Trying to keep military members in state, legislators look to cut tax on retiree benefits

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BISMARCK, N.D. - House Bill 1053 would exempt military retirement benefits from state income tax. Supporters are saying this bill could lead to a tenfold increase in revenue.

Representative Steve Vetter, R-Grand Forks, and Senator Randy Burckhard, R-Minot, both represent their air force bases and this bill according to representative Vetter is an investment into North Dakota.

Vetter and Burckhard say this will act as a workforce recruiting tool, as well as put the state in a more favorable position during base retention and expansion. According to Vetter, this tax cut accounts for about $550 per retiree.

He estimates that bringing a new retiree in the state would generate $4,000 in income tax and sales tax from each retiree. In addition to state tax income, federal grants could pay for the program in as little as five years.

National Guard Adjutant General Alan Dohrmann says some North Dakota National Guard Members in Fargo- retired or active- are calling Minnesota home.

“You're not going to pay tax on your military pay. If you're receiving any disability pay, you're not going to pay any tax on that and if you have a mortgage, you're not going to pay tax on your home. So that's what we're up against in the Red River Valley,” said Dohrmann.

More than 5,400 military retirees call North Dakota home and all supporters expect that number to increase if they eliminate the tax.