Most businesses starting in North Dakota selling a product or offering certain services will need to register for a sales tax permit. This is commonly referred to as a seller’s permit, sales tax license, sales tax number, or sales tax registration.
Check out the rest of this guide to determine who needs a sales tax permit, what products and services are taxable, how to register, and reporting requirements.
Related: Guide to starting a business in North Dakota
Who needs a sales tax permit in North Dakota?
A business must register for a sales and use tax permit in North Dakota when:
- A business has a sales tax nexus (also referred to as economic nexus). Nexus means having a physical presence in the state, such as having a physical location like a retail store or office or using a warehouse or fulfillment center to store inventory.
- Making retail sales and/or taxable services in North Dakota (including occasionally selling items at craft shows, fairs, seminars, shows, etc.).
- Hiring employees who work in North Dakota (including remote employees, sales representatives, or agents).
- An online business located in North Dakota is selling taxable products to North Dakota residents.
- A remote seller shipping over $100,000 annually in taxable products to North Dakota residents.
What products and services are taxable in North Dakota?
Physical products
There are a few exceptions, but almost all physical products are taxable when sold at retail in the state of North Dakota. Common examples include:
- General merchandise like furniture, appliances, and clothing
- Titled or registered items like vehicles
Prescription drugs, certain agricultural supplies, and medical equipment are some of the items that are tax-exempt in North Dakota.
In North Dakota, labor is usually not subject to sales tax. For instance, if you operate a business that provides air conditioning repair services, the labor charge for conducting the repairs is not taxable. However, any replacement parts or materials used during the repair are taxable. On the other hand, if your business involves creating and installing custom products like cabinetry, taxation changes slightly. Although the direct labor costs for designing, constructing, and fitting the cabinets do not incur sales tax, the entire cost to the customer for these projects is taxable. This total cost includes both the materials and the labor, as the labor is considered an integral part of the final product’s value to the customer.
Digital Products
Digital products are tax-exempt in North Dakota.
Services
Most services aren’t taxable in North Dakota, however, there are a few exceptions, some of which include:
- Short-term lodging
- Admission tickets for recreational activities
- Rental or leasing of tangible personal property
How to register for a sales tax permit in North Dakota
A sales tax permit can be obtained by registering online with the North Dakota Taxpayer Access Point (TAP) or by mailing in the Sales and Use Tax Permit Application (Form SNF 59507).
Information needed to register includes the following:
- Legal business name
- Doing Business As name if different from legal name
- Business location address and mailing address
- Type of business entity: sole proprietorship, partnership, corporation, Limited Liability Company (LLC)
- Employer Identification Number (EIN) from the IRS, or owner’s Social Security Number if a sole proprietorship with no employees
- North American Industry Classification System (NAICS) code
- Name, address, title, phone number, social security number, and percentage ownerships of owners/officers/members
- The expected date the business will begin collecting sales tax
Sales tax reporting
How is sales tax collected?
When a business sells a taxable product or service, the business charges the appropriate sales tax rate to the customer. The business collects this tax and then sends it to the North Dakota Office of State Tax Commissioner.
How much is sales tax in North Dakota?
If the purchase is made at a store or in a mobile location, the sales tax rate varies depending on where the sale took place in North Dakota. In addition to the statewide tax, an additional gross receipts tax may be added by cities and counties that have adopted home rule. When shipping in-state, the sales tax is based on the purchaser’s address.
To find local sales tax rates throughout the state, see the sales tax rates by location from the North Dakota Office of State Tax Commissioner.
When are North Dakota sales tax returns due?
The Office of State Tax Commissioner will determine a filing frequency based on the expected sales volume, which will be monthly, quarterly, or annually.
Filings are due the last day of the month following the reporting period unless the last day of the month falls on a weekend or federal holiday, which would move to the next business day.
Even if the business had no sales during the reporting period, a filing indicating no sales is still required.
North Dakota Sales Tax Permit FAQs
How much does a North Dakota sales tax permit cost?
There is no cost for a sales tax permit in North Dakota.
How long does it take to get a North Dakota sales tax permit?
Most North Dakota sales tax permits are issued immediately when filing online and 2 to 3 weeks when applying by mail.
Do you have to renew your North Dakota sales tax permit?
The sales tax permit is a one-time registration, and no renewals are needed. Be mindful that if any information about the business changes, such as the mailing address, additional locations, or change in ownership, those changes need to be updated with the Office of State Tax Commissioner.
Is a business license the same thing as a sales tax permit?
No – A business license and a sales tax permit serve distinct purposes.
A business license authorizes the operation of a business within a particular jurisdiction, ensuring compliance with local laws and regulations. On the other hand, a sales tax permit enables a business to legally collect sales tax from customers, which is then remitted to the state government. Typically, businesses require both a license and a permit to operate fully within the law.
Related: What North Dakota business licenses and permits are needed?
How do I get a wholesale license in North Dakota?
A business can purchase items to resell without paying state sales tax. The tax liability is passed from the wholesaler or distributor to the retailer, who will then charge sales tax to the end-user of the item.
Wholesalers and distributors will require a sales tax number and a completed North Dakota Certificate of Resale (Form SFN 21950) (also referred to as a wholesale license, resale certificate, or sales tax exemption certificate) to document the items being purchased are for resale.
If you have questions about the sales tax permit, the North Dakota Office of State Tax Commissioner has a guide to sales taxes in North Dakota or can be contacted by calling 701-328-1241 or email taxregistration@nd.gov.
Remote offices are also available to answer questions as well:
Dickinson, ND
Office of State Tax Commissioner
135 Sims St., Suite 212
Dickinson, ND 58601-5148
Fargo, ND
Office of State Tax Commissioner
4342 15th Ave S, Suite 205
Fargo, ND 58103-1100
Grand Forks, ND
Office of State Tax Commissioner
PO Box 14435
Grand Forks, ND 58208-4435
Minot, ND
Office of State Tax Commissioner
1600 2nd Ave SW, Suite 3
Minot, ND 58701-3459
Williston, ND
Office of State Tax Commissioner
2112 4th Avenue W Suite 103
PO Box 4502
Williston ND 58802-4502
