If the bill becomes law, North Dakota's treasury would take a more than $1 billion hit over the next two years, according to state Tax Department analysts.
Residents of oil-rich North Dakota should get a break from paying state income tax this year and next, a Minot lawmaker argued Monday, noting the state already has more than $1 billion budget surplus.
Republican Rep. Scott Louser told the House Finance and Tax Committee that his plan is an attempt to decrease the tax burden on people living in the state with the nation's lowest unemployment rate. The measure would apply to individuals, estates and trusts across North Dakota.
Louser said the idea, which he calls "big, bold, aggressive but also responsible," came from his constituents and has widespread support.
"The state has a surplus — a very large surplus," Louser said. "Let's cut taxes."
If the bill becomes law, North Dakota's treasury would take a more than $1 billion hit over the next two years, according to state Tax Department analysts. The proposal would reinstate the state income tax in 2015.
Republican Gov. Jack Dalrymple already has called for $545 million in tax cuts, including reductions in property taxes and individual and corporate income taxes.
North Dakota Chamber of Commerce spokesman Bill Shalhoob said his business-promoting group opposes Louser's bill, arguing that tax relief could be better found through a combination of tax cuts
"We support lowering taxes," Shalhoob said. "But this is not the right vehicle. There are other places to do it."
Andrea Toman, a stay-at-home mom from Bismarck, told lawmakers that cutting state income taxes for individuals was the most equitable way to ensure that tax cuts help everyone in the state.
"It would be a great benefit," she said, noting that the North Dakota would join seven other state states that have no state income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.
Sandy Clark, a spokeswoman for the North Dakota Taxpayers Association, endorsed the measure. She argued that allowing residents to keep more of their tax dollars would spur retail sales and sales tax revenue.
"When people have more money in their pocket, they're going to spend it," she said.
Deputy Tax Commissioner Ryan Rauschenberger said the agency has 14 employees assigned to state income tax filings. He said those positions could be "repurposed," at least temporarily, to performing audits on state income tax filings for past tax years, or assigned to help out on sales tax filings.