Hoeven Signs Historic $400 Million Tax Relief Package

Press Release

Hoeven Signs Historic $400 Million Tax Relief Package

Plan Includes Property and Income Tax Relief and Reform

Gov. John Hoeven today was joined by legislators to sign Senate Bill 2199, an historic $400 million, broad-based tax relief package for the people of North Dakota.

Joining Hoeven for the news conference were Sen. Majority Leader Bob Stenehjem; House Majority Leader Al Carlson; Sen. Minority Leader Dave O'Connell; Minority Leader Merle Boucher; Senate Finance and Taxation Committee Chair Dwight Cook; House Finance and Taxation Committee Chair Wes Belter; and, in addition to Sens. Cook and O'Connell, bill sponsors Sen. Rich Wardner, Rep. Lee Kaldor, Rep. Dave Monson, Rep. Ken Svedjan; and Rep. Craig Headland. Also in attendance was state Tax Commissioner Cory Fong.

"This historic legislation both reforms and reduces property taxes, and brings us to the long-sought goal of having the state provide 70 percent of the cost of education and reducing the local share to 30 percent," Hoeven said. "In addition, for the first time ever, we've provided a reduction in the income tax rates for taxpayers across the board, both individual and corporate."

The Package includes:

* $295 million in property tax relief, through a reduction of 75 mills in the average property tax rate for homeowners, farmers, ranchers and commercial businesses, and a statewide cap of 110 mills.
* A $90 million reduction in state individual taxes.
* A $10 million reduction in corporate income taxes.
* A separate bill, SB2402, expands the Homestead Tax Credit to $10 million to help reduce the burden of taxes on seniors and people with disabilities who own homes or rent.

"More than a year ago, we proposed a tax relief plan that included a property tax reduction to ease the burden of rising taxes for property owners, as well as an income tax reduction to help stimulate our economy and ensure that all North Dakota taxpayers receive relief," Hoeven said. "Working with legislators, we passed a bill that will reduce local property rates by 75 mills and sets a new statewide cap of 110 mills."

"A real strength of this bill is that it will benefit not only property owners, but anyone who pays taxes, including renters, businesses, farmers and ranchers," said Senate Majority Leader Bob Stenehjem.

"It has always been a priority of our House Caucus to send a chunk of the surplus back to the good people who created it," said House Majority Leader Al Carlson. "SB 2199 accomplishes this, and we're very pleased with the outcome."

"We're proud to have passed real tax relief for hard-working North Dakotans," said Sen. Minority Leader David O'Connell. "Our citizens deserve a break, and we have given them one today."

Property Tax Relief: The bill includes $295 million in aid to schools targeted to property tax mill rate reductions of 75 mills, and caps most schools at 110 mills, a 15 to 18 percent reduction. An additional $295 million is reserved for property tax reductions in the 2011-2013 biennium.

Individual Income Tax Relief: The bill reduces individual rates from 2.1 percent to 1.84 percent in the lowest tax bracket and from 5.54 percent to 4.86 percent in the highest, an overall 12 percent reduction to taxpayers.

Corporate Income Tax Relief: The bill simplifies the tax code by eliminating two of the state's top corporate income tax brackets, reducing the number of brackets from five to three. The lowest rate is reduced from 2.6 percent to 2.1 percent, a 20 percent reduction to help smaller companies, and the top rate is reduced to 6.4 percent.

Tax Relief for Seniors and People with Disabilities: A separate bill, SB2402, expands eligibility and increases funding for the Homestead Tax Credit to $10 million for qualifying seniors who own their homes or rent.

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