Did North Dakota’s Economic Nexus Change?

Sovos
December 30, 2020

The South Dakota v. Wayfair, Inc. decision pushed many states – including North Dakota – to adjust their economic nexus laws. North Dakota had previously passed a law in 2017 to address remote seller sales tax, but it was contingent on the Wayfair ruling. We have outlined key points on North Dakota’s economic nexus in the following blog post. 

Enforcement date:
October 1, 2018.

Sales/transactions threshold:
$100,000.

Measurement period:
Threshold applies to the previous or current calendar year.

Included transactions/sales:
Retail sales delivered into the state.

When You Need to Register Once You Exceed the Threshold:
A remote seller must register and begin collecting sales tax in North Dakota on October 1, 2018, or 60 days after the threshold is met, whichever is later.

Summary: According to state law, remote sellers must collect North Dakota sales tax if their sales into the state exceed $100,000 in the current or previous calendar year. Marketplace facilitators must collect North Dakota sales tax if their facilitated and direct sales exceed $100,000 in the current or previous calendar year.

“Prior to July 1, 2019, North Dakota’s small seller exception also included a sales threshold of 200 or more separate transactions in the prior or current year,” according to the North Dakota Office of State Tax Commissioner. “The transactions threshold was repealed, effective July 1, 2019. Remote sellers who only met the transactions threshold in 2018 or 2019 must continue to collect North Dakota sales tax through June 30, 2019. After June 30, 2019, those remote sellers may cancel their North Dakota sales and use tax permit and discontinue collecting North Dakota sales tax.”

North Dakota is one example of how a state may evolve its economic nexus laws, which is why remote sellers and marketplace facilitators must stay current on all changes to stay compliant.

North Dakota Sales Tax Resources: Contact our team of experts for the latest details on North Dakota’s economic nexus. Also check out our interactive sales tax nexus map for real-time information on every state.

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Author

Sovos

Sovos is a leading global provider of software that safeguards businesses from the burden and risk of modern transactional taxes. As VAT and sales and use tax go digital, businesses face increased risks, costs and complexity. The Sovos Intelligent Compliance Cloud is the first complete solution for modern tax, giving businesses a global solution for tax determination, e-invoicing compliance and tax reporting. Sovos supports more than 7,000 customers, including half of the Fortune 500, and integrates with a wide variety of business applications. The company has offices throughout North America, Latin America and Europe. Sovos is owned by London-based Hg. For more information visit www.sovos.com and follow us on LinkedIn and Twitter.
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