Corporate income tax down 10%, but state revenues still exceeding projections

Susan Sisk, director of the North Dakota Office of Management and Budget, presents budget guidelines for the 2025-27 biennium to state agency department heads at the Capitol on May 9, 2024. (Michael Achterling/North Dakota Monitor)

North Dakota collected 10% less in corporate income tax in fiscal year 2024 compared to fiscal year 2023, according to the North Dakota Office of Management and Budget’s monthly revenue report.

Federal spending aimed at keeping Americans afloat during the COVID-19 pandemic led to record high corporate profits in the fiscal year that ended June 30, 2023. Since then, revenue has slowed, the report states.

In North Dakota, corporate income tax revenues are largely driven by the energy industry, said Office of Management and Budget Director Susan Sisk. The strength of that sector has helped cushion the comedown from pandemic-era corporate profits.

“It’s stayed fairly strong for us, because the oil prices are strong, but we are seeing a level off from those high points that we saw with the pandemic,” Sisk said.

The Legislature anticipated a dip in corporate income tax revenue when it adopted its 2023-2025 budget last year.

Despite the drop in corporate income tax collections, fiscal year 2024 revenues still exceeded the state’s expectations.

North Dakota pulled in $82 million more in corporate income tax — or 42% — than state officials budgeted for fiscal year 2024. In all, the state collected about $277 million.

“The legislative forecast that was adopted, I think it was a little bit probably a little bit too conservative,” Sisk said.

The state estimates that North Dakota will make roughly $194 million in corporate income taxes in fiscal year 2025, which is similar to what the state made in fiscal year 2022.