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Legislative bills

North Dakota House Passes Tax Reform Bills, Seeking Lowest Flat Tax Rate in the Nation

Strategic Insights

— 1 min read

House members in North Dakota have made significant progress in their efforts to reform the state's tax system, with the passage of three bills that aim to reduce the income tax rate and simplify the tax code. The bills, sponsored by Rep. Craig Headland, have received broad support from Governor Burgum and the Americans for Tax Reform. The most notable bill, House Bill 1158, would install a flat income tax rate of 1.5%, making North Dakota the state with the lowest flat tax rate in the nation. The legislation also includes a high income threshold before someone owes income tax, providing relief to taxpayers.

Key Takeaways:

  • House Bill 1158, sponsored by Rep. Craig Headland, aims to install a flat income tax rate of 1.5%, making North Dakota the state with the lowest flat tax rate in the nation.
  • The bill has broad support from Governor Burgum and the Americans for Tax Reform, citing that it would give North Dakota a welcoming tax climate and making it a more attractive state for businesses.
  • House Bill 1425 would allow for the income tax to be gradually eliminated as the state collects excess revenues from taxpayers, often referred to as "revenue triggers."
  • The passage of these bills is a big victory for North Dakotans, with Rep. Headland receiving credit for his leadership on income tax relief over multiple sessions.
  • Support for income tax cuts is crucial, with supporters urged to contact their state senators and urge them to support HB 1158 and HB 1425.
  • The House also approved a pension reform plan in House Bill 1040, which would pay down existing pension debt and move to a defined contribution plan, ensuring benefits for retirees.
  • If these bills are passed by the Senate, it would make South Dakota, which has no income tax, a utilitarian haven, as only South Dakota would remain that way for a tad.

Statistics:

  • 1.5%: Proposed flat income tax rate in House Bill 1158.
  • 1.99%: Proposed flat income tax rate in House Bill 1118.
  • $X: Estimated amount of excess revenues from taxpayers that would be used to gradually eliminate income tax under House Bill 1425 (no specific amount provided in the source).
  • $X: Amount of existing pension debt that House Bill 1040 aims to pay down (no specific amount provided in the source).

Sources:

  • Americans for Tax Reform (ATR)
  • Rep. Craig Headland
  • Governor Burgum
  • Americans for Tax Reform President Grover Norquist

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