North Dakota Sales Tax

North Dakota sales tax laws require taxable businesses to register, collect, and remit sales and use taxes.

North Dakota Sales Tax is 5%, and local taxes are imposed by cities and counties on some items. Some products and services are exempt from sales tax, including janitorial services and transportation services. The laws and rules are complex, so it’s important to stay up to date.

If you are a retailer with sales tax obligations in North Dakota, you must register and collect sales and use tax if your gross sales into the state exceed $100,000 or 200 separate transactions. In addition, out-of-state retailers with no physical presence in the state may be required to collect sales tax if they have economic nexus in the state.

The sales tax compliance process can be complicated, and mistakes are costly. A sales tax automation software solution can help you simplify and streamline your sales and use tax collection and reporting processes. Avalara AvaTax seamlessly integrates with the business systems you already use to deliver accurate sales and use tax calculations in real-time.

How to File North Dakota Sales Tax?

If you are a business in North Dakota, you must collect sales tax on all taxable purchases made by customers in the state. You must also file and remit the collected sales tax to the Office of State Tax Commissioner on a timely basis. Failure to do so can result in penalty fees.

When you register to collect sales tax, the Office of State Tax Commissioner will assign you a filing frequency. This is typically based on your sales volume, with larger businesses being asked to file more frequently. Returns and payments are due on the last day of the month following your reporting period, unless that date falls on a weekend or holiday.

In addition to sales tax, you must also pay use tax on all taxable items you bring into the state for storage, use, or consumption. This includes tangible personal property such as merchandise, equipment, building materials, and services like janitorial and transportation services. However, many services are exempt from sales and use taxes in North Dakota, including most nonprepared foods and prescription medicine.

North Dakota Sales Tax Update

North Dakota Sales Tax 2024 Update

North Dakota has a state sales tax of 5% for most retail purchases. Local taxes, such as city or county taxes, also may apply. You can check local tax rates on the Office of State Tax Commissioner’s website. Several states also have sales tax holidays, during which time you don’t need to charge buyers the tax.

The 2024 North Dakota approved budget includes:

  • A permanent increase in funding for the “Big Three” state obligations.
  • A temporary reduction in the state sales tax on groceries.
  • 100% tuition coverage for National Guard members.

Gov. Kristi Noem threatened to veto the spending package last month because it doesn’t include a sales tax cut she promised voters during her reelection campaign.

North Dakota Sales Tax Exemption

Some goods are exempt from sales tax in North Dakota, including most nonprepared food items, prescription drugs and medical supplies, and farm equipment, seeds, and fertilizers. The state also has special rates for energy and manufacturing. You can use a calculator to find out the sales tax rate for a particular zip code. In addition, North Dakota is a member of the Streamlined Sales and Use Tax Agreement, so you can use a blanket resale certificate on purchases from vendors in other states.

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