- Legislation was passed that makes the commemorative memorial coin designed and produced by the North Dakota Department of Veterans’ Affairs available for sale to everyone and exempts sales of the coin made by the Department of Veterans’ Affairs from sales tax.
- The deadline to receive the permit or notice that the permit process is complete was extended to June 30, 2023 for a sales and use tax exemption for tangible personal property used to construct or expand certain chemical or fertilizer plants if the plant had received the required air quality permit or a notice from the State Department of Environmental Quality.
- Legislation created a new sales tax exemption for tangible personal property used to construct or expand a qualified straddle plant, a qualified fractionator, or qualified associated infrastructure located within North Dakota.
- Legislation expanded a sales and use tax exemption for tangible personal property used to construct or expand a system used to compress, gather, collect, store, transport or inject carbon dioxide for use in enhanced recovery of oil and gas to include tangible personal property used to construct or expand a system that provides secure geologic storage of carbon dioxide.
- Legislation was passed that includes several amendments to assist with administration of the sales and use tax laws, including distinguishing between children’s diaper and supplies used by a person with bladder dysfunctions and allowing the tax commissioner to waive the monthly filing requirement for sales tax permit holders that report more than $333,000 of taxable sales and purchases in the previous calendar year upon request and for good cause shown.
- Legislation was created to provide for a trade-in credit against the purchase price of a replacement watercraft that was stolen or totally destroyed.
- Remote sellers need to consider only the $100,000 taxable sales threshold in the previous or current calendar year to determine if tax collection is required by statute, as the 200 or more taxable sales transactions into the state in the previous or current calendar year was repealed.
- Legislation clarified that when a remote seller meets or exceeds the taxable sales threshold, that seller is required to register and begin collecting tax the next calendar year or 60 days after the sales threshold is met, whichever is earlier.
- Legislation was passed that authorizes counties to impose a county lodging tax of up to 2% and a separate lodging and restaurant tax of up to 1%.
- New legislation authorizes the governor, in consultation with the tax commissioner, to enter into an agreement with any, or all of, the five North Dakota Indian Tribes for administration of a tribal sales tax.
- Legislation was passed that defines marketplace, marketplace seller and marketplace facilitator, and requires out-of-state marketplace facilitators with no physical presence in North Dakota to collect sales or use tax on all North Dakota sales made through the facilitator’s marketplace if the total taxable North Dakota sales made on behalf of all marketplace sellers by the marketplace facilitator exceed $100,000 in the current or previous calendar year. A marketplace facilitator that meets the $100,000 threshold for the first time in 2019, is required to register and collect beginning October 1, 2019, or sixty days after the threshold is met, whichever is earlier.
- A new motor vehicle excise tax exemption was created for all vehicles in the possession of and used exclusively by public transportation providers that contract with the North Dakota Department of Transportation to provide public transportation services under North Dakota Century Code § 39-04.2-04.
- Legislation was passed that increases the amount of trade-in credit allowed against the purchase price of a replacement vehicle that was stolen or totally destroyed to equal the amount of compensation paid by the insurance company plus the amount of the policy deductible.
- Legislation was passed that expands the exemption for vehicles in the possession of and used as a bus exclusively by a nonprofit senior citizens’ or handicapped persons’ corporation to include any motor vehicle owned by a nonprofit senior citizens’ or handicapped persons’ corporation for transportation of the elderly or disabled as long as the vehicle is not used for commercial activities.
- Legislation was approved to require out-of-state retailers without a physical presence within the state to collect sales or use tax on the sale of taxable goods and services if the out-of-state retailer had North Dakota sales exceeding $100,000 or 200 or more separate transactions. The bill will be effective on the date the United States Supreme Court overturns Quill vs. North Dakota, 504 U.S. 298 (1992), or otherwise confirms a state may constitutionally establish a similar economic nexus standard.
- The prepaid wireless emergency 911 fee rate was increased from 2 to 2.5%.
- The definition of farm machinery qualifying for the 3% farm machinery gross receipts tax was expanded to include machinery and equipment that is installed into real property and used directly in the collection, handling, storage, heating and cooling operations of a dairy farm milking operation.
- The law pertaining to the legislature’s requirement to study all tax incentives during legislative interims was modified to allow the Tax Commissioner, upon request from Legislative Management or a legislative committee, to disclose certain tax incentive data even though only few taxpayers may have claimed the incentive. Specific taxpayer identification information would remain confidential.
