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North Dakota Voters To Decide On Eliminating Property Tax

One State May Eliminate Its Property Tax
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Homeowners in one state may be poised to hand themselves a major tax break.

North Dakota voters head to the polls Tuesday to decide whether to become the only state in the country to eliminate property taxes. Proponents of the plan argue that property taxes are inconsistent and fly in the face of the concept of property ownership, according to The New York Times. The advocates additionally note that North Dakota’s recent oil boom means that the state’s coffers are full and even overflowing, supposedly eliminating any need for a property tax.

UPDATE: Voters struck down the measure, keeping the state's property tax in place.

And boy has the North Dakota economy been booming. The state pulled in more than $100 million in March 2011 from the oil industry alone. Largely a result of that sector, the state also now boasts the lowest unemployment rate in the nation. But competition among businesses for workers is so now fierce, the wages so high, that local governments have had trouble convincing residents to help repair roads, rather than join in the boom.

Had the property tax proposal, known as Measure 2, passed, North Dakota would have been the first state to eliminate a major tax since similarly oil-rich Alaska got rid of its income tax in 1980, tax, USA Today reports.

“I would like to be able to know that my home, no matter what happens to my income or my life, is not going to be taken away from me because I can’t pay a tax,” Susan Beehler, one of the activists advocating for the elimination of the tax, told the NYT.

Opposing the change is a group of strange bedfellows, which includes the Chamber of Commerce, unions and many lawmakers. They argue that foregoing the $800 million per year generated by the property tax could strain local government budgets.

If what’s happened in other states is any indication, pro-property tax advocates in North Dakota may have cause for concern. On Monday, Pennsylvania lawmakers tabled a bill that would eliminate a school district’s ability to levy property taxes, the Times Herald reports. Though the legislation didn’t pass, many of the lawmakers who voted to table it actually support the concept, they just believe the current bill is flawed.

And there are already some places in the U.S. where homeowners can escape property taxes; Stafford, Texas eliminated its property tax in 1995, according to U.S. News and World report.

Check out the states where residents pay the least in taxes:

