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Bill Summary · HB 1388

Summary — HB 1388 (North Dakota)

A BILL to amend and reenact subsections 1 and 7 of section 57‑38‑30.3, NDCC; to repeal section 57‑38‑01.28, NDCC (marriage penalty credit); and to provide an effective date.

Main purpose

The bill would (1) restate and clarify the state individual, estate, and trust income‑tax computation framework and rate schedules in subsection 1 of NDCC §57‑38‑30.3, and (2) remove the marriage penalty credit from the list of allowable credits and repeal the underlying statutory credit (NDCC §57‑38‑01.28). It also preserves administrative provisions for cost‑of‑living adjustments and an optional simplified computation method.

Key provisions

  • Tax computation (subsection 1): Confirms that North Dakota income tax for individuals, estates, and trusts is computed by applying specified rate schedules to North Dakota taxable income, using filing statuses that correspond to federal filing status. The schedules retain tiered brackets with rates of 0%, 1.95%, and 2.50% (with distinct thresholds for single, married filing jointly, married filing separately, head of household, and estates/trusts). Administrative rules remain for:
    • computing a federal taxable income starting point when no federal return has been prepared (pro forma return),
    • prescribing cost‑of‑living adjustments to bracket amounts,
    • an optional simplified computation method for some taxpayers.
  • Credits (subsection 7): Removes the “marriage penalty credit” from the enumerated list of tax credits taxpayers may claim under §57‑38‑30.3.
  • Repeal: Explicit repeal of §57‑38‑01.28 (the statute that created the marriage penalty credit).
  • Effective date: The Act would apply to taxable years beginning after December 31, 2024.

Who would be affected

  • Married taxpayers who previously claimed the marriage penalty credit would no longer be eligible for that credit; this could increase tax liability for some married filers compared with current law.
  • All individual taxpayers, estates, and trusts remain subject to the specified rate schedules and related administrative rules.
  • North Dakota Tax Commissioner and Department of Revenue for implementation, taxpayer guidance, and any form or instruction updates.

Procedural status and timeline

  • Introduced: November 18, 2024.
  • Effective date if enacted: Taxable years beginning after Dec. 31, 2024.
  • Legislative action: Placed on second reading; recorded second‑reading vote — failed to pass (yeas 13, nays 33). The bill did not become law.

Potential fiscal/administrative impact

  • No state fiscal analysis is provided in the bill text included here. Repealing the marriage penalty credit would likely increase state income‑tax collections to the extent the credit was previously claimed, but the bill materials supplied do not include an official revenue estimate.
  • Administrative impact would be modest: revising tax instructions, forms, and outreach to explain repeal and any computation changes.

Notes: This summary focuses on the North Dakota HB 1388 content (amendments to NDCC §57‑38‑30.3 and repeal of §57‑38‑01.28). Other unrelated bills in different states using the same bill number are not covered here.

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

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