When you’re starting a new business, it can be overwhelming to know where to begin. We’re here to help you understand your tax responsibilities.
Determine how you would like to operate your business – choices may include a sole proprietorship, LLC, partnership, corporation, or S corporation.
- If you are a Sole Proprietor you will need to register the trade name or “doing business as” name with the North Dakota Secretary of State. If you are an LLC, corporation, partnership, or S-corporation you also need to register with the North Dakota Secretary of State.
Determine what products or services you will be selling and if they are subject to sales tax – Explore Sales Tax Guidelines. If they are, you need to apply for a North Dakota Sales Tax Permit. When you apply for a sales tax permit, you’ll also apply for a North Dakota Withholding Tax account if your business has employees.
If your business issues W2's or 1099's to employees, you must apply with the IRS for a Federal Employer Identification Number, if you do not already have one.
As a North Dakota business with employees, you may also need to contact:
- Job Service North Dakota – Unemployment
- Workforce Safety and Insurance – Workers’ Compensation
The Secretary of State’s New Business Registration website shares information about building your business, registering your business, licensing information, sales tax requirements, and more.
If you have tax questions as you're starting your business, please feel free to contact us.
Here is more information regarding your specific type of business and the taxes that may affect you:
A business privilege tax is imposed on alcohol and beer at the wholesale level. A privilege tax is a tax that is paid for a license or opportunity to provide a service. Alcoholic beverage wholesalers, domestic wineries and distilleries, microbrew pubs, brewer taprooms, and out-of-state direct shippers pay alcohol tax.
Alcohol tax applications are available on ND TAP.
Wholesales who purchase, sell, or bring cigarettes or tobacco products into the state for resale; retailers who sell untaxed cigarettes or tobacco products to consumers; and individuals who purchase untaxed cigarettes or tobacco products for personal consumption online or from sources outside of North Dakota pay cigarette and tobacco products tax.
Payments can be made using ND TAP.
An employer is required to withhold North Dakota income tax from wages paid to an employee, if the employee performs services in North Dakota or if the business is based in North Dakota. If you plan to have employees in your business, you need to apply for an income tax withholding account.
Income tax withholding applications are available on ND TAP.
Local lodging and restaurant tax is collected on short-term lodging rentals for a city or county. An additional tax may be imposed on the rental of lodging and sales of prepared food and beverages. The governing body of any city or county may, by ordinance, impose a city or county tax.
More information about local taxes is available in the sales and use tax section of our website.
North Dakota imposes a fuel tax on motor vehicle fuel (gas, gasoline), special fuel (diesel, dyed diesel, natural gas, CNG, LNG), and aviation fuel (jet fuel). All refiners, terminal operators, suppliers, distributors, importers, exporters, or retail fuel locations on a Native American Reservation in North Dakota require a license before operating.
Motor fuel tax applications are available on ND TAP.
Oil and gas production tax is imposed in lieu of property taxes on oil and gas producing properties in North Dakota.
More information about oil and gas tax is available on our website.
Prepaid wireless 911 fees must be collected by a seller at the time of sale from the purchaser of the prepaid wireless service. A prepaid wireless service is a mobile wireless telecommunication service, which includes downloading digital products and content. Businesses who sell prepaid wireless services need a sales tax account and an account to report the prepaid wireless 911 fee with the Office of State Tax Commissioner.
Sales tax account applications are available on ND TAP.
A business is required to withhold royalty withholding from royalties paid to owners of oil or gas produced in North Dakota. To register for royalty withholding, please submit an Application to Register for Royalty Withholding to the Office of State Tax Commissioner.
More information about royalty withholding is available on our website.
North Dakota has a sales tax on the gross receipts of sellers. Gross receipts means the total amount a seller receives from selling a good or service without subtracting any costs or expenses. The sales tax is paid by the purchaser and collected by the seller. Cities and counties may also impose a local tax, which is administered by the Office of State Tax Commissioner.
The sales and use tax permit application is available on ND TAP.
North Dakota imposes a gross receipts tax on all telecommunication companies. Gross receipts means the total amount a seller receives from selling a good or service without subtracting any costs or expenses. Telecommunications companies must submit the Telecommunications Gross Receipts Tax form to the Office of State Tax Commissioner on or before May 1.
More information about telecommunications tax is available on our website.
Exemptions and Incentives
- The North Dakota Tax Incentives for Businesses Booklet includes information about tax exemptions and credits.