Payments in Lieu of Property Tax

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North Dakota offers the following payments in lieu of taxes for businesses. 


Coal Conversion Facility Privilege Tax Exemptions

A monthly privilege tax, which is in lieu of property taxes, is imposed on coal conversion facilities. The land on which the plant is located remains subject to property tax.


Coal Gasification Facility

A coal gasification facility that consumes, or is designed to use, 500,000 tons or more of coal per year is subject to a tax equal to the greater of 4.1% of gross receipts or 13½ cents on each 1,000 cubic feet of synthetic natural gas produced for sale. Production in excess of 110 million cubic feet per day is exempt.


Coal Beneficiation Facility

A coal beneficiation facility is subject to a tax of 20 cents per ton of beneficiated coal produced for sale or 1¼% of gross receipts, whichever is greater. Production in excess of 80% of plant capacity is exempt.


New Coal Facility

A new coal conversion facility, other than an electrical generating facility, is exempt from the state's share of the tax for the first 5 years of operation, and the county where the plant is located may exempt the county's share of the tax for up to 5 years.


Other Coal Conversion Facility

For any other coal conversion facility that consumes, or is designed to use, 500,000 tons or more of coal per year, the tax is 4.1% of gross receipts.


Carbon Dioxide Sale and Capture Exemptions

A coal conversion facility may exclude income from the sale and transportation of carbon dioxide used in the enhanced recovery of oil or natural gas in computing its taxable gross receipts.

A coal conversion facility that achieves a 20% capture of carbon dioxide emissions during a taxable period since 2010, is exempt from 20% of the state's share of the tax. An additional 1% of the state's share of the tax is exempted for each additional 2% capture of carbon dioxide emissions, to a maximum of 50% of the state's share of the tax.


Century Code Reference: N.D.C.C. § 57-60

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