$150M in ND Income Tax Cuts Gets SupportLawmakers drafting a bill to cut North Dakota's income taxes said Friday they must now agree on how to split $150 million in reductions between individual and corporate taxpayers.
By: Dale Wetzel, Associated Press
BISMARCK, N.D. (AP) — Lawmakers drafting a bill to cut North Dakota's income taxes said Friday they must now agree on how to split $150 million in reductions between individual and corporate taxpayers.
One plan would reduce personal income taxes by almost $114 million, or 17 percent, while trimming corporate income taxes by $32.7 million, or about 21 percent.
The package also includes a $2.1 million reduction in the state's tax on banks and trust companies, the state Tax Department estimated.
A legislative conference committee of three House members and three senators are attempting to reconcile the two chambers' differing versions of the income tax legislation. The panel is headed by Rep. Wes Belter, R-Fargo, the chairman of the House's Finance and Taxation Committee, while the lead Senate negotiator is Sen. Dwight Cook, R-Mandan, chairman of the Senate tax committee.
After they failed to reach an agreement Friday, lawmakers agreed to meet again Monday.
The House has favored larger individual and corporate tax reductions, approving almost $150 million in permanent cuts, with about $100 million in benefits going to individual income taxpayers.
Senators approved a $111.3 million package with a much smaller corporate benefit of $12.2 million, and specified that the tax reduction would last for only two years.
Negotiators agreed the expiration date on the Senate's income tax cut should be scrapped. Cook said the final package's total value should be close to $150 million, a figure that has been promoted by the North Dakota Taxpayers Association and the state's Chamber of Commerce.
"That is not too bad of a figure to look at, if we can take it up there and do it in a manner where we can justify it and be successful," Cook said.
One conference committee member, Rep. Craig Headland, R-Montpelier, has pushed for a flat 4.9 percent corporate tax rate and exempting the first $75,000 of corporate income from taxes.
A possibility, legislators said, would be to reduce the number of corporate tax brackets from three to two, with the first $75,000 of corporate income paying 2 percent and larger incomes taxed at 4.9 percent.
A proposed income tax break for individuals would trim the top tax rate from 4.86 percent to 4 percent, while reducing the bottom rate from 1.84 percent to 1.53 percent.
Headland said the corporate tax cut is important to help North Dakota match up with South Dakota, which has no corporate income tax.
"A lot of businesses have moved from Minnesota to South Dakota for that very reason," he said. "I think we have to realize our No. 1 competitor is South Dakota."