- A sales and use tax exemption was authorized for equipment brought temporarily into the state by an out-of-state business without a previous business presence in North Dakota to perform work related to repairing critical infrastructure for a declared disaster. (Certain income tax exemptions were also approved for businesses and their employees performing the repair work.)
- Legislation was passed to require denial of a tax incentive if a taxpayer is delinquent on a state or local tax. If a state tax incentive is claimed, the taxpayer must certify it is not delinquent on any city or county sales taxes or property tax to any county in which it owns property. If a local tax incentive is applied for or claimed, the taxpayer must certify it is not delinquent on any property taxes or state taxes. The requirement applies to the tax incentives listed in N.D.C.C. § 57-35-26.
- The legislature authorized the governor to elect to enter into an agreement with the governing body of the Standing Rock Sioux Tribe for administration of tribally imposed sales, use, and gross receipts taxes on the North Dakota portion of the Standing Rock Sioux Reservation. To enter into an administration agreement, the Standing Rock Sioux Tribe is required to impose taxes on the reservation that are identical to the state’s taxes. Under the agreement, tax revenue collected from transactions on the reservation will be allocated 80% to the tribe and 20% to the state general fund.
- Effective July 1, 2015, a retailer that leases or rents tangible personal property must disclose if it paid sales or use tax on the purchase price of the property leased or rented. The disclosure must appear on the customer’s invoice, contract, lease agreement, or other supporting sales document.
- The legislature authorized an annual transfer of $500,000 from farm machinery gross receipts tax to the Agricultural Research Fund.
- Sales tax exemptions for new and expanding businesses were created for:
- Enterprise information technology equipment and computer software used by a qualifying new or refurbished data center. The exemption is available to the first four qualifying data centers constructed or refurbished between January 1, 2015 and December 31, 2020.
- Tangible personal property used to construct or expand fertilizer and chemical processing plants that use natural gas, natural gas liquids, or crude oil components as feedstock. To qualify, a proposed plant must receive before July 1, 2019 an air quality permit from the state department of health or a notice that the air quality permit application process is complete.
- Tangible personal property used to construct or expand a system used to compress, gather, collect, store, transport, or inject carbon dioxide for use in enhanced recovery of oil or natural gas.
- The sales tax exemption for new coal mines was expanded to include machinery and equipment purchased after December 31, 2010 and used indirectly in the production of coal from a new mine.
- The legislature approved a sales tax exemption for internet access service effective July 1, 2017.
- Motor vehicle excise tax exemptions were created for vehicles transferred from a grandparent to a grandchild and for vehicles donated to a nonprofit 501(c)(3) corporation that has an established program for the purpose of receiving vehicles for the purpose of donating the vehicle to an individual with demonstrated need. Both exemptions are effective July 1, 2015.
- The legislature created new sales tax exemptions for tangible personal property used in the construction or expansion of facilities that produce liquefied natural gas and facilities that extract or process by-products associated with a coal gasification plant. The existing exemption for a wind-powered electrical generating facility was extended to include plants completed before January 1, 2017. The exemption for tangible personal property used to construct or expand a telecommunication infrastructure was extended through June 30, 2017 and the exemption for tangible personal property used to build or expand a gas compressing, gathering, or processing system was expanded to include a system that “collects” gas from oil or gas wells.
- Effective July 1, 2013, new manufactured homes that are sold with installation are treated as construction contracts.
- The legislature revised the method of imposing farm machinery gross receipts tax on equipment leases for periods of more than eleven months. Effective July 1, 2013, the lessor must pay sales tax on its purchase price of qualifying farm machinery and farm irrigation equipment or collect tax on three years of lease payments regardless of the lease term. In addition, a farmer may receive a trade-in credit for the value of replacement equipment owned or leased when entering into a new lease.
- The legislature authorized sales tax refunds of up to $2,500 per household on residential property that was replaced due to 2011 river flooding.
- Effective January 1, 2014, sales tax permit holders that reported $333,000 of taxable sales and purchases in the previous calendar year must file returns electronically.
- Compensation for sales tax permit holders was increased from $93.75 to $110 a return.
- The legislature defined “automated sales suppression device,” “zapper,” and “phantom-ware” and made it a felony to sell, purchase, possess, install, transfer, manufacture, own or use these products except for legitimate purposes.
- The legislature imposed a 2% fee on prepaid wireless telecommunications services. The fee must be used for implementation, maintenance, or operation of the emergency services communication systems.
