Corporate Income Tax

North Dakota Corporate Income Tax Rate

If a corporation elects to use the water's edge method to apportion its income, the corporation will be subject to an additional 3.5% surtax on its North Dakota taxable income.

Prior Year Tax Rates

For the tax rates that apply to corporations for prior tax years, see North Dakota Corporation Income Tax Rates.
 

Filing requirements for non-apportioning ND corporations (business operating solely in the state of ND) are broken out as follows:

• Corporations that do business in North Dakota or have sources of income in North Dakota: Every corporation that does business in North Dakota or has sources of income in North Dakota must file a Form 40 – Corporation Income Tax Return. A signed Form 40 is required along with a minimum of the first 6 pages of the Federal 1120 and any relevant schedules. The return is due on April 15 of each year. Date for fiscal filers is on or before the 15th day of the 4th month following the end of the tax year. (The date may vary if the due date lands on a weekend or state holiday.)
  • Parent and subsidiary corporations that file a federal consolidated tax return must file a state consolidated corporation income tax return using the combined report method.
• Corporation that is tax exempt for federal income tax but has taxable income in North Dakota: A corporation that is tax exempt for federal income tax purposes and has federal unrelated business taxable income (UBTI) is required to file a Form 40 - Corporation Income Tax Return. A signed Form 40 is required along with a Federal Form 990-T. Returns of tax-exempt organizations UBTI are due on the 15th day of the 5th month following the close of the tax year. For cooperatives that the Federal 1120C is required, returns are due on the 15th day of the 9th month following the close of the tax year. (The date may vary if the due date lands on a weekend or state holiday.)
• Corporations that are tax exempt for federal income tax purposes and has no taxable income in North Dakota: A corporation that is tax exempt for federal income tax purposes and has no federal unrelated business taxable income (UBTI) is tax exempt for North Dakota corporate income tax purposes and does not need to file a North Dakota return for that year.

Filing requirements for apportioning ND corporations (businesses doing business in multiple US states) can elect to file in one of the two ways: 

1. The standard method is to utilize the standard apportionable formula, which identifies the percentage of ND property, payroll and sales attributed to the total taxable income. 

   

2. Business can elect to use a 100% sales only factor, which remains in effect for a five-year period.  

Filing requirements for two or more corporations are conducting a unitary business (activities of two or more affiliated corporations depend upon, contribute to, or are integrated with each other) require a unitary combined report which includes:

• The total apportionable income of all members of the unitary group.
• Any/all affiliated corporations that have more than 50% of its voting stock owned directly or indirectly by a common parent, which is also a member of the group

Filing requirements for corporations operating on a world-wide basis follow the unitary concept which means the total apportionable income includes income of all affiliated companies of the unitary group, whether those companies are incorporated within or outside the U.S. A corporation may elect to apportion its income using the water’s edge approach. Under such an election, the corporation must comply with the following:

• The election must be made on the return as originally filed.
• The water’s edge election is binding for five consecutive years.
• The water’s edge report must include the income and apportionment factors of the water’s edge group, 30% of foreign dividends, and 30% of net book income from 80/20 corporations. An 80/20 corporation refers to an affiliated corporation incorporated in the U.S., but having less than 20% of its property and payroll assigned to U.S. locations.
• North Dakota taxable income is subject to an additional 3.5% surtax.

How to File

To find tax forms for the current and previous tax years, visit our Forms Library where you can search by form name, tax type, tax year, and SFN. 

Forms Library 

The Office of State Tax Commissioner offers a variety of E-Filing options for corporations. See more information:

E-Filing for Businesses

To amend a corporate income tax return, complete Form 40X - Amended Corporation Income Tax Return and submit it to the Office of State Tax Commissioner.

You may have extended time to file your North Dakota corporate income tax return by receiving a federal extension or a North Dakota extension.

Filing an Extension

If your corporation is looking to claim a tax credit, a Schedule 38-TC will need to be completed. The following tax credits are available:

• Sales Tax Credits- Agricultural commodity processing facility investment, Biodiesel or green diesel fuel sales equipment
• Income Tax Credits- Angel fund investment carryover (organized and certified prior to 7-1-17), Apprentice, Automation (manufacturing, animal, or agricultural processing), Biodiesel or green diesel production and blending, Developmentally Disabled/Mentally Ill Employee, Employer internship program, Endowment Fund, Maternity home, child placing agency, or pregnancy help center, Mobilized Employee, Non-profit primary, high school or college contribution, Renaissance zone, Research expense, Rural leadership North Dakota program contributions, Seed capital investment, Workforce recruitment
• Property Tax Credits- Geothermal energy device (installed 1-1-09 thru 1-1-15), Housing incentive fund, Renaissance zone 

Make a corporate income tax payment electronically to the Office of State Tax Commissioner by using ND TAP.

Make a Payment

If you are unable to pay using ND TAP, you may pay by check or money order, made payable to North Dakota State Tax Commissioner.

• Complete and print the payment voucher on ND TAP and mail both to the Office of State Tax Commissioner.

Print Payment Voucher

Estimated payments are required if a corporation’s income tax liability is expected to exceed $5,000 for the current taxable year and the previous year’s state income tax liability exceeded $5,000. Use Estimated Income Tax Form 40-ES.

Make an Estimated Payment

Business Codes

The Office of State Tax Commissioner uses the North American Industry Classification System (NAICS codes) to categorize industries for statistical reporting purposes.

Nexus

Nexus means a corporation is present in the state and is subject to a North Dakota tax return filing requirement. North Dakota also conforms to the Multistate Tax Commission’s comprehensive statement regarding nexus.

Form: Nexus Questionnaire Regarding Activities in North Dakota During The Past Ten Years

International Tax Provisions

The Tax Cuts and Jobs Act (TCJA) was enacted on December 22, 2017. The TCJA makes significant changes to the taxation of foreign-sourced income earned by U.S. corporations and their foreign subsidiaries.

See the guidance for North Dakota tax purposes of Internal Revenue Code (IRC) §§ 965 (deemed repatriation of foreign dividends), 951A (global intangible low-taxed income), 250 (foreign-derived intangible income), and 59a (base erosion anti-abuse tax).

International Tax Provisions Guidance

Voluntary Disclosure – Just Learned You Have a Tax Obligation to North Dakota?

The North Dakota Voluntary Disclosure Program allows a taxpayer who has been conducting business activities in North Dakota or has been collecting but not remitting North Dakota sales tax to, voluntarily come forward and resolve potential tax liabilities. The program allows taxpayers to anonymously seek a resolution with the Office of State Tax Commissioner for income, withholding, and sales and use taxes.

Voluntary Disclosure