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Erik Burgess, Published October 30 2012

ND tax commissioner says clothing exemption unworkable

FARGO – Republican incumbents for state Senate and House seats in southeast Fargo and the state’s top-ranking tax official took aim Tuesday at a recently announced Democratic proposal to eliminate state sales tax on clothing, saying the plan wouldn’t work in North Dakota.

“This is simply unworkable under the current environment,” said Cory Fong, the Republican state tax commissioner, at a news conference also attended by the two House candidates and the Senate candidate in District 46.

Fong said the measure, supported by the Demo-crats running for the legislative seats in District 46, would be too complicated for auditors and retail business owners, in part because it would ditch the state portion of sales tax on clothing but keep the locally levied sales taxes.

“There’s a fine line on what is clothing, what is an accessory. It’s very complicated,” Fong said.

Fong also said the plan can’t work in North Dakota because the state has adopted the Streamlined Sales Tax Agreement, a national pact meant to simplify sales taxes that dictates that state tax base must be identical to the tax base for local jurisdictions.

Allowing retailers to keep the local tax but exempting the state levied tax would be against the provisions of the agreement, which helps the state collect taxes from remote vendors who are not based in North Dakota, Fong said.

“We couldn’t do that and still be a part of Streamline,” he said.

Democrat George Sinner, who is challenging Sen. Jim Roers for the Senate seat in District 46, said he supports the plan because it provides immediate tax relief to anybody who buys clothes.

“I asked the vendors, and I asked the retailers and they said it would be no problem,” Sinner said.

The District 46 Republicans also criticized Sinner’s property tax relief proposal, arguing that his plans to lower the value of homes by 20 percent would negatively affect the market and not guarantee tax relief.

Roers said he and his fellow Republican candidates support Gov. Jack Dalrymple’s property tax plan, which they said would reduce school property taxes by 50 percent for a school district with an average levy, saving the average homeowner around $1,070 per year.

Sinner said his plan affects all North Dakotan homeowners equally, whereas Dalrymple’s plan works off an average, meaning Fargo homeowners, who pay higher than average taxes in the state, would receive less relief.

Readers can reach Forum reporter Erik Burgess at (701) 241-5518