- The legislature modified the formula that determines the portion of sales, use, farm machinery and alcohol gross receipts, and motor vehicle excise taxes deposited into the State Aid Distribution Fund. Effective July 1, 2014, the formula increased the State Aid Distribution Fund’s share from 8% to 8.7% of the total sales, use, gross receipts, and motor vehicle excise taxes collected. The balance of collections is deposited into the General Fund.
- The legislature created new sales tax exemptions for the purchase of machinery and equipment used to produce coal from a new mine, the gross receipts from memberships and entrance fees to activities and events organized and operated by nonprofit social and recreation clubs organized under section 501(c)(7) of the Internal Revenue code, the purchase of equipment used by licensed special fuel dealers to sell green diesel, and for agrichemical tank cleaners and foam markers used by farmers.
- New motor vehicle excise tax exemptions were also created for vehicles transferred without consideration from a revocable living trust back to the trustor, for vehicles purchased by unremarried surviving spouses of disabled veterans that are receiving Veterans’ Affairs dependency and indemnity compensation, and for vehicles transferred back to the original owner if the vehicle was previously exempted from tax under a business reorganization.
- An aircraft excise tax exemption was created for aircraft acquired by a nonprofit aviation museum located in North Dakota and exempt from federal income tax under Internal Revenue Code section 501(c)(3).
- Compensation for sales tax permit holders was expanded to include all retailers that file a sales and use tax return and the maximum compensation allowed on each return was increased from $85 to $93.75.
- The legislature repealed the requirement for permit holders that reported more than $333,000 of taxable sales or purchases in the previous calendar year to file the May monthly sales and use tax return at the end of each biennium by June 22.
- The legislature created an exemption for farm irrigation repair parts and extended the exemption on production equipment or tangible personal property used to construct a wind-powered electrical generation facility on construction completed before January 1, 2015.
- Effective July 1, 2009, the initial sale of beneficiated coal became exempt from sales tax.
- Clarified the exemption passed in the 2007 legislature to exempt tangible personal property used to compress, process, gather, or refine gas from both gas and oil wells. The tangible personal property must be incorporated into a new or expanded system.
- Effective July 1, 2009, purchases of tangible personal property purchased to construct or expand a telecommunications service infrastructure is exempt from sales tax. Telecommunications company is defined as a person engaged in furnishing telecommunications service in North Dakota.
- Native American tribal governments will be exempt from sales tax effective July 1, 2009. Qualifying tribal governments are not entities or agencies that exist to primarily operate a business enterprise and are still taxable.
- The legislature expanded the sales tax exemption for residents of Montana to include Montana business entities which are domestic Montana corporations or other entities where the owners, partners, members are individual Montana residents or Montana corporations.
- A new exemption was created for specified digital products.
- The Department of Transportation was authorized to determine the fair market value of a motor vehicle lease for the purposes of calculating the amount of motor vehicle excise tax due.
- The legislature exempted coal used for heating purposes and reduced the tax rate on natural gas from 2% to 1% beginning January 1, 2008. Natural gas became exempt effective July 1, 2009.
- The sales tax exemption available to Native Americans was expanded to include enrolled members of any federally recognized tribe.
- The legislature authorized retailers to voluntarily cap the amount of local tax collected for a city or county that imposes a maximum tax amount.
- New exemptions were authorized for the sale of bingo cards, materials purchased and used to gather, compress, and process gas and materials used to build or expand a gas processing facility or oil refinery.
- An exemption was also authorized for materials used to construct a new category of electrical generating power plants.
- New motor vehicle excise tax exemptions were also approved for ambulances purchased for use by emergency medical service operators, vehicles purchased by the state lottery to be awarded as a prize, and certain purchases of vehicles by disabled veterans. In addition, the exemption from motor vehicle excise tax for Native Americans was expanded to include motor vehicles delivered within North Dakota if the enrolled member resides on a North Dakota reservation.
- The legislature authorized cities to impose a tax up to 1% on the rental of motor vehicles for less than 30 days.
- The legislature also reduced the sales tax rate on the rental of hotel, motel, and tourist court accommodations (excluding bed and breakfast facilities) from 6% to 5% and imposed through June 30, 2007 a separate 1% gross receipts tax on these accommodations.
- New exemptions were created for purchases made by assisted living facilities and emergency medical service providers, purchases of CO2 used for enhanced oil recovery, retail purchases of equipment used to sell biodiesel fuel, retail purchases of hydrogen to power internal combustion engines and fuel cells and equipment used to produce and store hydrogen.
