|FOR IMMEDIATE RELEASE||Contact: Cory Fong, Tax Commissioner, 701-328-2770|
|Tuesday, October 24, 2006|
Record Corporation Income Tax Collections For Fiscal Year 2006
BISMARCK, N.D. – Tax Commissioner Cory Fong announced today that during Fiscal Year 2006 the Tax Department collected nearly $112 million in corporate income tax from all in-state and out-of-state corporations.
Fong said, “The $112 million represents an increase of nearly two and one-half times the amount of the five year average.” The average for the most recent five years equals $48.4 million.
“Corporate income tax collections continue to be strong,” said Fong. “During the first few months of Fiscal Year 2007 corporate income tax collections are up 178 percent over the same time in the 2003-05 biennium.”
Fong attributes much of the increase to a strong economy and a healthy energy industry, as seen in the oil and gas activity in the west as well as with the development of renewable energy projects across the state.
“The success in the energy industry has been good for North Dakota’s economy,” said Fong.
“All corporations are expected to pay their fair share of taxes, whether in-state or out-of-state,” said Fong. “This issue is one that was communicated to North Dakota’s Congressional Delegation when I voiced my opposition to proposed federal business activity tax (BAT) legislation that would limit a state’s ability to create tax policy, including how it would tax multi-state corporations.”
North Dakota Senators Kent Conrad and Byron Dorgan, both of whom previously served as State Tax Commissioner, responded to Fong expressing their appreciation of his concerns and sensitivity to the federal proposed legislation.
Fong said he opposed the proposed federal legislation because “The reductions in taxes paid by out-of-state companies would shift the tax burden to local businesses in order to maintain state services. This is potentially harmful for North Dakota’s brick-and-mortar business sector -- the businesses that are here, and have been here, serving our communities in so many ways.”
The estimated cost to North Dakota if the federal legislation passes is anticipated to total $18 million per year.
“The changes in the business activity tax have a negative impact on our tax collections for the state,” said Fong. “The bottom line is, the federal proposed legislation infringes on states’ rights to set tax policy. It’s unnecessary, it’s harmful to states, and it’s wrong.”
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