Tax Types

There are two different types of property tax in North Dakota – locally assessed property and centrally assessed property. In addition, some industries pay other taxes in lieu of property tax.

Locally Assessed Property

Locally assessed property is real property that is owned by an individual or a business. All real property, unless specifically exempt, is subject to property tax. Real property means land and other assets that are permanently structured on the land. A mobile home used as a residence or business is also subject to property tax if it is 27 or more feet long or is attached to utility services.

Property tax for real property is due January 1 following the year of assessment and is payable without penalty until March 1. A 5% discount is allowed for taxes paid in full by February 15. Property tax for a mobile home is due January or 10 days after the home is purchased or moved into the state. A 5% discount is allowed for taxes paid in full by February 15 or within 30 days after the mobile home is purchased or moved into the state.

Counties determine and collect real property and mobile home property taxes, and distribute the revenue to the county, cities, townships, school districts, and other taxing districts. Property taxes are determined by three elements: 1) mills (tax rate), 2) taxable values, and 3) taxing entity. Visit North Dakota Association of Counties - Understanding Property Tax to learn more about counties’ work with property taxes and mills (tax rate).

Definitions to Know in Property Tax

• Real property means land and other assets that are permanently structured on the land.
• Market value is what real property would sell for in the current market.
• Assessed value of all real property in North Dakota is equal to 50% of the market value.

Centrally Assessed Property

Centrally assessed property is specific types of property, including railroads, investor-owned public utilities, pipelines, and airlines. The State Board of Equalization decides the value of railroads, pipelines, and utilities, and certifies the value to the counties in North Dakota. The counties determine the tax due for each property and collect the tax.

Sales and Use Tax

Sales Tax

North Dakota imposes a sales tax on retail sales. The sales tax is paid by the purchaser and collected by the seller.

North Dakota sales tax is comprised of 2 parts:

• State Sales Tax – The North Dakota sales tax rate is 5% for most retail sales.
  • Gross receipts tax is applied to sales of:
    • Alcohol at 7%
    • New farm machinery used exclusively for agriculture production at 3%
    • New mobile homes at 3%
• Local Taxes – City or County Taxes – Cities and counties may levy sales and use taxes, as well as special taxes such as lodging taxes, lodging and restaurant taxes, and motor vehicle rental taxes. These taxes are typically administered by the Office of State Tax Commissioner on behalf of the city or county.

Use Tax

Use tax is the counterpart to sales tax. All individuals, including businesses operating in the state, must pay use tax if sales tax was not collected by the seller on tangible personal property brought or shipped into North Dakota for storage, use, or consumption. Tangible personal property includes items that can be moved or touched, like home goods, clothing, shop supplies, equipment, and building materials. Use tax applies to the purchase price, which is calculated by using the same basis as sales tax.

In addition, tangible personal property not originally purchased for use in North Dakota is subject to use tax plus applicable local taxes based on its fair market value at the time it was brought into the state. A purchaser owes North Dakota use tax if the sales and use tax paid in another state was not at a rate equal to or greater than the North Dakota’s sales tax rate plus applicable local taxes.