North Dakota Administrative Code

If a unit has been incapable of generating electricity for eighteen consecutive months, the tax on that unit for taxable periods beginning after the eighteenth month must be reduced by the ratio that the estimated cost to repair bears to the original cost of the unit. When the un…

The rate reduction calculated for a unit that has been incapable of generating electricity for eighteen consecutive months may not exceed one hundred percent of the tax. History: Effective November 1, 1987. General Authority: NDCC 57-60-12 Law Implemented: NDCC 57-60-01, 57-60-02…

"Taxable synthetic natural gas" does not include synthetic natural gas used within the plant and does not include any amount of synthetic natural gas in excess of one hundred ten million cubic feet per day, over and above that used within the plant. Calculation of any amount of s…

Effective after December 31, 2000, for any given month, the allowed exemption of revenue derived from the sale of byproducts other than the sale of carbon dioxide for use in enhanced recovery of oil or natural gas may not exceed twenty percent of the sum of total gross receipts f…

No source note shall be deemed a promulgation by the commissioner as to the purpose, scope, or effect of any section of this article to which such source note relates. For this purpose "source note" includes any citation to "general authority" or "law implemented" that follows an…

No headnote, cross-reference, or source note, whether designating an entire article, chapter, or section or any part thereof of this article shall constitute any part of a rule. History: Effective July 1, 1982. General Authority: NDCC 57-51-21 Law Implemented: NDCC 57-51, 57-51.1…

As used in this chapter and for the administration of North Dakota Century Code chapter 57-51, unless the context otherwise requires: 1. "Casinghead gas" means gas as produced from a well classified as an oil well by the industrial commission. 2. "Commissioner" means the tax comm…

penalty, and interest. 1. The commissioner will review or audit the returns filed pursuant to North Dakota Century Code chapter 57-51. 2. a. If it is determined that additional tax is due, the commissioner shall notify the taxpayer of this determination within the applicable time…

payments of tax. 1. For purposes of this section, "taxpayer" means the party who has actually remitted an overpayment, duplicate payment, or erroneous payment of tax. 2. A claim for credit or refund must be made by filing an amended return with the commissioner. 3. A claim for cr…

The commissioner does not have the authority to pay interest on a claim for credit of tax. Interest of ten percent per annum must be paid on tax refunds. The daily interest rate is .000277. Interest accrues from sixty days after the due date of the return or after the return was …

credit or refund. 1. Upon receipt of an amended return submitted with a claim for credit or refund, the commissioner shall perform a limited review to determine that tax was paid with a previously filed return and that the amended return is completed properly. 2. Mathematical or …

If the due date for filing a return and paying the tax owed falls on a Saturday, Sunday, or legal holiday, the return and payment are due on the next business day. If a taxpayer is required to file an amended return, this return is due on the date set by the commissioner. A retur…

1. A taxpayer may request that the due date for payment of the tax be extended by a maximum of fifteen days. In addition, a taxpayer may request that the due date for filing a return be extended. However, if tax is due with the return, the due date for filing will only be extende…

penalty. 1. The term "taxpayer" includes any person or entity that is responsible for filing a tax or information return. 2. For purposes of this section, the terms "tax return" and "information return" have the meanings provided in section 81-09-02-01. 3. A taxpayer is subject t…

1. A penalty is imposed on delinquent tax in the amount of five percent of the delinquent tax or five dollars, whichever is greater. This penalty does not apply to delinquent tax reported on an amended return if: a. Ninety percent of the total combined tax liability, reported on …

When produced from and injected into the same well, oil must be reported as production upon recovery after injection. When produced from one well and transported to a second well, oil injected into the second well must be reported as production from the first well and tax is due …

Repealed effective June 1, 2002.

As used in North Dakota Century Code chapter 57-51, "arm's length contract" means a contract or agreement executed by a willing buyer and a willing seller, neither party being affiliated. For purposes of this definition, a contract or agreement between affiliated parties is any c…

1. To determine the volume of gas upon which gross production tax must be paid, the following may be deducted from the total volume of gas produced and must be reported to the commissioner: a. Wet gas and gas products exempt from taxation pursuant to subsection 3 of North Dakota …

1. For the purposes of this section, the following definitions apply: a. "Condensate" means all liquid hydrocarbons recovered from a gas stream in a gathering system after the custody transfer meter but before processing at a gas plant. Condensate is otherwise referred to as "pig…

Repealed effective September 1, 1997.

Repealed effective September 1, 1997.

