January 13, 2015

North Dakota

State & Local Taxes in 2015


North Dakota Tax Code Features

Progressive Features

• Graduated personal income tax structure

• Sales tax base excludes groceries

• Requires the use of combined reporting for the corporate income tax

Regressive Features

• Provides a deduction for state income taxes paid

• Fails to provide non-elderly taxpayers with refundable income tax credits to offset sales, excise, and property taxes

• Provides an income tax exclusion equal to 40 percent of long-term capital gains income

Tax Changes Enacted in 2013 & 2014

• Reduced personal and corporate income tax rates

ITEP Tax Inequality Index

According to ITEP’s Tax Inequality Index, North Dakota has the 20th most unfair state and local tax system in the country. States with regressive tax structures have negative tax inequality indexes, meaning that incomes are less equal in those states after state and local taxes than before (See Appendix B for state-by-state rankings and more details).

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