AN ACT to amend and reenact section 57-38-59 of the North Dakota Century Code, relating to withholding from wages of employees; and to provide an effective date.
SB 2047 amends North Dakota’s wage withholding law for state income tax purposes. The bill continues the existing framework under which employers withhold state income tax from employee wages based on a percentage of federal withholding or, if adopted by rule, tax tables set by the Tax Commissioner. It also preserves the Tax Commissioner’s authority to adjust withholding percentages or adopt withholding tables so that withholding more closely matches actual state income tax liability.
The bill adds a new limitation stating that, unless a taxpayer instructs otherwise, an employer may not withhold or deduct state income tax from wages described in subdivision g of subsection 2 of section 57-38-30.3. The act applies beginning with taxable years after December 31, 2025, so it changes withholding administration prospectively rather than immediately.
SB 2047 updates section 57-38-59 of the North Dakota Century Code, affecting employers, payroll administrators, and the Tax Commissioner’s withholding administration rules. The practical effect is to preserve the state’s general withholding system while creating an exception for a specified category of wages, which may reduce withholding on those payments unless the employee directs otherwise. The bill does not broadly change income tax rates or liability, but it does alter how certain wages are treated for withholding purposes starting in tax year 2026.
The available record suggests the bill was broadly supported and noncontroversial. It passed the Senate 46-0 and the House 86-6, indicating strong bipartisan approval. No committee transcripts or recorded debate were provided, but the vote totals suggest the measure was viewed as a technical or administrative tax adjustment rather than a major policy dispute.
The main point of potential contention is the new prohibition on withholding from the wages identified in section 57-38-30.3(2)(g), which may affect a specific class of workers or payments and could change payroll practices for employers. Any disagreement would likely center on whether that exception is appropriate, how it should be administered, and whether taxpayers should have default withholding on those wages. However, the recorded votes show little visible opposition overall.