Last year, we noted that North Dakota was one of the few states with a structural budget surplus, thanks to flush revenues from the personal and corporate income taxes. In November 2008, a ballot initiative to cut these rates did not pass, partly because of concerns about whether it would interfere with a separate push to cut property taxes. Now, however, Gov. John Hoeven has approved a much more modest cut in the two taxes, retroactive to January 1, 2009:
North Dakota Individual Income Tax, 2009
Single Person
|
Income Bracket |
Pre-Cut Rate |
Post-Cut Rate |
|
>$0 |
2.10% |
1.84% |
|
>$33,950 |
3.92% |
3.44% |
|
>$82,250 |
4.34% |
3.81% |
|
>$171,550 |
5.04% |
4.42% |
|
>$372,950 |
5.54% |
4.86% |
Married Filing Jointly & Surviving Spouse
|
Income Bracket |
Pre-Cut Rate |
Post-Cut Rate |
|
>$0 |
2.10% |
1.84% |
|
>$56,750 |
3.92% |
3.44% |
|
>$137,050 |
4.34% |
3.81% |
|
>$208,850 |
5.04% |
4.42% |
|
>$372,950 |
5.54% |
4.86% |
North Dakota Corporate Income Tax, 2009
|
Bracket |
Post-Cut Rate |
|
>$0 |
2.10% |
|
>$25,000 |
5.25% |
|
>$50,000 |
6.40% |
The corporate cut also eliminated two unnecessary brackets, and is estimated to reduce corporate taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. collections by $10 million per year. The individual income taxAn individual income tax (or personal income tax) is levied on the wages, salaries, investments, or other forms of income an individual or household earns. The U.S. imposes a progressive income tax where rates increase with income. The Federal Income Tax was established in 1913 with the ratification of the 16th Amendment. Though barely 100 years old, individual income taxes are the largest source of tax revenue in the U.S. cut is estimated to reduce collections by $90 million per year. Also enacted was property taxA property tax is primarily levied on immovable property like land and buildings, as well as on tangible personal property that is movable, like vehicles and equipment. Property taxes are the single largest source of state and local revenue in the U.S. and help fund schools, roads, police, and other services. relief imposing a statewide rate cap and mandating reductions to be backfilled by state funds. $295 million has been reserved for the purpose for 2011-13.
Missouri’s House of Representatives on April 30 also passed a bill to cut each individual income tax bracket by 0.5 percentage points, retroactive to January 1, 2009. The bill has not yet been voted on by the State Senate.
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