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Three legislative bills offer tax credit to renters

Renters in North Dakota could get some of their payments returned if one of three North Dakota legislative bills passes into law. Senate Bill 2230, Senate Bill 2307 and House Bill 1371 all include some form of renter's tax credit, which bill spon...

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Renters in North Dakota could get some of their payments returned if one of three North Dakota legislative bills passes into law.

Senate Bill 2230, Senate Bill 2307 and House Bill 1371 all include some form of renter's tax credit, which bill sponsors say offers financial relief to renters "left out" of North Dakota's previous property tax relief legislation amid a statewide climate of rising rental prices.

Both Senate bills propose 15 percent of one year's rent be considered property taxes or mobile home taxes, making the renter entitled to a tax credit for that amount, not more than $900.

SB 2307 is different because it also includes a residential property tax credit proposal.

HB 1371 holds a rent credit proposal similar to the two Senate bills, but the credit would be applied to 5 percent of the first $7,800 of rent paid in one year. The highest amount would be $390.


Renter's tax credit is particularly important to Grand Forks, local legislators and city officials said, because the city has a larger number of renters than homeowners. According to recent U.S. Census data, Grand Forks has about 11,600 renter-occupied units and 10,800 owner-occupied units.

"They've seen their rents continue to go up in most cities," said Rep. Lois Delmore, D-Grand Forks, who is the prime sponsor for HB 1371. "They haven't seen any property tax relief."

Previous legislation has allowed tax breaks for property owners. For example, in the last legislative session, the state appropriated more money to school districts, which allowed school districts to decrease the amount of money drawn from property taxes, resulting in lowering property owners' taxes.

But that hasn't lowered costs for renters, Delmore said.

Grand Forks City Council member Crystal Schneider testified Monday on behalf of the city in favor of HB 1371.

"A pretty significant portion of our population is not seeing any tax relief," Schneider said. "This is a way to give them some sort of tax relief."


Local and state supporters of renter's tax credit have mixed opinions on how the bills will fare through the legislative session.


Tyler Axness, D-Fargo, said he's optimistic some sort of renter's tax credit will be passed into law this legislative session.

"The renters of North Dakota have been left out," he said. "Rents haven't stayed steady, nor have they gone down." Axness is the prime sponsor for SB 2230.

Schneider said she doubts HB 1371 will pass, based on her testimony to the House Finance and Taxation Committee.

"Generally what they said is, 'we've already provided property tax relief,'" she said.

Finance and Taxation Committee Chairman Rep. Craig Headland, R-Montpelier, said he does not support renter's tax credit because he believes the best route to provide tax breaks to renters is through income tax reduction.

"The (renter's credit) bills have not been supported in the past. It's simply because renters do not pay property taxes," Headland said. "I think you can make the argument that their rents have held down because the state has relieved the property owner."

But Schneider disagreed. "That doesn't necessarily trickle down to the renters," she said.

Axness is hopeful for SB 2230 because it benefits the two largest eastern North Dakota cities, as well as western North Dakota, he said.


Fargo, like Grand Forks, also has more renters than property owners, and while western cities have a lower percentage of renters, SB 2230 also includes tax credit for mobile homes, which are growing in popularity in the Oil Patch, Axness said.

Rep. Kylie Oversen, D-Grand Forks, is also a sponsor on SB 2230, and said it will particularly benefit her district, which houses all of UND and many student renters.

Axness pulled the text for SB 2230 from SB 2307, of which he is also a sponsor, because he thought the rent credit portion of the bill should be voted on alone, he said.

This aligns with Grand Forks city officials' take on the two Senate bills. The city is opposed to SB 2307, but not because of the renter's tax credit, said John Bernstrom, city spokesman.

The city opposes SB 2307 because of a portion of the bill requiring residential property tax credit application to be processed through the city assessor's office, which "would be an administrative nightmare," Bernstrom said.

The city supports HB 1371 and has not decided an official stance on SB 2230, but will likely decide to support it, Schneider said.

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