Will North Dakota Democrats Be Dropping Their Opposition To Corporate Tax Relief?

delmore

Over the last several legislative sessions, because the State of North Dakota has been enjoying a tax revenue windfall, various tax relief measures have been debated before the legislature. One area of tax relief that has passed has been reductions in the corporate income tax rate, which Democrats hate.

Democrat Senate Minority Leader Mac Schneider told Great Plains News that he “doesn’t like Dalrymple’s proposal for a $25 million cut in North Dakota’s corporate income tax” because “it will benefit large companies like Wal-Mart that don’t need the help.”

What’s interesting is hearing that argument from Democrats in the context of their proposal to give renters property tax relief. HB1221, introduced by Rep. Louis Delmore, would give all North Dakota renters an income tax credit intended to provide them with property tax relief.

From the bill, which Delmore testified in favor of before the House Finance and Tax Committee today:

A taxpayer is entitled to a credit against tax liability as determined under section 57-38-30.3 equal to five percent of the first seven thousand two hundred dollars of rent paid during the taxable year for the right of occupancy of a residential dwelling in this state occupied as the taxpayer’s primary residence. The claimant of a credit under this section must provide information required by the tax commissioner to verify eligibility for the credit under this section, which may include a statement from the lessor of the amount of rent paid by the lessee for the dwelling during the taxable year. Rental of a dwelling in a nursing home, intermediate care facility, long-term care residential facility, subsidized housing, or dormitory at a higher education institution; a dwelling that is not subject to property taxes; or a dwelling owned by a lessor related by blood or marriage to the lessee or for which the landlord and tenant have not dealt with each other at arm’s length is not eligible for the credit under this section. If a dwelling has more than one occupant renter, only one occupant may claim the credit under this section and how the credit will be apportioned among the occupants is the responsibility of the occupants. A credit under this section may not exceed the taxpayer’s liability under this chapter for the taxable year.

The State of North Dakota has actually tried to implement property tax relief through an income tax credit before. That was Governor John Hoeven’s first stab at property tax relief in 2007, and it was a fiasco. It was a huge complication to the state income tax process, and there’s little doubt that Delmore’s bill would be a similar boondoggle.

There are easier ways to provide tax relief.

That being said, the argument coming from ND Democrats for Delmore’s bill is interesting. They’ve made this bill the centerpiece of their alternative tax agenda. “The taxes that people want cut are property taxes, and that’s where our focus is going to be,” Schneider told the Fargo Forum over the weekend. The press release sent out by Democrats in response to Governor Jack Dalrymple’s State of the State address listed, as an agenda item for this session, “Providing meaningful property tax relief for North Dakota families and small businesses while opposing permanent income tax cuts for out-of-state corporations.”

The Democrats argue that renters pay the property tax because landlords pass that expense on to them through the pricing on rent.

Now, I don’t doubt that’s true, but why isn’t that also true of corporate taxes? Don’t corporations operating in North Dakota also pass along their tax burdens to their customers in the form of pricing?

If it’s true of renters, isn’t it also true of Walmart’s customers?

Something tells me Democrats aren’t about to own up to that bit of hypocrisy.

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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  • John_Wayne_American

    If it were me, I’d
    1) fund schools at 75% of the average cost per student across the state, add up all the spending, divide it by total number of students, perhaps by grade, and pay at 75% demand that those state payments be printed on Property tax bill.

    2) Shift All social services from the county to the state, make them state employees and run the programs from a state level.

    3) Move all the district court cost to the state. pay rent to the counties for office space in the court house, 99% of law in the state is state law not county, the state should provide for the costs of the court system.

    4) figure out how much money is left over and cut individual income tax by that amount. no need for corporate tax changes, they know the price to operate in ND is already a bargain compared to other states.

    5) Require any political sub that takes state money to have a website to show all spending over 5 dollars, they can put salaries in by department, and just black out the names, as the names are not important, but the spending is. I want to see everything from diesel fuel purchases to computer software upgrade checks. Its OUR flipping money, and we want to know were its going,

    • http://sayanythingblog.com Rob

      Good luck getting any of this past the local government lobbyists.

  • somebodysomewhere

    Passing HB1221 will ultimately turn into a vicious circle. If renters get a a portion of the tax relief, the landlords can just up the rent to get the tax relief back .Bottom line, renters are not owed tax relief – if you don’t own property, you don’t get tax relief. End of story.

    • http://sayanythingblog.com Rob

      Exactly, and it makes a mess of the tax code.

  • john dev

    If you want to promote corporates,along with SME than One area of tax relief that has passed has been reductions in the corporate income tax rate, which Democrats hate.A taxpayer is entitled to a credit against tax liability as determined under section 57-38-30.3 equal to five percent of the first seven thousand two hundred dollars of rent paid during the taxable year for the right of occupancy of a residential dwelling in this state occupied as the taxpayer’s primary residence.I was going through defensetax tax relief attorney I found it nice

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