Getting the 4-1-1 on property tax relief

As the calendar year reaches its final month, it is time for residents to start thinking about filing their tax returns. During the last session of the North Dakota Legislature, lawmakers passed a property tax credit to be redeemed for a two-year...

As the calendar year reaches its final month, it is time for residents to start thinking about filing their tax returns.

During the last session of the North Dakota Legislature, lawmakers passed a property tax credit to be redeemed for a two-year period starting with the upcoming filing season. The credit is claimed as part of the individual income tax return, with the inclusion of a Schedule PT form.

For those citizens who do not file income taxes, they are required to fill out an ND-3 form by mid-October.

"There are three types of properties that are eligible - residential, agricultural and commercial," Tax Commissioner Cory Fong said.

Fong said the former two are filed under one form and require the filer to be a North Dakota resident. Commercial property owners are not required to be residents, only that they file individual income taxes in the state.


Fong and other folks from his office were in Dickinson Friday to spread the word to tax professionals, volunteer tax preparers and county auditors and treasurers. He said the tax office has already traveled to Fargo and Bismarck to offer these training sessions and plans to visit other cities throughout the state.

Fong said in to claim the residential and agricultural or the commercial property tax credits, people need to go back to their files and find their 2006 real estate tax and 2007 mobile home tax.

"Ten percent of the tax is what generates the credit," Fong said.

Fong said the 10 percent is calculated before any special discounts and special assessments are applied. Fong said on most forms, the 10 percent is calculated from the consolidated tax line.

"The maximum credit allowed is $500 for all people, except those filing jointly," Fong said.

Married couples filing jointly receive a $1,000 credit during the first year.

Fong said in the second year of the program, the residential and agricultural credit might be lessened if the state expends its $47 million limit. He said the 10 percent rate might be reduced.

"There are a variety of situations that will exist," Fong said of how to redeem the credit. "The tax credit will be used first to offset tax liability."


Fong said people have the option of receiving a larger refund, applying the credit to future tax returns or receiving a certificate for the unused credit, which would be redeemed at the county treasurer's office. The certificate is good for one year after the date of issue.

Fong said the tax commission office did not want to micromanage the county treasurers, so he isn't sure exactly how the certificates are redeemed.

"The other thing to know about the commercial credit is your only option with commercial credit is to carry it forward," Fong said.

Filing forms

On the main state individual income tax form, ND-1, the property tax credits are under items 19-25 in the credits section.

Joe Becker, individual income tax specialist at the tax commission office, said the credits are somewhat organized in a particular order so it's easier to determine if the filer receives a credit.

Becker said there is no reason for people to fill out every single residential and agricultural piece of property owned, only that enough are filled out to reach the maximum credit allowed.

"Save yourself some time and paperwork, and save us some data entry," Becker said.


However, if people own more properties than there is available space, there is a continuation form called the PTC.

On the flip side of the PT schedule, commercial property owners fill out the necessary information to get the credit. The form works the same as the residential and agricultural form.

"The answer of how to handle the completion of the schedule depends on the situation," Becker said.

Getting the 4-1-1

When property owners receive their property tax statements, it should include some information about the changes.

"The brochure is a high-level overview," Fong said. "We wanted to put something together that was helpful to every taxpayer."

He said the information is broad, so the tax commission office is expecting an increase in calls from people with questions. In order to help streamline the information, Fong said the tax commission Web site has a page dedicated to providing assistance. The site is relief.

Fong said the tax forms are not yet on the Web site, with the exception of the ND-3, which is completed by residents who own property but do not need to submit individual income tax forms.

The tax commission office also has dedicated a special phone line to property tax questions at (877) 328-2760.

"We're trying to get the word out in various ways," Fong said.

Fong said e-filing is ready with these new forms.

The property tax relief comes from the permanent oil trust fund, though, Fong said it's not entirely oil revenue. He said the credit is possible because of the robust economy.

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