A BILL for an Act to create and enact a new section to chapter 11-09.1 and a new section to chapter 40-05.1 of the North Dakota Century Code, relating to limitation of the rate of home rule sales, use, or gross receipts taxes; and to provide an effective date.
Summary
HB 1552 would place a statewide cap on the rate of home rule sales, use, and gross receipts taxes that counties and cities may impose. Under the bill, a home rule county or city could not create a new tax, or extend or increase an existing tax, after June 30, 2025, if the rate would exceed 3 percent. Existing local taxes above 3 percent that were already approved before July 1, 2025, could continue only until their current approval period expires, after which they could not be reimposed above the 3 percent cap.
The bill applies to both home rule counties under chapter 11-09.1 and home rule cities under chapter 40-05.1 of the North Dakota Century Code. It would take effect for taxable events occurring after June 30, 2025, and would therefore limit future local sales-tax authority while preserving only temporary grandfathering for currently approved higher-rate taxes.
Impact
HB 1552 would amend North Dakota law by adding new rate restrictions to the home rule tax authority of counties and cities. It would not eliminate local sales, use, or gross receipts taxes, but it would prohibit future local rates above 3 percent and prevent renewal of higher rates once existing approvals expire. The practical effect would be to constrain local fiscal autonomy and standardize the maximum local tax rate across home rule jurisdictions.
Sentiment
The bill did not advance, failing on House second reading by a vote of 38 yeas to 51 nays. That vote suggests there was meaningful support for limiting local tax rates, but a larger share of the chamber opposed the proposal. With no committee transcripts available, the recorded vote is the main indicator of sentiment, and it points to a divided but ultimately unfavorable reception in the House.
Contention
The central point of contention is the balance between taxpayer protection and local government taxing authority. Supporters likely viewed the 3 percent cap as a way to restrain local tax growth and provide predictability for businesses and residents, while opponents likely objected that the bill would interfere with home rule powers and reduce flexibility for cities and counties to fund local services. The grandfathering provision for existing taxes above 3 percent may have softened the impact somewhat, but the long-term restriction on future increases remained the key issue.
A BILL for an Act to create and enact a new section to chapter 11-09.1 and a new section to chapter 40-05.1 of the North Dakota Century Code, relating to limitation of the rate of home rule sales, use, or gross receipts taxes; and to provide an effective date.
AN ACT to create and enact a new section to chapter 11-09.1 and a new section to chapter 40-05.1 of the North Dakota Century Code, relating to a county home rule charter and city home rule charter conforming with statute or court order; and to amend and reenact sections 11-09.1-06 and 40-05.1-07 of the North Dakota Century Code, relating to the amendment or repeal of a county and city home rule charter.
A BILL for an Act to create and enact a new section to chapter 57-02 of the North Dakota Century Code, relating to limitations on taxable valuation increases without voter approval; and to provide an effective date.
A BILL for an Act to create and enact a new section to chapter 57-02 of the North Dakota Century Code, relating to limitations on taxable valuation of residential property; and to provide an effective date.
A BILL for an Act to create and enact a new section to chapter 57-15 of the North Dakota Century Code, relating to limitations on taxing district budgets without voter approval; and to provide an effective date.