Cory Fong – North Dakota Tax Commissioner

FONG: North Dakota Report Reflects 2nd Quarter Growth

By Cory Fong  

FOR IMMEDIATE RELEASE
Wednesday, September 29, 2010

Contact: Kathryn Strombeck, Research Analyst, 701.328.3402
Beth Boustead, Public Information Specialist, 701.328.3039

FONG: North Dakota Report Reflects 2nd Quarter Growth

BISMARCK, N.D. – Tax Commissioner Cory Fong today released a key economic report that reflects a 14.6 percent growth in North Dakota’s taxable sales and purchases during the second quarter. According to the report, North Dakota’s taxable sales and purchases were $3.416 billion during the months of April, May, and June 2010 compared to $2.982 billion during the same months in 2009.

“This shows that North Dakota’s economy is continuing to grow,” said Fong. “These figures are very encouraging, especially when you consider the continued impact of the national economic recession on the majority of the states.”

Comparing the second quarter 2010 to second quarter 2009, the growth was fueled by the mining and oil extraction sector, which grew 98 percent.

“A strong and robust energy sector has been a key player in powering our state economy and lifting revenues,” said Fong. “And it has fueled the local economies throughout the western half of the state, filling hotels, motels, not to mention the cash registers for the local retailers, and creating demand for housing.”

Other sectors reporting growth include: transportation and warehousing, which grew 47.8 percent; wholesale trade grew 28.7 percent; financial, insurance, real estate, rental and leasing grew 27.1 percent; other services grew 12 percent; manufacturing grew 10.1 percent; professional, scientific, technical, and management services grew 9 percent; educational, health care, and social services grew 7.4 percent; retail trade grew 6.9 percent; accommodation and food services grew 5.7 percent; information industries grew 2.7 percent; and construction grew 1.8 percent.

“The retail trade sector typically gives a pretty good snapshot of what is going on with consumers and businesses,” said Fong. “Even though nationally consumer confidence is wavering, North Dakota continues to buck that trend as our retail trade sector grew at nearly seven percent and it came during a time of very little inflation.”

One sector, miscellaneous, remained relatively flat reporting a decline of less than one-tenth of one percent. And, two of fifteen sectors reported a decline in taxable sales and purchases: utilities sector was down 60.7 percent; and arts, entertainment and recreation sector dropped by 0.8 percent.

The drop in the utilities sector is due to a significant change that occurred effective July 1, 2009 at which time all natural gas sold in the state became exempt from sales and use taxes. This change in the taxable base accounted for the overall drop in sales from the second quarter of 2009, when natural gas was subject to a one percent statewide sales tax.

“We continue to look for ways in which the state can help strengthen and support our local communities and to strengthen consumers’ confidence in our state’s economy,” said Fong. “To that end, our focus remains on job creation and offering certainty for North Dakota’s businesses and consumers, especially in the area of sustaining the broad-based tax relief that’s been delivered during recent years.”

Of the 50 largest cities, the biggest percentage increases for second quarter 2010 were: Tioga, up 174 percent; Williston, up 87.5 percent; Lincoln, up 47.2 percent; Watford City, up 46 percent; and Bowman, up 31.7 percent.

Of the 50 largest cities, the biggest percentage of decreases during the second quarter 2010 were: Casselton, down 34.6 percent; Park River, down 32.1 percent; Hillsboro, down 22.9 percent; Northwood, down 21 percent; and Cooperstown, down 19 percent.

Counties with the highest percentage increases were: Burke County, up 110.2 percent; Williams County, up 97.8 percent; McKenzie County, up 50.8 percent; Stark County, up 31.8 percent; and Bowman County, up 29.3 percent.

The counties with the biggest percentage decreases were: Logan County, down 34.3 percent; Oliver County, down 26.1 percent; Grant County, down 16.8 percent; Griggs County, down 16.3 percent; and Emmons County, down 13 percent.

Complete North Dakota Sales and Use Tax Statistical Reports from Second Quarter 2010 can be accessed on the web at: www.nd.gov/tax/salesanduse/pubs/reports/2010-2-stat-report.pdf – (159kb pdf).

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Fong Working with Legislators in Response to Federal Tax Increases

By Cory Fong  

FOR IMMEDIATE RELEASE
Tuesday, September 14, 2010

Contact: Beth Boustead
Public Information Specialist
701.328.3039

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.

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