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Committee hears testimony on HB 1388 to remove income-tax "marriage penalty"
Summary
The House Finance and Taxation Committee held a hearing on House Bill 1388, sponsored by Representative Nels Christiansen, to adjust individual income-tax brackets and remove what supporters describe as a "marriage penalty" that raises effective tax rates for some married filers and pass-through businesses.
Good morning, Chairman Hedlund and members of the House Finance and Taxation Committee. I'm Nels Christiansen and I'm honored to represent District 18, which includes Central And Northern Grand Forks and Northeast Grand Forks County. House Bill 13 88 aims to correct a condition in North Dakota's tax code that is both fundamentally unfair and has negative economic consequences, the income tax marriage penalty.
House Bill 1388 would change the individual income-tax rate schedule so that the brackets for married filing jointly are double those for single filers and the head-of-household brackets are adjusted proportionately. Sponsor Representative Nels Christiansen said the change would eliminate what he described as a higher effective tax rate on married couples with the same combined income as two single filers. “House Bill 13 88 aims to correct a condition in North Dakota's tax code that is both fundamentally unfair and has negative economic consequences, the income tax marriage penalty,” Christiansen said.
The bill drew technical explanation from Matt Pearl of the Office of the State Tax Commissioner, who told the committee that statutory tables published in the North Dakota Century Code do not always reflect the bracket amounts the tax commissioner applies after annual inflation adjustments. “What's in Century Code, what's published, when there's a new bracket or something that new tax bill that's passed that gets published in the Century Code, and it stays that way,” Pearl said, adding that the commissioner issues separate annual adjustments.
Pearl pointed to an apparent discrepancy in the bill draft where a historical printed bracket line is shown as “74,” while the updated bracket after inflation indexing is about $80,009.75. He also summarized the state's existing marriage-penalty credit, enacted in 2007, which targets relief to dual-earner households and reduces the fiscal impact compared with a household-wide credit.
Committee members asked clarifying questions about how taxable-income brackets interact with the standard deduction. Pearl explained that the bill's bracket thresholds are expressed in taxable income and that the 2025 standard deduction is $15,000 for single filers and $30,000 for married filing jointly—figures that affect where gross income would translate into taxable-income brackets.
No committee vote was recorded on HB 1388 during the hearing; the chair closed the hearing after questions. The committee did not take further action at that time.
