North Dakota imposes a statewide sales and use tax rate of 5%. In addition to the state rate, North Dakota local sales tax may apply, as cities and counties are permitted to levy additional taxes. Understanding North Dakota tax rates at both the state and local level is essential for accurate compliance.
What’s Taxable in North Dakota?
Under North Dakota sales tax laws, sales and use tax applies to the sale of tangible personal property and certain enumerated services. Businesses selling taxable goods or services are required to collect and remit sales tax to the state.
Examples of taxable items include:
- Clothing
- Prepared food
- Non-prescription medical items or drugs
- Prewritten software
Sales Tax Nexus in North Dakota
A seller is liable to collect and remit North Dakota sales tax if they meet the state’s nexus requirements. Nexus can be established through either physical or economic presence.
ND: Physical Nexus
Physical presence is created by having a business location, office, warehouse, vehicle, employee, or other representative operating in the state.
ND: Economic Nexus
North Dakota enforces economic nexus for remote sellers . If your business has over $100,000 in sales in North Dakota during the previous or current calendar year; you may be required to register for and collect North Dakota sales tax.
Learn more on the North Dakota Office of Tax Commissioner.
North Dakota Sales Tax Exemptions
Under North Dakota sales tax laws, sales and use tax applies to the sale of tangible personal property and certain enumerated services. Businesses selling taxable goods or services are required to collect and remit sales tax to the state.
Exempt Products and Services
- Most services (unless specifically taxed by statute)
- Food and food ingredients for home consumption
- Select agricultural items
- Certain digital goods (digital books, digital audio-visual works, digital audio)
Entity or Use-Based Exemptions
North Dakota exempts sales to certain entities, including:
- Select qualified nonprofit entities
- Native American Tribal Governments
- Retailers selling for resale
- Certain medical providers
- Schools
- Government entities
How to Claim Sales Tax Exemption in North Dakota
To claim an exemption, an entity must provide an exemption certificate with the sale. The Treasury accepts the following exemptions listed under the North Dakota Sales and Use Tax Forms.
Additional guidance on acceptable exemption formats can be found in: Sales Tax Exemptions.
North Dakota Filing and Remittance Requirements
Businesses registered for North Dakota sales tax filing must submit returns and remit tax through one of the following methods:
- E-filing through North Dakota TAP
- Simplified Electronic Return (SER) for SST participants and their affiliates
- Paper filing: One Time Sales and Use Remittance Form
Frequently Asked Questions
Is North Dakota a part of the Streamlined Sales Tax (SST) initiative?
Yes, North Dakota is part of the Streamlined Sales Tax (SST) initiative, a multi-state agreement designed to simplify and standardize sales tax rules. More information concerning SST may be found here.
Does North Dakota have sales tax holidays?
No, North Dakota does not currently offer sales tax holidays.
Are there any special point of sale fees in North Dakota?
Yes, certain fees apply at the point of sale, including:
- E911 – Prepaid Wireless 911 Fee
- Rental Surcharge – Lease or Rental of Motor Vehicles
Does North Dakota apply sales tax to shipping charges?
Yes. Shipping charges are generally taxable if the underlying item is taxable, as they are considered part of the total sales price under North Dakota sales tax laws.
Is North Dakota origin- or destination-based?
North Dakota is destination-based, meaning tax is calculated based on the delivery location, including applicable North Dakota local sales tax rates.
Can I use the Simplified Electronic Return (SER) in North Dakota if I’m not in the SST Model 1 program?
Yes. North Dakota accepts SER filings from any qualified provider, regardless of SST Model 1 participation. Providers like Sovos can file on behalf of any client who opts into that method.
How to Register for a North Dakota Sales Tax License
North Dakota businesses or individuals selling tangible personal property or certain services to North Dakota consumers may need register to collect sales tax when meeting qualifying requirements.
More information is available through the state’s New Business and Contractors resources.
Additional Resources
For more information on U.S. sales tax compliance across all 50 states, check out our:
Looking for an easier way to manage sales tax in North Dakota and beyond? Learn how Sovos simplifies compliance.