- Exemptions were also created for the portion of a bundled telecommunications charge that is attributable to nontaxable services, sales of precious metal bullion, and purchases after June 30, 2007 of equipment used in an environmental upgrade of an oil refinery or gas processing plant.
- The legislature also finalized the changes necessary to be in full compliance with the Streamlined Sales Tax Agreement effective October 1, 2005.
- The legislature removed farm machinery, farm irrigation equipment, and alcoholic beverages from the sales tax base and imposed separate gross receipts taxes on these products.
- The legislature increased the tax rate on the rental of hotel, motel, and tourist court accommodations (excluding bed and breakfast facilities) from 5% to 6% from July 1, 2003 through June 30, 2007.
- New exemptions were created for purchases made by Commerce Authorities, purchases of raffle prizes made by charitable organizations when the prize winner is responsible for the tax, and on sales of lottery tickets.
- The legislature adopted the Streamlined Sales Tax Agreement effective January 1, 2006.
- The 75 cents per ton sales tax on out-of-state coal was repealed.
- The legislature exempted used farm machinery, used irrigation equipment, and new and used farm machinery repair parts.
- The power plant exemption was expanded to include wind-powered electrical generating facilities and a new exemption was created for computer and telecommunication equipment purchased by new or expanding primary sector businesses other than manufacturers or recyclers.
- Sales tax was imposed on all vehicle rentals of less than 30 days at a rate of 5% and an additional 3% surcharge was imposed on vehicles weighing less than ten thousand pounds.
- The rate of penalty applied to delinquent sales tax returns was changed to 5% per month up to a maximum of 25%.
- The method of imposing motor vehicle excise tax on leased vehicles (cars and light trucks) was changed from paying tax on the lessor's purchase price to paying tax on the total lease consideration.
- The legislature changed the 6 cents per million British thermal units (MBTU) sales tax rate on coal to 75 cents per ton.
- The sales tax rate on used farm machinery, used irrigation equipment, and new and used farm machinery repair parts was reduced from 3% to 1.5%.
- The exemption on manufacturing machinery and equipment was expanded to include crude oil refineries for the period February 1, 1999 through July 1, 2002.
- The legislature provided for corporations and LLCs to post a cash or surety bond in lieu of personal liability of the corporate offices, governors or managers.
- The legislature approved a sales and use tax of 6 cents per million British thermal units (MBTU) on all sales of coal, except for coal used for heating buildings or used in agricultural processing or sugar beet refining plants, or coal exempted from the tax imposed by N.D.C.C. ch. 57-61.
- An exemption was provided to a political subdivision of another state provided a sale to a North Dakota political subdivision is treated as an exempt sale in that state.
- Tire retreading was made taxable.
- The tax on controlled substances and the waste collection surcharge were repealed.
1994 Special Session
- The manufacturing exemption was expanded to include research and development equipment.
- A new exemption was created for materials used to construct an agricultural commodity processing facility.
- The Capital Construction Fund was repealed.
- An exemption was created for recycling machinery and equipment.
- Performances of community non-profit music or dramatic arts organizations held in a public facility were exempted.
- Items purchased by political subdivisions of another state were made taxable if the other state also taxes the items.
- A new highway contract privilege tax was established at 5% of the gross contract amount for contracts bid after July 31, 1993. This tax terminated December 31, 1997.
- The legislature approved a gradual decrease in the rate on natural gas from 5% to 4% on January 1, 1993; to 3% on January 1, 1994; and to 2% on January 1, 1995.
- The 3% special rate for manufacturing equipment was changed to an exemption and an exemption was created for production equipment in coal-burning power plants.
- The legislature approved the Taxpayer Bill of Rights.
- The destination of aircraft excise tax revenue was changed from the State General Fund to the Aeronautics Commission Special Fund.
- A waste collection surcharge was imposed.
1989 Referral Election
- The general sales and use tax rate and the motor vehicle excise tax rate were reduced from 6% to 5%.
- The rate on farm machinery, irrigation equipment, farm machinery repair parts and new mobile homes was reduced from 4% to 3%.
- The rate on alcoholic beverages remained at 7%.
- The general sales and use tax rate and the motor vehicle excise tax rate was increased from 5.5% to 6%.
- The rate on farm machinery, irrigation equipment, farm machinery repair parts, and new mobile homes was increased from 3.5% to 4%; and the rate on alcoholic beverages was increased from 6.5% to 7%.
