Data: North Dakota's Largest Property Taxpayers Are Out-of-State Corporations – InForum

BISMARCK — The largest property taxpayers in North Dakota are out-of-state corporations, according to a group opposing a measure to repeal the tax.

But the man behind the ballot question says the data is incomplete.

The North Dakota Association of Counties released data on each county's top three property taxpayers earlier this month. According to the data, these top taxpayers paid about $90 million in 2023.

According to the data, North Dakota collected more than $1.4 billion in property taxes last year, meaning the top three property taxpayers picked up 6% of the tax.

The data also shows that 77% of the top three property taxpayers are headquartered outside of North Dakota. According to the data, non-state companies were among the largest taxpayers paying at least $73 million in 2023. That was 82% of the highest property taxpayers and at least 5% of last year's total property taxes.

“There is a large portion of out-of-state companies in the top three,” said Aaron Birst, executive director of the North Dakota Association of Counties.

Many people, including lawmakers, asked the association about the data because Measure 4, which would eliminate the property tax, is on the ballot for the Nov. 5 general election, Birst said. There is no good government system to track where taxpayers are located, he said.

The association asked each county, 53 in total, about the three largest property taxpayers, Birst said. He acknowledged that the data is incomplete, making it difficult to say whether out-of-state taxpayers would benefit most from Measure 4.

“What I would like to say is that if you eliminate property taxes, a significant portion of the taxes currently paid would go to the state,” he said.

The association spoke out against the voting question.

The largest property taxpayer in North Dakota is ONEOK. The Tulsa, Oklahoma-based natural gas company paid at least $15.5 million in 2023, according to the association. The company could pay more because the data only reflects the top three property taxpayers for each county.

New York-based oil and gas company Hess came in second with $11.1 million, followed by Fort Worth, Texas-based BNSF Railway, which paid $6.1 million, according to 2023 data showed. According to the data, Northern States Power Co., a Minneapolis subsidiary of Xcel Energy, came in fourth place with a payment of $5.2 million last year.

The only North Dakota company to make the top 10 was Bismarck-based Montana-Dakota Utilities. MDU paid $3.9 million last year.

Former Rep. Rick Becker, a Bismarck Republican who sponsored the measure, said the association's numbers don't show a complete picture of who pays taxes and who it would impact.

“They cherry-pick,” he said. “They’re trying to get people to vote against their interests.”

Becker noted that the overall residential property tax figure, which is at 36%, according to the North Dakota Tax Commissioner's Office, is low. Special assessments and taxes should be considered part of the residential tax, which would bring that figure closer to 42%, he said.

According to the Tax Commissioner's Office, commercial businesses paid 26% of all property taxes, followed by agriculture at 18%.

Becker argued that agricultural land is largely owned by local residents. He said that people don't really own their property unless they pay taxes on it.

Becker claimed that the association's numbers were being used to pressure people, adding that for-profit companies weren't bad. Locals also have businesses that make profits, he said.

“You have to vote in their best interest,” he said of voters.

Birst said property taxes are used by local governments to fund essential services such as law enforcement and fire departments. Proponents of Measure 4 have not presented a plan to cover those costs in the event of a property tax repeal, he noted.

Birst said he suspects foreign companies are in the top three in many counties, but was surprised by the amount paid.

For example, the three largest companies in Oliver County, a wind and coal energy county, contributed 35.5% of the county's $4.1 million in property taxes in 2023, according to the association. That was the highest percentage of total property taxes paid in any county.

The two top performers, Allete ($1.2 million) and NextEra Energy ($160,744), are wind energy companies based in Duluth and Juno Beach, Florida, respectively.

The third largest was Bismarck-based BNI Coal, which paid $94,065.

According to association data, Cass County's top three paid the lowest percentage of their $361 million in property taxes in 2023, at 1.2%. The top two performers were Northern States Power ($1.9 million) and Preylock ($1.6 million), both of which are out of state.

Sanford ranked third with $767,546 in 2023. The company is headquartered in Sioux Falls, SD, although it is listed as a public company on the association's list.

A poll released this month by the North Dakota News Cooperative found that 40% of respondents would vote against Measure 4, while 28% plan to vote yes. With 33% of respondents undecided, NDNC declared the race was too close to decide.