Proposal to roll back corporate income tax changes rejected by ND lawmakers
BISMARCK—A committee of North Dakota lawmakers declined to roll back recent corporate income tax changes Wednesday, April 19.
Sen. Jim Dotzenrod, D-Wyndmere, proposed a bill amendment to restore the 2015 corporate income tax apportionment formula, which Democrats argued in a news release would generate almost $24 million in the 2017-19 funding cycle. The amendment was proposed during discussion on the bill creating a pilot program for the state takeover of county social services costs, and it was rejected in a 4-2 vote along party lines.
The apportionment formula is used to determine how much of a multistate corporation's income is subject to the North Dakota tax rate, said Sen. Dwight Cook, R-Mandan, chairman of the Finance and Taxation Committee.
Dotzenrod argued the bill on the state takeover of social services costs will result in property tax increases, pointing to a lack of a "hold harmless" provision. The bill eliminates the 12 percent property tax buydown, but suspends county authority to levy for human services.
In a statement, Dotzenrod said "it's only our citizens who are being asked to make sacrifices" during tough budget times and "not big, multi-state corporations."
Cook said the corporate income tax change was "probably one of the best economic development bills that we ever passed." He said it has prompted Microsoft to expand here "because we were penalizing them terribly by ... imposing our tax on a greater share of their income every time they employed more people."
To change that now, Cook said, would be like Lucy pulling the football away from Charlie Brown.
House Finance and Taxation Committee Chairman Rep. Craig Headland, R-Montpelier, took issue with the argument the bill would raise property taxes.
"We don't levy property taxes," he said. "We, in the past, have used our surplus revenues to help property taxpayers with property tax bills. And I don't think there's ever been a time when that was built into perpetuity into the property tax calculation."