- The legislature created a new rate of 3% on machinery and equipment used in manufacturing or in processing agricultural products.
- The tax base was broadened to include bingo cards, coffee, tea, cocoa, and certain bottled water. State chartered credit unions lost the sales tax exemption on items purchased for their own use.
- The existing exemption for residents of Montana was modified and the exemption for residents of Canada was replaced with a refund provision.
- An exemption was created for prepared food given away as samples in a grocery store.
- A portion of sales, use and motor vehicle excise tax collections was allocated to the Capital Construction Fund. The legislature enacted a controlled substances tax.
- The legislature increased the general sales and use tax rate and the motor vehicle excise tax rate from 5% to 5.5%; the rate on farm machinery, irrigation equipment, farm machinery repair parts and new mobile homes from 3% to 3.5%; and the rate on alcoholic beverages from 6% to 6.5%.
- The legislature added cable TV services to the tax base. [However, in a 1988 referred measure, the cable TV provision was rejected and did not take effect.]
- Exemptions were created for flight simulators, annual church suppers and bazaars, and adjuvants used with farm chemicals. The legislature required use tax collection by those who solicit sales by mail or other communication systems.
- Effective July 1, 1989 a portion of the sales, use, and motor vehicle excise tax collections was allocated to the State Aid Distribution Fund to finance revenue sharing and personal property tax replacement.
- Cities were granted authority to impose a 1% lodging and restaurant tax.
1986 Special Session
- The general sales and use tax rate and the motor vehicle excise tax rate was increased from 4% to 5%.
- The rate on farm machinery repair parts was lowered from 4% to 3%, and the rate on alcoholic beverages was increased from 5% to 6%.
- No change was made in the 3% rate for farm machinery, irrigation equipment, and new mobile homes.
- Exemptions to the sales and use tax law were added for sales to hospitals and for ostomy devices and supplies.
- The exemption for devices to aid the handicapped was expanded.
- Exemptions for sales of candy, pop and chewing gum were repealed.
- The legislature authorized home rule counties to contract with the Tax Commissioner to collect county sales and use taxes.
- The general sales and use tax rate and the motor vehicle excise tax rate were increased from 3% to 4% and the rate for farm machinery, irrigation equipment, and new mobile homes was increased from 2% to 3%.
- The legislature increased the rate for alcoholic beverages from 3% to 5%.
- The requirements for remittance of sales and use tax were changed from a quarterly basis to a monthly basis for businesses with taxable sales and purchases greater than $333,000 in the preceding calendar year. Retailers required to file on a monthly basis were given a deduction for administrative expenses.
- The tax on aircraft sales was changed from the sales tax to a separate aircraft excise tax.
- The sales and use tax on water, used mobile homes, and magazine subscriptions was eliminated.
- The tax rate on new mobile homes was reduced from 3% to 2%.
- Cities were permitted to levy a 2% city lodging tax.
- The legislature authorized home rule cities to contract with the Tax Commissioner to collect city sales and use taxes.
1976 Initiated Measure
- An initiated measure reduced the sales and use tax rate and the motor vehicle excise tax rate from 4% to 3%, reduced the rate on farm machinery and irrigation equipment from 4% to 2%, and eliminated the tax on electricity.
- Exemptions were added for sales of artificial devices for handicapped persons, coal, sales to nursing homes and intermediate care facilities, and the sales of certain religious books to nonprofit religious organizations.
- Food purchased for off premises consumption was exempted from the sales and use tax.
- Sales tax, use tax, and motor vehicle excise tax rates were increased from 3% to 4%. The increase was used to replace revenue lost to local governments by the repeal of the personal property tax.
- The sales tax base was broadened to include tobacco products, alcoholic beverages, and oleomargarine.
- New sales and use tax laws were enacted imposing a 3% tax on the same sales transactions that were in effect through the 1963 sales tax law.
- The legislature enacted a separate 3% motor vehicle excise tax.
1965 Referred Measure
- The sales tax law was referred and disapproved. Consequently, during the period July 1, 1965 to April 1, 1967 use tax was collected in place of the disapproved sales tax.
- The sales and use tax rate increased from 2% to 2.25%.
- A 2% general use tax was enacted.
- The first general sales tax in North Dakota was enacted at a rate of 2%. The tax base generally consisted of all sales to consumers of personal property; sales or service of gas, electricity, water and communication; and sales of tickets to places of amusement.