10 U.S. States With The Lowest Taxes
10. New Mexico(01 of10)
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Taxes paid by residents as pct. of income: 8.4 percentTotal state and local taxes collected: $16.9 billionPct. of total taxes paid by residents: 59 percentPct. of total taxes paid by non-residents: 41 percentThe state and local tax burden on New Mexico residents is the tenth lowest in the country. The state has a slightly below-average business climate, with a corporate tax rate ranging from 4.8% to 7.6%. Gasoline taxes are quite low, but excise taxes on alcohol and cigarettes are above average. The state tax on beer is one of the highest in the country. A high percentage of state and local revenues come from non-residents. This is usually the case with most states with a low tax burden on its residents. Per capita, state residents pay just $2,027, the sixth-lowest amount in the country.Read more at 24/7 Wall St.
9. Louisiana(02 of10)
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Taxes paid by residents as pct. of income: 8.2 percentTotal state and local taxes collected: $44.2 billionPct. of total taxes paid by residents: 54 percentPct. of total taxes paid by non-residents: 46 percentDespite having the fifth highest average state and local sales tax rate, residents of Louisiana have a relatively low tax burden. A leading reason for this is the simple fact that, on average, residents pay one of the smallest amounts of total state and local taxes in the country. According to the Tax Foundation, property taxes in the state are $565.23 per capita, the fifth lowest amount among states. Louisiana also collects $1.78 in federal spending for every dollar spent on federal taxes -- the fourth highest ratio. This rate of federal spending helps offset the need for higher state revenue from taxes.Read more at 24/7 Wall St.
8. South Carolina(03 of10)
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Taxes paid by residents as pct. of income: 8.1 percentTotal state and local taxes collected: $35.4 billionPct. of total taxes paid by residents: 66 percentPct. of total taxes paid by non-residents: 34 percentResidents of South Carolina pay the second smallest total amount in state and local taxes per person in the country, behind only Mississippi. The average person in the state pays $2,742 in taxes. Excise taxes are extremely low: the state has the fifth lowest gasoline tax in the country and the ninth lowest cigarette tax. The state also has relatively low property taxes at both the state and local level.Read more at 24/7 Wall St.
7. New Hampshire(04 of10)
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Taxes paid by residents as pct. of income: 8 percentTotal state and local taxes collected: $9.6 billionPct. of total taxes paid by residents: 56.4 percentPct. of total taxes paid by non-residents: 43.6 percentNew Hampshire "has no special revenue source from non-residents, but the citizens' approval of limited government spending has kept the tax burden low," according to the Tax Foundation, The state has a flat 5% income tax rate that only applies to dividend and interest income, but, effectively, no tax on wages, and as a result most residents don't have to pay it. The state is also one of only five states that has no sales tax. This causes many people from outside of the state to travel to New Hampshire to purchase goods that are heavily taxed in their own states. Not all taxes in New Hampshire are low, however. The state has the third highest property tax rate in the country.Read more at 24/7 Wall St.
6. Texas(05 of10)
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Taxes paid by residents as pct. of income: 7.9 percentTotal state and local taxes collected: $196.5 billionPct. of total taxes paid by residents: 63.4 percentPct. of total taxes paid by non-residents: 36.6 percentThe population of Texas is 30% larger than New York, but collects more than 60% less in tax revenue than the Empire State. The tax burden on residents is the sixth lowest in the country, at just 7.9% of average income per resident. The biggest reason for this is that the state is one of just six in the country to levy no personal income tax. Texas also has the 11th lowest sales tax, at 7.39%, and average or below average rates on gasoline, cigarettes and alcohol.Read more at 24/7 Wall St.
5. Wyoming(06 of10)
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Taxes paid by residents as pct. of income: 7.8 percentTotal state and local taxes collected: $9.3 billionPct. of total taxes paid by residents: 29.9 percentPct. of total taxes paid by non-residents: 70.1 percentBesides Alaska, Wyoming has the greatest percentage of its state revenue paid for by non-residents. This is because of taxes on oil and coal that bring money in from out-of-state oil and mineral companies. These taxes account for such a large percentage of Wyoming's revenue that the state does without a corporate income tax. The state also has no individual income taxes. Wyoming has an average state and local sales tax rate of 5.38%, one of the lowest in the country.Read more at 24/7 Wall St.
4. Tennessee(07 of10)
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Taxes paid by residents as pct. of income: 7.6 percentTotal state and local taxes collected: $48 billionPct. of total taxes paid by residents: 63.7 percentPct. of total taxes paid by non-residents: 36.3 percentTennessee has the eleventh lowest per capita income in the country. Residents of the state pay just $1,851 in taxes, the second lowest amount in the U.S. The state's business climate is average, but other taxes are relatively low. The sales tax of 7% is one of the highest in the country, but food purchases are only taxed 5.5%. Dividend and interest income is taxed in the state at a rate of 6%, but there is no other personal income tax levied. Tennessee collects no state-level property tax, one of just a few to do so.Read more at 24/7 Wall St.
3. South Dakota(08 of10)
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Taxes paid by residents as pct. of income: 7.6 percentTotal state and local taxes collected: $5.2 billionPct. of total taxes paid by residents: 56 percentPct. of total taxes paid by non-residents: 44 percentSince 1977, South Dakota's tax burden has dropped from 9.1% to 7.6%, causing the state to change from the 15th least burdened state to the third least burdened. The state has no corporate or individual income tax. It is easier for South Dakota to keep a low tax burden than many other states, however. According to the most recent data available from the Tax Foundation, South Dakota receives $1.53 back for every dollar collected in federal taxes, lessening the state's dependence on state and local revenue.Read more at 24/7 Wall St.
2. Nevada(09 of10)
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Taxes paid by residents as pct. of income: 7.5 percentTotal state and local taxes collected: $20 billionPct. of total taxes paid by residents: 52.5 percentPct. of total taxes paid by non-residents: 47.5 percentNevada has the second-lowest tax burden in the country, with residents paying just 7.5% of their income on state and local taxes. Nearly half of all state tax revenue comes from non-residents. According to the Tax Association's State Business Tax Climate Index, Nevada has one of the most favorable environments for business, as it is one of the four states to levy no corporate tax at all. A significant amount of the state's revenue comes from "sin taxes" on gambling, alcohol, and tobacco, most of which comes from tourists. Sales tax is above the national average, and the tax on gasoline is one of the highest in the country. Counties are also allowed to levy additional gas taxes on top of the state.Read more at 24/7 Wall St.
1. Alaska(10 of10)
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Taxes paid by residents as pct. of income: 6.3 percentTotal state and local taxes collected: $18.8 billionPct. of total taxes paid by residents: 20.5 percentPct. of total taxes paid by non-residents: 79.5 percentAlaskans have the lowest tax burden of any state in the country, paying just 6.3% of their income in state and local taxes. This is over one full percentage point lower than the state with the second smallest tax burden. According to the Tax Foundation, "Before the Trans-Alaska pipeline was finished in 1977, taxpayers in Alaska bore the second-highest tax burden in the country. By 1980, with oil tax revenue pouring in, Alaska repealed its personal income tax and started sending out checks instead. The tax burden plummeted, and now Alaskans are the least taxed." The state also levies no personal income tax or sales tax.Read more at 24/7 Wall St.

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