Burgum to sign legislation providing $211M in income tax relief
NORTH DAKOTA - Gov. Doug Burgum has said he will sign legislation to provide an estimated $211 million in income tax relief over the next two years by eliminating the state income tax bill for approximately 300,000 North Dakota taxpayers and providing partial relief to another 200,000 taxpayers. The tax relief fulfills a major piece of the governor’s Accelerate ND plan for the Legislature’s special session, which adjourned today.
“This bill is a victory for half a million hardworking North Dakotans, providing them with real, meaningful tax relief for this year and the next,” Burgum said. “We are deeply grateful to Rep. Heinert and the entire Legislature for overwhelmingly approving this tax relief and improving upon our original proposal. Our shared approach of conservative fiscal management has allowed us to put money back into the pockets of North Dakotans who kept working through the pandemic and supported our economic recovery, which benefits us all.”
House Bill 1515 was introduced by Rep. Pat Heinert of Bismarck and originally mirrored the governor’s Accelerate ND income tax proposal. The amended version approved by lawmakers provides an income tax credit of up to $350 per year for resident individual income taxpayers, or $700 per year for individuals filing a married joint return, effective for tax years 2021 and 2022.
“I’m very pleased with the outcome,” Heinert said. “As I said in my floor speech, we need to share the wealth with North Dakotans, and I was pleased to be the prime sponsor of that bill.”
The approved bill will eliminate state income tax liability for approximately 210,000 returns, which represents 300,000 taxpayers when accounting for the two adults who file a married joint return. An additional 140,000 returns will receive a partial reduction, which represents 200,000 taxpayers when accounting for married joint returns, according to State Tax Commissioner Ryan Rauschenberger, who worked with both the governor and Heinert on the tax relief proposals.
“It is always a great policy to provide additional tax relief when possible,” Rauschenberger said. “Taxpayers will begin receiving the benefits of the tax credit when the filing season starts in just a couple months.”
The tax relief will be funded from the state’s $412 million excess general fund balance from the 2019-21 biennium. The Legislature budgeted for an ending fund balance of $710 million, but the actual ending fund balance arrived at $1.12 billion, thanks to conservative budgeting, higher than anticipated Legacy Fund earnings and the strategic use of federal Coronavirus Relief Funds to pay for state expenses during the last biennium.
The bill passed the House 92-0 on Thursday and the Senate 40-7 today.
The Legislature also passed a bill exempting Social Security income from state income tax, becoming the 38th state to do so. The bill, introduced by Sen. David Hogue of Minot, will provide an estimated $14.6 million in savings per biennium to approximately 20,000 North Dakotans.