Sales Tax Exemption Application & Approval Requirements

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Application Process: To apply for a sales tax exemption, the taxpayer must submit a letter of application to the Office of State Tax Commissioner by email or mail. The letter should include:

  • Taxpayer name, address, Federal Employer Identification Number, and North Dakota sales and use tax permit number.
  • Name and physical address of the project.
  • Description of project and detailed information on how the project meets the exemption qualifications.
  • Date of project start and completion.
  • Estimated or actual cost of the project and the portion applicable to qualified exempt tangible personal property.
  • List of qualified exempt tangible personal property purchased for the project.
  • If applying for a refund of North Dakota tax paid on qualifying tangible personal property, include a spreadsheet of the qualifying purchases and copies of the purchase invoices.
  • Any other information as noted below for a specific exemption.

Approval:

  • Sales Tax Exemptions (all but those listed below) – taxpayer may obtain prior approval from the Office of State Tax Commissioner to exempt qualified tangible personal property at the time of purchase. If prior approval is not received, the purchaser must pay the tax and the project owner may apply for a refund of the tax paid on any property ultimately approved for exemption.
    • Coal Mine Machinery and Equipment – taxpayer is required to apply for a refund of the qualifying tax paid.
    • Contractors – contractors who purchase and install or consume tangible personal property eligible for exemption are required to pay sales or use tax on all property used in an exempt project unless the project owner provides an exemption letter issued by the Office of State Tax Commissioner stating that contractors are not liable for sales or use tax. Taxpayers may apply for a refund of tax paid by contractors on property qualifying for exemption.

Century Code Reference: N.D.C.C. §§ 57-39.2-04.2, 57 39.2 04.3, and 57-40.2-04.2