Commentary: North Dakotans could enjoy an additional $33.8 million in savings thanks to the Trump tax cuts
I had to laugh a bit when I saw this headline over my colleague John Hageman’s piece about the impact of federal tax reform on state-level revenues.
“ND tax office expects revenue hit from new tax law, but top legislators don’t plan on changes,” is the headline, and while it’s certainly true the Republican-backed tax reform will impact state income tax collections, from another perspective that “hit” turns into a bonus for North Dakota taxpayers.
The reason federal tax law changes impact North Dakota is because our state, like 18 others, aligns parts of our income tax code with the federal government. When the feds make changes to things like deductions they can apply to our state income taxes as well.
Republicans cut taxes at the federal level, and that’s turning into a tax cut at the state level as well.
“In what Tax Commissioner Ryan Rauschenberger said was the most comprehensive breakdown of the new law’s effects, his office estimated the state would lose $4.9 million in the current two-year budget cycle, which ends in mid-2019, and nearly $28.9 million in the 2019-21 biennium,” Hageman reports. “That would represent about a 3.6 percent drop in income tax collections for a full two-year budget cycle.”