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Tax filers, income drop in North Dakota during pandemic

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Capitol in frost

Frost blankets the state Capitol grounds in Bismarck.

Reported income by all North Dakota residents and the number of filers dropped last year largely due to the coronavirus pandemic, the state Tax Department reported.

Figures released to The Associated Press show the reported gross income by North Dakotans dropped by 8.4% in 2020, while the number of filers dropped by more than 18,000 from the year before.

Tax Department records show the average adjusted gross income in the state decreased from $65,829 in 2019 to $62,696 last year, a nearly 5% drop.

“Given the COVID-related shutdowns, and the weeks of negative oil prices, a drop of 5% in average income per return is not nearly as bad as we anticipated,” Tax Department analyst Kathy Strombeck said.

North Dakota’s oil industry has helped increase wages throughout the state and created hundreds of high-paying jobs for more than a decade. It also has an effect on other industries, including wholesale trade and manufacturing.

The numbers are still well above the pre-oil boom numbers a decade ago. In 2006, there were 339,000 filers, with an average adjusted gross income of about $43,300.

North Dakota has about 18,500 online job openings at present, according to Job Service North Dakota. Gov. Doug Burgum and other state officials often say the actual number is closer to 30,000.

Although the state’s economy has been hurt by the lack of workers, a growing population and rebounding oil prices have helped keep tax collections at near-record levels.

Oil prices are a key contributor to the wealth of North Dakota and the state’s crude production has recovered somewhat from last summer’s lows, but it’s far from the record 1.5 million barrels per day produced in late 2019.

North Dakota's oil production was about 1.1 million barrels per day in September, the latest figures available.

Prices for North Dakota crude were 32% higher than in the state’s tax revenue forecast. The state’s population is estimated to be a record 779,000, which would mean it has grown by 16% over the past decade.

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