The State Board of Equalization assesses all real property used in the operation of a railroad; all personal property is removed from the system value. Personal property includes locomotives, rail cars, vehicles, assembled workforce, computer software, etc.
A share of the system value is allocated to North Dakota according to gross revenues, revenue traffic units, and car and locomotive miles. Both the cost approach and income approach are used to assess the true and full operative value.
Under North Dakota Century Code 57-02-26, all railroad real property leased to others for a term of years is subject to local assessment and valuation as if the lessee were the owner.
The annual reports are due May 1st of each year.
Tax Rate
To determine the tax for railroad property, the true and full operative value is multiplied by 5% to get the taxable value, it is then multiplied by the local mill rate. A mill is 0.1% or 1/10 of a percent, in order to calculate you take 0.001 times your taxable value and multiply that by your total mills to identify your total tax owed.
For example, let's identify the property tax for a railroad that is worth $1,500,000 (true and full value) located where your local taxing entities total 250 mills.
- Railroad True and Full Operative Value x 5%= Taxable Value. ($1,500,000 x .05 = $75,000)
- Taxable Value x mill = Mill Rate. ($75,000 x .001= $75)
- Mill Rate x # of taxable mills= Total Tax Owed. ($75 x 250 = $18,750)
The total tax owed on a railroad worth $1,500,000 with a 250 mill levy would be $18,750.
How to Appeal
Appeals must be directed to the State Board of Equalization. If any company is aggrieved by any assessment of omitted property made by the tax commissioner under this chapter, it has the right to appeal to the State Board of Equalization for a review of such assessment. Such appeal must be taken by filing a notice of appeal with the tax commissioner within thirty days after the hearing date specified in the notice provided by section 57-07-02.
Tax Incentives
There are no property tax incentives for this tax type, but there may be certain income or sales tax incentives that apply.
Payment Options
Property tax is a cumulation of different taxing entities and authorities. These various forms of local government include your county, city, township, school board, park board and any other entity that is authorized to levy property taxes. Although property taxes are payable to the county in which you reside, it is important to note that the funds are distributed as shown in the mill levy breakout on your statement