North Dakota Cuts Income Tax; Missouri Considering

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

Married Filing Jointly & Surviving Spouse

North Dakota Corporate Income Tax, 2009

The corporate cut also eliminated two unnecessary brackets, and is estimated to reduce corporate tax collections by $10 million per year. The individual income tax cut is estimated to reduce collections by $90 million per year. Also enacted was property tax 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.