Fong presser update

Here’s what the Tax Commissioner’s Office just released in regard to the news conference they had this morning. I was unable to go due to my work on another project. The AP should have a story soon.

Fong Working with Legislators in Response to Federal Tax Increases   BISMARCK, N.D. – Tax Commissioner Cory Fong announced today that he is working with state legislators on legislation to address the anticipated impact of the expiration of the Bush tax cuts. 

“We are preparing to introduce legislation during the 2011 legislative session to ensure North Dakota taxpayers are not subject to additional state income taxes that would result if certain provisions of the Bush tax cuts expire,” said Fong.

Currently, the standard deduction for married filers who file a joint return is twice that of the standard deduction for single filers, which creates parity between the two filing statuses.  This provision, which eliminated some of the penalty associated with filing a married joint return, is set to expire unless Congress takes action to extend it. 

Should it expire, the standard deduction for married filers would once again penalize married filers who file a joint return.

“We’ve worked tirelessly in the last two legislative sessions to provide meaningful and substantive tax relief to our citizens, reducing the burden on our North Dakota families, businesses, and farmers and ranchers,” said Fong.  “This is not the time to sit back and allow North Dakotans to be taxed any more just because of the action, or inaction, of Congress.”

According to Tax Department analysis, once the standard deduction provision for married filers expires, more than 83,000 North Dakota taxpayers would see an increase in their federal taxable income.  The result would be an increase in their federal and state income taxes.

“The legislation we are working on aims to protect North Dakota taxpayers from paying more into the state coffers because of Washington’s actions,” said Representative Mike Nathe of Bismarck.

Senator Dwight Cook, Mandan, and Representative Wes Belter, Cass County, Chairmen of the Senate and House Finance and Taxation Committees, added that this legislation could also serve as a vehicle for other possible legislative changes that may be necessary to ensure that North Dakota taxpayers do not see increases in their state income taxes resulting from Congressional actions.

“There may be other legislative changes to consider, depending on what Congress does or doesn’t do,” said Cook. “It’s important that we are prepared and have legislation ready to go that will safeguard our state’s taxpayers,” said Belter.

If Congress does not extend the standard deduction provision of the soon-to-expire Bush tax cuts, there is a direct impact on taxpayers’ state income tax liabilities and on the state’s tax revenues.  Married couples filing joint returns could see an increase in their state income tax of up to $94 per year. 

The overall fiscal impact to the state would be an increase of approximately $6.7 million per biennium in additional tax revenue.  According to Fong, the group anticipates introducing legislation at the beginning of the 2011 legislative session.