Number of North Dakota 'income millionaires' declines
BISMARCK (AP) — Fewer North Dakotans are reporting seven-figure incomes due to a prolonged slump in agriculture and energy prices, the state’s tax commissioner says.
Figures released to The Associated Press show 686 people reported incomes of more than $1 million on their 2016 individual tax returns, a drop of nearly 40 percent from the record 1,120 people in 2014 when the state’s oil boom was at its zenith.
Data show 950 North Dakotans reporting income of more than $1 million in 2015.
“The biggest reason for the drop is the decline in commodity prices,” said Ryan Rauschenberger, the state’s tax commissioner. Oil prices and production peaked in 2014 before “it really started to decline,” he said.
In 2006, when North Dakota’s oil boom was in its infancy, there were 339 so-called “income millionaires.”
Rauschenberger said most of the people reporting seven-figure incomes are in North Dakota’s 17 oil-producing counties. More than half of the oil royalties earned in those counties are paid to mineral owners who live outside of North Dakota and are not reported to the state for tax purposes, he said.
About 90 percent of the drilling in western North Dakota’s oil patch occurs on private land, and property owners often do not own the mineral rights to their land. To profit from oil production, a property owner also must own the land’s mineral rights, which can be sold or leased to an energy developer.
Tax Department data shows reported gross income dropped 6.5 percent in 2016. And the number of people filing dropped by 8 percent as oil field workers left the state.
A total of 461,717 returns were filed in 2016, down from about 492,704 in 2015. The average gross income for 2016 was $67,837, down from $72,276 the prior year and 8 percent lower than the record set in 2014, figures show.