At a glance
Rates and calculations
In 2025, North Dakota’s statewide sales tax rate is 5%. In addition, jurisdictions within the state levy an additional sales tax of between 1% and 3.5%. So the total tax rate in North Dakota ranges from 6% to 8.5%.
To calculate North Dakota sales tax, you can use the following formula:
Sales tax = (5% base rate + local rate) * purchase price.
For instance, if the local rate is 2% and the purchase price is $100, the sales tax would be $7. You can look up the full table of sales tax rates in each city and county in North Dakota on the state tax website. Here’s a small sample:
FAQs
What are the penalties for not paying?
The penalties for not paying North Dakota sales tax can include:
- A late filing penalty of 5% of tax due or $5, whichever is greater.
- A late payment penalty of 5% of unpaid tax or $5.
- Interest charges of 12% annually on unpaid tax.
Is North Dakota’s sales tax destination-based or origin-based?
Destination-based sales tax states calculate tax based on where the purchaser is located. Origin-based sales tax states calculate tax based on where the seller is located.
North Dakota is a destination-based sales tax state.
Is North Dakota a Streamlined Sales Tax state?
Yes, North Dakota is a full member state of the Streamlined Sales and Use Tax Agreement (SSUTA).
Nexus
FAQs
Do I need a North Dakota seller's permit if I’m a wholesaler?
No. If you plan to sell only to resellers (and not to end consumers), you do not need to apply for a seller’s permit.
Do I need a North Dakota seller's permit if I sell in the state only temporarily?
Yes, if you sell goods in North Dakota, even temporarily, you probably need a North Dakota seller's permit. This includes selling at trade shows, conventions, flea markets, and the like.
Exemptions
Some exemptions from North Dakota sales tax include:
- Most non-prepared food items
- Prescription drugs
- Some medical devices
- Farm machinery and equipment
- Items purchased for resale
- Diapers
FAQs
Are groceries taxable?
Most groceries are exempt from sales tax in North Dakota. Exceptions to this include prepared foods, dietary supplements, soft drinks, and candy.
Is clothing taxable?
Yes, clothing is generally taxable in North Dakota.
Are digital products taxable?
No, digital products, including digital books, music, and movies, are not taxable in North Dakota.
Is software as a service (SaaS) taxable?
No, SaaS is not considered taxable in most cases.
Are services taxable?
No, professional services like legal, medical, and financial services are not taxable. Neither are other services including installation, repair, and laundering. One exception is if a repairperson (for example) uses new parts — if they charge for those parts using a separate line item on an invoice, then the parts alone are taxable. If they charge a lump-sum amount for the parts and the repair, that whole amount is taxable.
Excise taxes in North Dakota (alcohol, tobacco, gasoline, fuel, marijuana)
North Dakota levies excise taxes on alcohol, tobacco, gasoline, special fuels, and medical marijuana. The tax rates are:
- Liquor: $2.50 per gallon
- Wine: $0.50 per gallon
- Beer: $0.16 per gallon
- Cigarettes: $0.44 per pack of 20
- Tobacco products: 28% of wholesale purchase price
- Gasoline: $0.23 per gallon
- Special fuel: $0.23 per gallon
- Medical marijuana: 5%
Remote sellers
Remote sellers with more than $100,000 in annual sales in North Dakota must register with the state’s tax authority and collect and remit sales tax.
Collecting sales tax
Establishing physical or economic nexus in North Dakota creates an obligation to register and collect sales tax. Physical nexus is established by a tangible physical connection to a state, such as an office, inventory, or employees.
Even if your business has no physical presence in North Dakota, you may still be required to register and collect North Dakota sales tax if you have economic nexus. In North Dakota, the threshold for establishing economic nexus is $100,000 in gross annual sales there.
Once one of these thresholds is met, out-of-state sellers must:
- Register for a North Dakota seller's permit.
- Begin collecting state sales tax and applicable local sales tax on taxable sales in North Dakota.
- File regular North Dakota sales and use tax returns.
- Remit the sales tax collected to the North Dakota Office of the State Tax Commissioner
There are also specific rules around attending trade shows, inventory stored in fulfillment centers, and sales facilitated by online marketplaces that can trigger a North Dakota sales tax obligation for out-of-state sellers.
It's essential for sellers to closely monitor their economic activity in North Dakota so they know when they establish nexus.
