A taxpayer is allowed an income tax credit for the purchase or capital lease of new or used automation and robotic equipment that upgrades or advances a manufacturing process or animal agricultural process, resulting in improved job quality or increased productivity in North Dakota.
Qualifications
Businesses who have been certified as a primary sector business with machinery and equipment that has been approved by the North Dakota Department of Commerce Division of Economic Development and Finance. Property Tax Clearance Record form required.
Credit Amounts
The credit is equal to 15% of the purchase cost or the equipment’s fair market value if it is a capital lease. Unused credit may be carried forward up to five tax years. If the taxpayer is a passthrough entity, the credit is passed through to its owners based on their respective interests in the entity. The credit allowed to a corporation included in a consolidated North Dakota income tax return may be used to reduce the aggregate tax liability of all corporations in the return.
The total statewide credits allowed for all qualifying purchases by all taxpayers is limited to $3 million per calendar year. This amount is prorated among the taxpayers if the qualifying purchases result in credits exceeding $3 million. If the total amount of credits earned for a year is less than $3 million, the unused portion is added to the following year’s $3 million limit. Applications are due January 31 for purchases in the preceding calendar year. Of the $3 million annual amount, $500,000 in tax credits are reserved each year for first-time claimants for automation equipment and $500,000 for first-time claimants for animal agricultural equipment.
Application Process
Certification through the Department of Commerce Division of Economic Development and Finance.
How to Claim
If you're filing as a/an: | Claim the credit on: |
| Individual or Sole Proprietor | Schedule ND-1TC, Tax Credits |
| C Corporation | Form 40, Corporation Income Tax Return Schedule TC |
| S Corporation | Form 60, S Corporation Income Tax Return Schedule K |
| Partnership | Form 58, Partnership Income Tax Return Schedule K |
| Fiduciary | Form 38, Fiduciary Income Tax Return Schedule 38-TC |