The volume of oil or gas to be reported is the gross amount of oil or gas produced. When measuring or determining the amount of oil production, a reasonable deduction may be made for basic sediment and water and a reasonable allowance may be made for correction of the temperature…

1. An oil purchaser that has realized a volume gain resulting from differing measurements of the oil must report and pay tax on the volume gain. An oil purchaser that has incurred a volume loss resulting from differing measurements of the oil may utilize the volume loss on a firs…

1. Each operator of an oil pipeline in North Dakota must file a report with the tax commissioner showing its volume gains and volume losses for the calendar year. The report may be filed in the form of the pipeline's "over and short" report compiled during the ordinary course of …

1. A royalty interest in oil or gas is exempt from the gross production tax if the royalty interest is owned by any of the following entities and that entity's immunity from taxation has not been waived by the appropriate governmental authority: a. The federal government or an in…

Any gas taken directly from the wellhead or returned to the lease from a treating or processing plant and used in the production of oil or gas is exempt from taxation. This exemption is for gas used in drilling for or producing oil or gas or repressurization of a reservoir. Examp…

Repealed effective June 1, 2002.

The gas tax rate will be calculated by the following method: 1. An annual average of the gas fuels producer price index, commodity code 05-3, as published by the United States department of labor, bureau of labor statistics, will be calculated by dividing the sum of the monthly g…

1. The purchaser of oil at the well must file a monthly oil purchaser's report, as follows: a. If the purchase of oil at the well is an arm's length transaction, the first purchaser must file the oil purchaser's report. b. If the first purchase of oil at the well is a non-arm's l…

1. The commissioner may waive the producer's requirement to file a monthly oil or gas report. To qualify for a waiver the producer must file an application for waiver with the commissioner. The producer must receive written approval from the commissioner before a waiver of the fi…

All rules and regulations adopted in chapter 81-09-02 for the administration of the oil and gas gross production tax law, not in conflict with the provisions of the oil extraction tax law, shall apply to and govern the administration of the oil extraction tax law. History: Effect…

As used in these sections and for the administration of North Dakota Century Code chapter 57-51.1, unless the context requires otherwise, the following definitions apply: 1. "Completion" or "completed" means an oil well will be considered completed when the first oil is produced …

as separate properties. Repealed effective September 1, 1997.

Repealed effective September 1, 1997.

Repealed effective June 1, 2002.

The exemption for incremental production from a qualifying secondary recovery project starts with the first day of the first month in which incremental oil is produced from the project. History: Effective June 1, 1992; amended effective June 1, 2002; July 1, 2016. General Authori…

1. The exemption for incremental production from a qualifying tertiary recovery project starts with the first day of the first month in which incremental oil is produced from the project. 2. The exemption and rate reduction may be eliminated as of the first day of the first month…

1. Categorization and taxation of production. The unit operator must report on a form prescribed by the commissioner all of the oil produced from the project. The aforementioned production is categorized and taxed in the following manner: a. If the five-year or ten-year exemption…

Repealed effective July 1, 2016.

Oil produced from a stripper well property is exempt from the oil extraction tax. To be eligible for the stripper well exemption, a producer must have its property certified as a stripper well property by the industrial commission and must submit a copy of the certification recei…

Repealed effective July 1, 2016.

Repealed effective July 1, 2016.

Repealed effective July 1, 2016.

Repealed effective July 1, 2016. 4

If a corporation elects to file its federal tax return under subchapter S of the Internal Revenue Code of 1986, as amended, "federal taxable income" means the income or loss as computed on Schedule K of the S-corporation's federal return. History: Effective July 1, 1998. General …

For purposes of computing the receipts factor, "net gains" means the sum of all transactions resulting in gains for a particular category of receipts. If the net result is a loss, the amount included in the receipts factor is zero. Example: Taxpayer sells ten loans or ten pools o…

1. A financial institution as defined in subdivisions a through j of subsection 2 of North Dakota Century Code section 57-35.3-01, which previously reported income under North Dakota Century Code chapter 57-38 on a fiscal year basis, and is now required to report under North Dako…

The tax commissioner shall prescribe the necessary forms and procedures to ensure proper and efficient collection of beer and liquor taxes. History: Effective June 1, 2002. General Authority: NDCC 5-03-05 Law Implemented: NDCC 5-03-04, 5-03-05

No wholesaler shall purchase any alcoholic beverage for resale from any source other than any of the following: 1. The manufacturer, rectifier, distiller, brewer, microbrewer, winery, or domestic winery producing the alcoholic beverage. 2. The owner of the trademark under which t…