Here’s something interesting about the North Dakota income tax that surprised me.
Yesterday I wrote about the monthly revenue report from the Office of Management and Budget. Overall, general fund tax revenues are up 16.7 percent through February as compared to last biennium. Income tax collections, in particular, continue to explode. Biennium to date personal and corporate income tax revenues are up 32.7 and 41.5 percent, respectively, over the last biennium.
That’s interesting, because that boom in income tax revenues – particularly the individual income tax – has been cut roughly in half since 2009.
So why are income tax revenues growing so much despite reductions in the income tax rate? A state legislator emailed this to me last night after seeing yesterday’s post:
Since 2009 the individual income tax rates were cut by 49.5% according to the tax department, but in 2009 there were 362,613 persons filing individual income taxes. 2012 there were 446,620 filers. That’s 84,000 more filers in a little over three years.
It’s 84,0007 new filers to be exact, a 23 percent increase.
With all the booming growth in North Dakota, maybe you’re thinking that number isn’t too impressive. So let’s put it into perspective. From 2009 through 2012 North Dakota’s population grew about 5.48 percent (about 8.79 percent through 2013).
This means that North Dakota isn’t just attracting a lot of people to the state. The state is attracting a lot of working people to the state, which is in line with the state’s shift in age demographics.