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SB 2047

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.

69th Legislative Assembly (2025-26)

ND SB 2047 lets the Tax Commissioner set or adopt withholding methods (percentages or tables) to better match state income tax; employers must apply rules; effective after 2025.

Filed with Secretary Of State 03/18
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Bill Summary · SB 2047

Summary — SB 2047 (North Dakota)

Title: AN ACT to amend and reenact section 57‑38‑59 of the North Dakota Century Code (withholding from wages of employees); provides an effective date.

Purpose

The bill updates and reenacts NDCC §57‑38‑59 to clarify and consolidate the State’s authority and procedures for employer withholding of North Dakota individual income tax from employee wages. It confirms the Tax Commissioner’s ability to set withholding methodology (percentages or tables) so withheld amounts approximate taxpayers’ state income tax liability.

Key provisions

  • Reenacts §57‑38‑59 to require every employer paying wages to deduct and withhold amounts determined by the Tax Commissioner. Those amounts are calculated as a percentage (or percentages) determined by the Commissioner multiplied by the total amount that must be deducted under the federal Internal Revenue Code, so that state withholding will approximate state income tax due.
  • Authorizes the Tax Commissioner to adjust the withholding percentage(s) if actual withheld amounts prove disproportionate to taxpayer liabilities.
  • Permits the Tax Commissioner, by rule, to adopt state withholding tax tables (in lieu of percentage‑based withholding tied to federal withholding) that employers must follow when adopted.
  • Provides an explicit non‑withholding rule: unless otherwise instructed by a taxpayer, employers may not withhold state income tax from wages described in subdivision g of subsection 2 of §57‑38‑30.3 (the bill cites that statutory reference rather than restating the wage category).
  • Continues the statutory framework for employer withholding responsibilities; the section heading references penalties, and existing penalty provisions in state tax law remain applicable as provided in statute.

Who is affected

  • Employers operating in North Dakota — required to implement the withholding method determined by the Tax Commissioner and update payroll processes accordingly.
  • Employees — potential changes in the accuracy and timing of state tax withholding from wages.
  • North Dakota Tax Commissioner — gains or retains rulemaking authority to set percentages or withholding tables and to adjust them administratively.

Effective date & procedural status

  • Effective for taxable years beginning after December 31, 2025.
  • (Documented legislative actions included passage and executive approval in 2025 per the provided record.)

Practical impacts

  • Employers and payroll providers should monitor Tax Commissioner rulemaking for new percentages or tables and prepare systems updates.
  • Adjustments could change withholding amounts from paychecks; employees may need to review withholding instructions or forms if categories referenced in §57‑38‑30.3 apply to them.

Compiled from official sources — confirm details with the bill’s official record.

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