FARGO – The Democratic challenger for North Dakota tax commissioner is proposing an income tax break for all active-duty and retired military service members in the state.
“There’s no excuse to why we can’t do that when we have the level of resources that we do,” Jason Astrup said Thursday during a news conference in Fargo.
Astrup calls it his “Saluting Their Service Tax Cut” proposal, which would provide an income tax exclusion for any portion of benefits and pay that are taxable on an active-duty military service member’s federal tax return.
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It would also offer an exclusion for any retirement benefits that are taxable on the veteran’s federal tax return.
It would cost the state about $1.8 million annually to exclude retirement benefits from taxation, and about $1.9 million annually to exclude the pay of active-duty service members in the state.
That roughly $4 million is a “rounding error” when you consider the state’s $1.4 billion budget surplus at the end of the last biennium, Astrup said.
“I think if the government isn’t using that money, they need to give it back to the people,” he said. “They shouldn’t be stockpiling our tax dollars.”
Tax Commissioner Ryan Rauschenberger, a Republican, could not be reached for comment Thursday.
North Dakota already provides an income tax exclusion for National Guard and Reserve members who are activated for federal active-duty service, but the state is one of only eight that taxes 100 percent of military retirement benefits received, Astrup said.
While the Democrat said he had no data to show an outward migration, he said this could be driving veterans to live in other states upon retirement.
“They’re specialized and highly trained individuals,” he said. “We need to keep those individuals here in North Dakota to enter our workforce here.”
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