Collecting sales tax on shipping charges
In North Dakota, delivery charges, shipping charges, handling fees, and transportation charges are generally considered part of the taxable sales price of tangible personal property. Therefore, if the sale is subject to North Dakota sales tax, the seller must also collect applicable state and local sales tax on shipping charges billed to the customer.
The taxation of shipping charges applies whether the charges are separately stated or included in the sales price. There is no exemption in North Dakota for shipping and handling charges, except when the sale qualifies as exempt.
Filing and paying
All retailers registered to collect North Dakota sales tax must file returns and remit any collected sales tax regularly. Filing frequencies are monthly, quarterly, or annually. (The Office of the State Tax Commissioner assigns a filing frequency to each business based on anticipated taxable sales volumes.)
Returns and payments must be submitted electronically via the North Dakota Taxpayer Access Point (TAP) system.
Sales tax returns are due by the last day of the month following the close of the filing period.
For example, for a quarterly filer, if the filing period ends March 31, the return must be filed and paid by April 30.
Monthly filing periods and due dates
Quarterly filing periods and due dates
Annual filing period and due date
Filing penalties
North Dakota imposes penalties for late filing of sales tax returns:
- A 5% penalty (or $5 minimum) applies in the first month.
- An additional 5% penalty for each subsequent month.
- Maximum 25% penalty.
Interest charges may also apply.
FAQs
I didn’t collect any North Dakota sales tax during a filing period. Do I still need to file a return?
Yes, if you are obligated to file a return, you must file a $0 sales tax return for reporting periods where no sales tax was collected.
Can I amend a North Dakota sales tax return?
Retailers can file an amended return to correct errors or report additional tax owed. Amendments can be submitted electronically through the TAP system.
What is the penalty for filing and paying North Dakota sales tax late?
When filing late, the penalty is 5% of the tax owed or $5, whichever is higher. Additional 5% penalties apply for each subsequent month, up to 25% plus interest charges.
Audit and appeals process
The audit process in North Dakota involves several steps:
- The auditor contacts the business to schedule an audit.
- The auditor reviews records and sales tax returns.
- The auditor issues an assessment report with findings.
- Companies can discuss this report with the auditor.
- If a business disagrees with an auditor’s findings, it can file an appeal.
What to expect during an audit
During a North Dakota sales tax audit, the business should expect the auditor to review relevant records like sales invoices, purchase invoices, bank statements, accounting books, exemption certificates, and past sales tax returns. The auditor is looking for any unreported or underpaid sales tax.
Appealing the results of an audit
If a business disagrees with the auditor's findings, it can file an appeal within 30 days. This involves submitting a written request for review along with supporting documentation. The business will then schedule an appeals conference to present its case. If the appeal is denied, an optional next step is to appeal to the District Court.
Sales tax registration
Below are the key steps to register for a North Dakota sales tax permit:
How to register for sales tax
Registering for a sales tax permit in North Dakota is essential for any business making taxable retail sales in the state. You should register at least 30 days before commencing retail operations. Here is the step-by-step process:
1. You will need to have basic details about your business ready before registering. This includes:
- Legal business name
- Ownership structure
- Federal EIN
- Physical business locations
- Mailing address
- Email address
- Anticipated monthly sales
- North Dakota sales locations
- Type of products sold
2. Visit the North Dakota Taxpayer Access Point (TAP) website and create an online account for your business. You will use this portal for all future sales tax filing and payment.
3. After creating your TAP account, you can complete the online sales tax permit application. Answer all questions about your business activities and products sold in North Dakota.
4. After reviewing your application, the Office of the State Tax Commissioner may contact you to obtain clarification or additional details about your business. Respond promptly to any requests to avoid delays.
5. After approving your application, the Tax Commissioner's office will assign a sales tax account number and filing frequency. You will receive an official North Dakota Sales and Use Tax Permit via email or mail.
After registering, you must collect tax on taxable sales and file returns even if no sales tax was collected. Filing frequencies are monthly, quarterly, or annually, based on sales volume.
Registration requirements for online sellers
Remote sellers exceeding $100,000 in annual North Dakota sales must register to collect state sales tax. Additional registration rules apply to online sellers who are selling on online marketplaces.
Cost of registration
There is no fee to obtain a North Dakota seller's permit. However, some businesses may need to furnish a bond that is eligible for refund after two years of timely filing.
More information and contacts
For help with North Dakota sales tax filing, registration, audits, or appeals, contact:
- Authority Name: North Dakota Office of the State Tax Commissioner
- Phone number: 701-328-1246
- Website: tax.nd.gov
