North Dakota Administrative Code

1. General. The payroll factor is a fraction, the numerator of which is the total amount paid in this state during the taxable year by the taxpayer for compensation and the denominator of which is the total compensation paid both within and without this state during the taxable y…

This chapter is applicable to tax years beginning after December 31, 2012. History: Effective April 1, 2014. General Authority: NDCC 57-38-56 Law Implemented: NDCC 57-38, 57-38.1, 57-38.1-18 12

1. "Affiliated corporation" means a corporation whose voting stock is over fifty percent owned, directly or indirectly, by another corporation. 2. "Apportionment factor" means the resulting computation of the percentage of a taxpayer's business income that is assignable to this s…

1. A taxpayer that is a corporation makes a sales factor weighting election by checking the sales factor weighting election box on its original North Dakota income tax return for the first year to which the election applies. 2. A taxpayer that is a sole proprietor apportioning in…

1. If a taxpayer is a member of a unitary business, the sales factor weighting election applies to each taxpayer in the unitary business. 2. If a taxpayer files a consolidated return, the election made on that return applies to all corporations included in that return. 3. An affi…

1. A sales factor weighting election of a taxpayer that has had more than fifty percent of its voting stock acquired by a nonaffiliated entity is rescinded. 2. A sales factor weighting election of a taxpayer formed due to reorganization or spinoff from an existing taxpayer is res…

Administration of the sales factor weighting election is governed by the provisions in North Dakota Century Code chapters 57-38 and 57-38.1, not in conflict with this chapter. 2 History: Effective July 1, 2016. General Authority: NDCC 57-38-56 Law Implemented: NDCC 57-38.1-09…

This chapter applies to tax years beginning after December 31, 2015. History: Effective July 1, 2016. General Authority: NDCC 57-38-56 Law Implemented: NDCC 57-38.1-09 3

An individual income taxpayer with an available overpayment of tax of at least five dollars may designate a portion of the overpayment, as a voluntary contribution, a minimum of one dollar to either or both of the following: 1. The watchable wildlife fund. 2. The trees for North …

The procedure by which the taxpayer's return is originally processed by the tax department may result in adjustments to the available overpayment amount computed by the taxpayer for errors on the return; reduction for taxes, including interest and penalty, owed for prior years; o…

Taxpayers who have a tax balance due, including penalty and interest, of at least five dollars on their income tax return may designate that an additional amount of at least one dollar be paid to the watchable wildlife fund or to the trees for North Dakota program trust fund by p…

A taxpayer with no overpayment of tax of at least five dollars or tax balance due of at least five dollars, may not use the state income tax return to make voluntary contributions. Taxpayers may make contributions directly to the North Dakota game and fish department for the watc…

The retail sales tax is imposed on the gross receipts of retail sales of tangible personal property within North Dakota. The statutes governing sales tax in North Dakota are found in North Dakota Century Code chapter 57-39.2. The use tax is imposed on the storage, use, or consump…

Repealed effective July 1, 2016.

Repealed effective November 1, 1987.

Any person having nexus in North Dakota and making taxable sales in or making taxable sales having a destination in North Dakota must obtain a North Dakota sales and use tax permit from the tax commissioner and collect and remit tax on these sales. For purposes of implementing su…

A sales tax permit will not be issued to a person not engaged in a retail business for the purpose of permitting that person to purchase at wholesale or to purchase without payment of sales tax to the seller. History: Effective June 1, 1984. General Authority: NDCC 57-39.2-19 Law…

The direct payment permit authorizes the applicant to make direct payment of sales or use tax to the tax commissioner. An applicant electing to pay taxes directly to the tax commissioner must issue a direct payment certificate to the retailer in the form prescribed by the tax com…

When the holder of a sales tax permit sells the business to another person, all sales tax for which the holder is liable is due immediately. The holder must immediately notify the tax commissioner and surrender the holder's permit for cancellation. Within fifteen days, the holder…

When a holder of a retail sales tax permit changes the business location of the retail business without changing the nature of the business, the permitholder must notify the tax commissioner of the change of location and of the new address. Upon notification, the tax commissioner…

Compensation for sales or use tax permitholders is applied as follows: 1. A sales and use tax permitholder registered to report and remit sales, use, or gross receipts tax under North Dakota Century Code chapter 57-39.2, 57-39.5, 57-39.6, or 57-40.2 may deduct and retain one and …

1. A sales and use tax permitholder having taxable sales and purchases equal to or exceeding three hundred thirty-three thousand dollars for the preceding calendar year shall file sales and use tax returns and pay the tax due monthly. All returns and tax payments are due on or be…

When retailers of tangible personal property accept deposits from customers for goods to which the purchaser obtains possession only upon payment of the full purchase price, if there is a contract to sell specific goods, title passes to the buyer when the parties to the contract …

Except for contracts for the construction of highways, roads, bridges, and buildings, when an unconditional contract to sell tangible personal property is entered into prior to the effective date of a rate change, and the goods are delivered after that date, the new rates are app…

