Our view: New tax exemption for military adds to North Dakota’s ‘stickiness’ with service members, veterans

The military is paying attention to the goings-on in the communities and states where its bases are located. We know this.

How?

The Air Force releases “assessment of states’ support of military families” reports, which detail how each state provides support to Air Force personnel and their families. The criteria in the evaluation measures factors such as licensure ease for trailing spouses and education quality in schools near bases and installations.

“Since the first assessment released in 2020, the Department of the Air Force, states and installation communities have diligently worked toward the removal of barriers to military family readiness, which faces significant challenges due to frequent relocation,” the Air Force said in a 2021 release.

In short, the Air Force wants its host states to work to make life better for its personnel. Doing so, we assume, helps add a certain level of stickiness between installations and their host communities.

So when Gov. Doug Burgum this week signed into law a bill that exempts military pay from state income taxes for active duty, National Guard and military reserve members, North Dakota’s relationship with the military just a bit stickier – and perhaps will help convince military personnel to put down roots in North Dakota.

The exemption will include military pay as well as costs for things like training, mobilization and bonuses.

The bill was sponsored by Sen. Scott Meyer, R-Grand Forks, and co-sponsored by Rep. Steve Vetter, R-Grand Forks, and a handful of others.

“Hopefully they’ll set residency (in North Dakota) and then once they eventually separate from the military, they'll remember that we have no state income tax on military retirement benefits and hopefully they’ll come back to North Dakota,” Meyer said.

Burgum’s office said military service members often live in states with exemptions for military pay or no income tax as their official state of residence.

“By joining the roughly 20 states that don’t tax military income, North Dakota is recognizing the sacrifice of military service and building on the momentum of our ongoing efforts to make ours the most military-friendly state in the nation,” Burgum said in a statement issued from his office. “We’re grateful to the legislators, National Guard officials, military supporters and everyone else who advocated for this important tax relief.”

Why is this bill so important?

Well, aside from the obvious – that military members are making sacrifices that many of us aren’t – is the hope that they’ll stay as residents of the state. North Dakota now joins a dozen other states that have made this move, including Minnesota. Another 14 have partial exemptions and nine states – including South Dakota – have no state income tax.

It might help boost recruitment efforts for the National Guard, and it should be just one more layer of hospitality heaped on top of a growing list that North Dakota offers for its military personnel.

Another example came a few years ago, when state lawmakers approved an improved system for licensure reciprocity for military spouses. It means someone who has a professional license elsewhere can more easily – and quickly – practice the same profession in North Dakota without a cumbersome relicensing process.

Other states are making some of these moves, so it’s important that North Dakota stays in front of efforts to show service members and veterans that they are important to us.

Mostly, we hope these changes further add to the stickiness between North Dakota and its military personnel past and present.