Summary — SB 2093 (North Dakota) — Income tax deduction for retired law enforcement benefits
Status: Introduced March 7, 2025; Second reading — failed to pass (yeas 11, nays 35).
Purpose
- To create a state income tax deduction that excludes certain retirement benefits received by retired peace officers (and eligible surviving spouses) from North Dakota taxable income, and to make that exclusion retroactive to taxable years beginning after December 31, 2023.
Key provisions
- Adds/reenacts subdivision u of NDCC § 57‑38‑30.3(2) to permit a deduction from North Dakota taxable income for "retired law enforcement personnel benefits" received by eligible taxpayers.
- Eligibility:
- A taxpayer who served a combined total of at least 20 years as a peace officer; or
- A taxpayer who medically retired as a peace officer with a medical certificate showing a permanent mental or physical disability that rendered the officer unable to perform duties.
- Also covers retired law enforcement benefits paid to the surviving spouse of a deceased qualified retired peace officer.
- Scope of deduction:
- The deduction equals the amount of retirement income attributable to the officer’s peace‑officer employment — but only to the extent that amount was included in federal taxable income.
- Definitions supplied in the bill:
- “Peace officer” — a public servant authorized to enforce law and investigate violations at federal, state, or local level.
- “Qualified retired peace officer” — meets the service or medical‑retirement criteria above.
- “Retired law enforcement personnel benefits” — retirement income from a retirement plan maintained by or through the employer from which the officer retired and attributable to the officer’s peace‑officer employment.
- Retroactivity: The deduction provision is written to apply retroactively to taxable years beginning after December 31, 2023.
Version history / amendments
- Early (first‑engrossment) text also included amendments to subsection 1 of § 57‑38‑30.3 (income tax rate schedules / cost‑of‑living adjustments and related effective date language). Subsequent committee/house amendments narrowed the bill to focus on subdivision u (the retired‑officer deduction) and clarified retroactive application.
- Several committee reports and amendments appear in the record; however, the bill failed its second reading (11–35) and did not become law.
Who would be affected
- Primary: retired peace officers in North Dakota who meet the service or medical‑retirement criteria, and eligible surviving spouses receiving benefits; these taxpayers would see a reduction in state taxable income for the amounts allowed.
- Secondary: North Dakota Office of State Tax Commissioner (administration/interpretation), and state budget/revenue (potential reduction in income tax receipts — fiscal impact not specified in the bill text).
Procedural note
- Although the bill advanced through committee activity and amendments, it did not pass the required floor vote on second reading and therefore did not become law in the 2025 legislative session.
