May 27, 2009
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
|
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 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.
