  • Dallas

    Every accountant and coporation in the states has to be laughing tonight. Accountants know people here really don’t pay income taxes, comapred to other states. You make it sound like they’re giving folks a real break. BS! If you wnted to give serious tax relief, provide it by cutting the sales tax (the most regressive tax we have) or cut property taxes. Income taxes, they’re a joke for North Dakota resdidents but are a big help to people and coporations from places like Bentonville, Arkansas.

    • http://sayanythingblog.com Rob

      You make it sound like they’re giving folks a real break. BS!

      So, that half-billion dollar figure is just made up?

      I’m pretty sure accountants would be laughing at you.

    • jimmypop

      youre kidding right? there are no shortage of places with zero income tax…..

      and ive been saying a sales tax cut is the other route for years.

      • http://sayanythingblog.com Rob

        The sales tax is pretty low on my list. I don’t mind taxing consumption all that much.

        I really hate taxing property and wealth creation.

        • camsaure

          I have to agree with you on that, I think a sales tax is a lot more fair tax then income tax.

      • Rick Olson

        While most states add their own income tax onto the federal income tax, a few do not. As of 2009, seven states — Alaska, Nevada, South Dakota, Washington, Texas, Wyoming, and Florida — do not charge an income tax.

        Two other states, New Hampshire and Tennessee, tax only dividend and interest income. Each state’s officials have the right to implement an income tax at their own discretion.

        Some states charge income tax on businesses but not individuals, or vice versa. The amount of income tax charged varies from state to state.

  • Rick Olson

    Maybe there’s hope for Kevin Flanagan yet!! ROTFL!! (The guy who claims he pays more in state taxes than he does federal taxes — yet when challenged to prove this preposterous claim — he staunchly refuses).

    • http://nofreelunch.areavoices.com/ Kevin Flanagan

      You know where I live, Rick. I’ll be happy to show you the tax records. Cory Fong and his buddy Nathan Bergman already confirmed I paid 5 times more in state income taxes than federal income taxes.

      • 5x? yah right…

        Lol you’re hilarious and pretty much proving Rick’s point. Liar.

        • http://nofreelunch.areavoices.com/ Kevin Flanagan

          Prove me wrong, state payroll slacker.

      • Rick Olson

        It sounds like you should probably pull up stakes and move to a more tax friendly state. I’m sure South Dakota would love to have you and your family. I have no business examining your personal records, nor any desire to do so.

        • http://nofreelunch.areavoices.com/ Kevin Flanagan

          I’ve been here 20 years, in 2007 I had a zero state income tax liability.

        • http://flamemeister.com flamemeister

          I paid $700 more in state income taxes than federal. There is no real mystery to this. It depends on your sources of income and the state and federal tax regs relating to them.

          • http://nofreelunch.areavoices.com/ Kevin Flanagan

            Yet, Jim Kasper and Kathy Hawken seem to be quite mystified by it.

          • http://flamemeister.com flamemeister

            They opine with all the confidence that the truly ignorant have.

  • borborygmi

    Oh woe for Kevin F. Nothing left to &itch about. Another reason not to get out of bed. His life will have a void.

    • http://nofreelunch.areavoices.com/ Kevin Flanagan

      It’s a good thing you collect a government check for the rest of your life.

  • nimrod

    Maybe we can eliminate state income tax next session. It is strange how we try to be like Minnesota with tax policy instead of South Dakota (no income tax) or Montana (no sales tax).

    • http://sayanythingblog.com Rob

      Heaven forbid we lop a leg off the “three legged stool.”

      • nimrod

        I pay income tax, property tax, sales tax, extraction tax, gas tax, grain checkoff tax, motor vehicle fees, and hunting/fishing fees. So I think the stool has close to six legs, and will stand quite well with one less.

    • Lynn Bergman

      Minnesota is focusing on expanding the sales tax to services and destroying any potential for copper or frac sand mining from creating any lasting prosperity there.

      Montana is Montana; walk into the Montana Dept. of Environmental Quality and its like walking back to the late nineteen sixties, hippies, bra burners et al. Not smart of Montana to have eliminated the sales tax, the only fair tax there is; lower, maybe… eliminate, ignorant.

      We need to eliminate the income tax and the property tax. It would have been smarter to completely elimimate the income tax due to savings from the associated re-assignment and/or attrition of the support staff in the tax department. That said, I’ll take a major income tax cut, a one-time oil tax reduction from 11.5% to 9.5%, and studies toward eliminating property tax and removing federal funding and influence from North Dakota in all areas except social security and medicare.

      This session is a taking real steps in the right direction. Why would a Republican vote to tax water? We will hold more RINOs accountable in the 2014 primaries.

  • Rick Olson

    I’m glad to see that Flamemeister and Kevin are doing so nicely. They must have particularly unusual income tax situations than the average taxpayer like myself does. Hopefully, the income tax reductions that are included in this bill will pass in the Senate, having passed in the House, and be signed into law by the governor.

    • http://nofreelunch.areavoices.com/ Kevin Flanagan

      Like most people in Fargo, you rent an apartment. ND entwined income with property taxes in order to mask the obscenely high property taxes.

    • http://flamemeister.com flamemeister

      I am confident from your comments that there are many tax situations that you would find unusual, yet they are quite common.

  • Ray Seltz

    What part of “property tax relief” don’t these folks get?

    • http://sayanythingblog.com Rob

      The legislature will be considering Governor Dalrymple’s $742 “property tax relief’ bill today, but it’s not really tax relief.

      We have got to stop asking the legislature for property tax relief. They don’t levy the tax. It’s not their problem. The only thing we get from them is bailouts of the local governments.

  • Mark

    Blah blah blah
    Ok cut taxes oil production goes down spending goes up or stays flat
    Where are you going to get the money

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