Freight, delivery, and other transportation charges are considered part of the selling price. If the sale is taxable, the freight, delivery, and other transportation charges that are part of the sale and billed by the seller are taxable. If the product being delivered is exempt f…

Finance, carrying, and interest charges are not taxable if separately agreed upon by the buyer and the seller and if separately billed by the seller to the buyer. History: Effective June 1, 1984; amended effective March 1, 1988; April 1, 2006. General Authority: NDCC 57-39.2-19 L…

The nonreturnable containers in which tangible personal property is sold, when sold for processing, are exempt from sales tax if it is intended that such containers become an integral, ingredient, or component part of tangible personal property intended to be sold ultimately at r…

Receipts from the sale of containers, labels, cartons, packing cases, wrapping paper, wrapping twine, bags, bottles, shipping cases, and similar articles and receptacles sold to manufacturers, producers, wholesalers, retailers, or jobbers, which are used as containers of tangible…

Receipts from sales of taxable materials, supplies, and services to retail stores for their own use in maintenance, advertising, and office use are not for resale and are subject to sales tax. The retailer must pay tax on all items for final use when purchasing them from the supp…

Receipts from the sale of tangible personal property for the purpose of resale by the purchaser are not subject to sales tax if the buyer furnishes a North Dakota resale certificate, the multistate tax commission uniform sales and use tax certificate, or a certificate of exemptio…

Casual or occasional sales made by an individual are not subject to sales tax. Sales made in the course of a regularly conducted business are subject to sales tax. The following are retailers who must collect and remit sales tax: 1. The auctioneer who auctions the belongings of s…

Used or secondhand tangible personal property in the form of goods, wares, and merchandise is taxable in the same manner as new property would be taxed, unless the sale is a casual or isolated one. History: Effective June 1, 1984. General Authority: NDCC 57-39.2-19 Law Implemente…

Persons engaged in the business of selling tangible personal property of others are retailers. Sales are subject to sales tax if such property is sold in the retailer's place of business or is sold by the retailer for an undisclosed principal. This also applies to an auctioneer w…

When one article is traded in on another article, the sales tax applies only on the difference in value between the two articles. The secondhand article is subject to sales tax when resold. Whenever property not subject to sales tax or to motor vehicle excise tax is taken as part…

When tangible personal property which has been repossessed by the original seller or by a finance company is resold, the entire gross receipts from such sales are taxable. When retailers sell tangible personal property on time payments, and it becomes necessary for the retailer t…

When manufacturers, fabricators, or retailers agree to furnish the material and fabricate articles of tangible personal property, the total receipts from the sale of such articles are subject to sales tax. These businesses may not deduct labor or service costs of fabrication or p…

Personal and professional services are not subject to sales tax, but materials and supplies used solely in rendering services are subject to sales tax when purchased. Materials and supplies which may be used either in rendering service or sold at retail may be purchased for resal…

Manufacturing is a process which produces a new article with a different form, use, and name. The modification of articles of tangible personal property is not manufacturing. For example, the creation of steel ducts or I-beams is manufacturing whereas the modification of steel du…

Recycling means collecting or recovering solid waste material and processing it so it becomes a raw material or another product for sale. The recycling process begins at the point where the raw materials are first received at the recycling facility and includes all direct process…

An agricultural commodity processing facility is a manufacturing facility that processes agricultural commodities into marketable products. A facility, such as a grain elevator, that only stores, cleans, dries, or transports agricultural commodities, is not an agricultural commod…

1. Purchases of computer and telecommunications equipment intended for a new primary sector business or a physical or economic expansion of a primary sector business are exempt from sales tax. As used in this section: a. "Computer equipment" means stored program processing equipm…

Repealed effective July 1, 2016.

Conditional sales contracts or other forms of sales, if the payment of the principal sum is to be extended over a period longer than sixty days from the date of the sale, do not include credit sales for which the purchaser is billed in full in intervals of less than sixty consecu…

When a retailer takes merchandise from stock for personal use or for a gift, the retailer is responsible for the use tax based on the cost of the merchandise. Retailers purchasing items for maintenance, advertising, and office use are subject to sales tax and must pay tax on all …

Repealed effective March 1, 1988.

Repealed effective June 1, 2002. 16

Retailers shall include in their taxable receipts the exchange value of coupons or redemption certificates taken from customers, if such coupons or certificates are redeemed by a wholesaler or others. The exchange value of coupons or certificates issued by the retailer as store c…

The sales or use tax liability must be computed by multiplying the sales price of each taxable item or total purchase amount by the appropriate tax rate percentage. If the tax results in a fraction of a cent, the tax liability shall be carried to the third decimal place and round…

Repealed effective April 1, 2006. 17

sales by municipal corporations. Gross receipts from sales of tangible personal property or from furnishing taxable services to this state or any of its political subdivisions, departments, agencies, or institutions are exempt from sales tax. Retail sales or furnishing of service…