Total Range for 2025
| Base state sales tax rate | 5% | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Local rate range | 0%-3.5% | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Total rate range | 5%-8.5% | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Economic sales nexus threshold | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | |
| Transactions threshold | N/A | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Sales tax return filing due date | Last day of following month | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
The base state sales tax rate in North Dakota is 5%, but since the local rates range from 0-3.5% the total sales tax range is 5-8.5%.
How to calculate your sales tax rate
Use our online sales tax calculator to determine the combined state and local sales tax rate for each location where you have a physical or economic nexus. Just enter your state and ZIP code to get your sales tax rate.
Example of using the sales tax rate in a tax calculation:
If you sell a product for $100 in North Dakota, the sales tax amount would be $5 (100 x 5%). You would collect $105 ($100 + $5) from the customer.
Nexus: Why may you need to collect sales tax in North Dakota?
Similar to other states, North Dakota has both physical nexus and economic nexus rules to determine a business’s obligation to collect sales tax:
- Physical Nexus: Having a physical presence in North Dakota, like an office, warehouse, or employees in the state, triggers this type. If you do, you likely need to collect sales tax.
- Economic Nexus: This kicks in when your sales within North Dakota exceed a certain economic threshold. Even without a physical presence, surpassing this threshold requires collecting sales tax.
In North Dakota, the economic nexus threshold is $100,000 or more of gross sales from deliveries of tangible personal property or services to locations within North Dakota State during the previous twelve months.
Services
- In general, services themselves aren’t subject to taxation in North Dakota.
- However, exceptions exist where a service directly relates to the sale of tangible personal property, and the service charge is integrated into the sales price. In such cases, installation fees for furniture or appliances and delivery charges if not itemized separately.
Goods
- The majority of tangible personal property sold in North Dakota is subject to taxation. This encompasses common items like furniture, sporting goods, etc.
- However, specific exemptions exist, such as: certain unprepared food items (excluding restaurant meals), prescription drugs and medical devices, farm machinery and equipment exclusively used for agricultural production.
Freight/Shipping
- If shipping and transportation charges are itemized separately on the invoice (not included in the product’s sales price), they are generally not subject to taxation in North Dakota.
- Conversely, if shipping and transportation charges are integrated into the sales price of the product and not delineated separately, they are considered taxable along with the product itself.
Clothing
- Clothing is subject to sales tax in North Dakota
Electronics
- Electronics are considered tangible goods and are therefore taxable
SaaS
- SaaS is not taxable in North Dakota
Digital Products
- Sales of electronically delivered items, including specified digital products, are not taxable. These include: digital audio-visual works, digital audio works & digital books
Software
- Electronically delivered prewritten computer software is considered tangible personal property and is therefore taxable.
How to Register for Sales Tax in North Dakota
If you’ve determined you need to collect sales tax in North Dakota, registering for a Sales Tax Certificate is the next step. Here’s how you can do it:
- Online Registration:
The North Dakota Office of State Tax Commissioner offers online registration through their Taxpayer Access Point (TAP) system. This is generally the fastest and most convenient method. Here’s what you’ll need:
- Business name and address
- Contact information
- Federal Employer Identification Number (EIN)
- Business activity start date
- Projected monthly sales and taxable sales
- Products or services offered
- Mail-in Registration:
If online registration isn’t an option, you can also register by mail using an application form (Sales and Use Tax Permit Application – Form ND Revenue 2).
- Download the North Dakota Sales and Use Tax Permit Application (Form ND Revenue 2) from the Tax Commissioner’s website.
- Complete the form following the instructions provided.
- Mail the completed application form along with any required documentation to the address listed on the form.
Whichever method you choose, make sure to have all the necessary information readily available to ensure a smooth registration process.
Additional Notes:
- You may be required to file a surety bond along with your application, depending on your business type and projected sales tax liability.
- Once your application is approved, you’ll receive a Sales and Use Tax Permit with your permit number. You’ll need this number to collect and report sales tax.
How to Collect Sales Tax in North Dakota
Once you’ve registered for a Sales and Use Tax Permit and received your permit number in North Dakota, here’s what you need to know about collecting sales tax:
- Determine the Tax Rate:
The sales tax rate in North Dakota is a single statewide base rate of 5%. There are no additional local sales tax rates imposed in North Dakota.
- Apply the Tax Rate:
Once you know the sales tax rate (5%), simply add it to the taxable sales price of your goods or services to determine the amount of sales tax to collect from the customer.
- Keep Good Records:
It’s crucial to maintain accurate records of your sales and sales tax collected. These records are essential for filing sales tax returns and during any potential audits by the state.
- Report and Remit Sales Tax:
North Dakota businesses are required to file sales tax returns and remit the collected tax on a regular basis. The specific filing frequency depends on your business’s total sales tax liability.
- Generally, businesses with lower sales tax liability will file quarterly, while those with higher liability may need to file monthly.
You can find detailed information on sales tax filing deadlines and remittance procedures on the North Dakota Department of Revenue website or by contacting them directly.
Additional Tips:
- Consider hiring a sales tax wingman to take care of calculations, filing, and remittance, saving you time and ensuring accuracy.
- Stay informed: Sales tax laws and regulations can change, so stay updated on any changes that might affect your business.
How to get a sales tax permit/license in North Dakota?
To obtain a sales tax permit in North Dakota, follow these steps:
- Register Online: Visit the North Dakota Taxpayer Access Point (TAP) on the North Dakota Office of State Tax Commissioner’s website. You’ll need to create an account and complete the online application for a sales tax permit.
- Provide Required Information: During the application, you’ll need to provide details such as your business name, address, Federal Employer Identification Number (FEIN) or Social Security Number (SSN), and information about your business activities.
Once your application is submitted and processed, you’ll receive your sales tax permit, which allows you to collect sales tax on taxable goods and services in North Dakota.
When are sales tax returns due in North Dakota?
In North Dakota, sales tax returns are due based on your assigned filing frequency:
- Monthly: Returns are due on the 20th day of the month following the reporting period. For example, the return for July is due by August 20th.
- Quarterly: Returns are due on the last day of the month following the end of the quarter. For example, the return for the first quarter (January-March) is due by April 30th.
- Annually: Returns are due on January 31st of the following year.
If the due date falls on a weekend or holiday, the return is due the next business day. It’s important to file returns on time to avoid penalties and interest.
Detailed information regarding filing deadlines based on your filing frequency and registration month is available on the Tax Commissioner’s website.
Is anyone exempt from sales tax in North Dakota?
Yes, North Dakota provides several exemptions from sales tax. Key exemptions include:
- Certain Goods and Services:
- Most food items intended for home consumption are exempt from sales tax.
- Prescription medications and specific medical devices, such as prosthetics and wheelchairs, are exempt.
- Farm machinery, tools, and some agricultural supplies used directly in farming are exempt.
- Digital products and SaaS
- Sales for Resale:
- Items purchased for resale are exempt from sales tax if the buyer presents a valid resale certificate.
- Nonprofit Organizations:
- Purchases made by qualified nonprofit organizations are generally exempt, provided they have the necessary exemption certificates.
- Government Entities:
- Purchases made by federal, state, and local government agencies are typically exempt from sales tax.
