A BILL for an Act to amend and reenact subsections 1 and 7 of section 57-38-30.3 of the North Dakota Century Code, relating to income tax rates for individuals, estates, and trusts and the marriage penalty credit; to repeal section 57-38-01.28 of the North Dakota Century Code, relating to the marriage penalty credit; and to provide an effective date.
HB1388 would revise North Dakota’s individual income tax rate schedules for residents and nonresidents, as well as the tax schedules for estates and trusts, beginning with taxable years after December 31, 2024. The bill updates the bracket thresholds and preserves the existing top marginal rates of 1.95% and 2.50%, while also directing the tax commissioner to publish inflation-adjusted bracket schedules and an optional simplified computation method for certain taxpayers.
The bill also amends the list of allowable income tax credits under section 57-38-30.3(7). It retains a broad set of existing credits, including credits for family care, renaissance zones, agricultural business investment, seed capital, biodiesel, internships, workforce recruitment, research and experimental expenditures, geothermal devices, long-term care partnership premiums, mobilized employees, private education contributions, angel investment, developmental disability or severe mental illness employment, adoption, maternity home or pregnancy help center contributions, apprenticeship, and workforce incentives. In addition, the bill repeals section 57-38-01.28, which is the separate marriage penalty credit provision, while still referencing the marriage penalty credit in the amended credit list.
If enacted, HB1388 would change the state income tax code by replacing the existing rate tables in the Century Code with new bracket amounts and by removing the standalone marriage penalty credit statute. It would affect individual taxpayers, married filers, estates, trusts, and taxpayers claiming any of the listed credits, while also giving the tax commissioner authority to issue updated bracket schedules tied to federal cost-of-living adjustments.
The overall sentiment in the available record is limited because there are no committee transcripts or recorded votes, but the bill ultimately failed. Based on the text alone, the measure appears to be a technical and policy-oriented tax update rather than a highly controversial overhaul, though the repeal of the marriage penalty credit and the bracket changes could have affected taxpayers differently depending on filing status and income level.
The main point of contention likely would have been the treatment of the marriage penalty credit and the broader distributional effects of the revised tax brackets, especially for married couples, single filers, and higher-income taxpayers. Because the bill failed without recorded debate in the provided materials, there is no documented split in the context, but the tax-credit repeal and bracket redesign are the most likely areas of concern.
HB1388 would amend North Dakota Century Code section 57-38-30.3 to revise income tax brackets for individuals, estates, and trusts and to update the list of credits available against income tax liability. It would also repeal section 57-38-01.28, eliminating the separate marriage penalty credit statute, while preserving a reference to that credit in the amended credit list. The bill would take effect for taxable years beginning after December 31, 2024, and would authorize the tax commissioner to issue inflation-adjusted rate schedules and a simplified tax-computation method for eligible taxpayers.
The available legislative record shows no committee transcripts or vote details, so there is little direct evidence of debate sentiment. The bill was introduced by a bipartisan group of House members and a senator, suggesting some cross-party interest in the tax changes, but it ultimately failed on March 25, 2025. On balance, the measure appears to have been treated as a tax-policy adjustment rather than a broadly supported consensus bill, with its failure indicating that it did not secure enough support to advance.
The most notable likely point of contention was the repeal of the marriage penalty credit, which could be viewed as reducing relief for some married taxpayers even as the bill reworks the overall rate structure. Another possible area of concern was the impact of the revised bracket thresholds on different filing statuses, including single filers, married couples filing jointly or separately, heads of household, and estates and trusts. Because there are no transcripts or recorded votes, no specific legislator objections are documented, but the distributional effects of the tax changes and the repeal of a targeted credit are the most plausible sources of disagreement.