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New corporate tax repeal bill costly

By Dave Thompson

Bismarck, ND – North Dakota Tax Commissioner Rick Clayburgh says the current version of a bill to gradually eliminate corporate income taxes is not revenue neutral -- and would mean a loss of about $1.1 million.

As the bill stands now, it reduces the corporate income tax by 20 percent a year over the next five years. To make up for the lost revenue, state sales taxes would be raised by a quarter-percent for the first six months of 2005. Supporters have said they still have a revenue-neutral bill. But Clayburgh says that's not how his department sees it.

"As the bill is currently written, the impact to the state general fund is about $1.1 million."

This includes the gradual reduction in corporate taxes, a .25 increase in state sales tax, and the repeal of the fees paid to retailers for collecting the sales tax.

Clayburgh says while the Department could not issue a formal fiscal note until the amendments were adopted on the floor, it did an analysis before the vote...and shared that with the Legislative Council.

The bill passed 27 to 20 -- and will be considered in the House.