About the Tax Department
Functions and Responsibilities – Income, Sales and Special Taxes Division
|Powers and Duties of the Tax Commissioner|
|Major Goals and Objectives|
|Functions and Responsibilities|
The Income, Sales and Special Taxes Division administers the state's corporate and individual income taxes, financial institutions tax, oil and natural gas gross production tax, oil extraction tax, sales and use taxes, motor fuel tax, alcohol and beer taxes, estate tax, cigarette and tobacco taxes, and provider assessment for intermediate care.
The division is made up of six sections: Corporate Income Tax; Oil and Gas Taxes; Individual Income Tax; Sales and Withholding Taxes; Fuels, Alcohol, and Estate Taxes; and Field Audit.
The Corporate Income Tax section administers the state's income tax imposed on all corporations doing business in North Dakota. This section administers the state's financial institution tax, as it applies to banks, trust companies, and building and loan associations doing business in the state. A portion of this tax goes directly to the counties. The Corporate Income Tax section conducts in-office and/or field audits of all corporations. Historically the primary emphasis for field audits has been placed on the large multinational corporations doing business in the state. The Corporate Income Tax section works with the Multistate Tax Commission to perform field audits.
The Oil and Gas Taxes section performs in-office and field audits, as well as cross-checks and compliance reviews of oil and gas companies which conduct business in the state.
The Individual Income Tax section administers the state's income tax on individuals, estates, and trusts. The Individual Income Tax section also performs in-office and field audits. Most audits conducted by this section are in-office.
The principal function of the Sales and Withholding Tax section is to administer sales and income tax withholding taxes. This section monitors compliance with the sales and withholding tax laws, conducts field audits, issues sales tax permits, revokes permits of those delinquent in reporting sales, and cancels permits issued to businesses which are no longer operating. This section may grant or deny taxpayer requests for sales tax exemptions; conduct hearings and negotiate settlements; issue administrative tax rulings; provide guidelines, rules and regulations for retailers and other taxpayers; review compliance with sales and use tax regulations in out-of-state purchases; and inform the public of laws pertaining to sales and use taxes. This section also administers the cigarette and tobacco taxes, provider assessment for intermediate care, local sales and use taxes, city lodging and restaurant taxes, and Canadian refunds.
The Fuels, Alcohol, and Estate Taxes section is responsible for administering, collecting and auditing fuel and alcohol. This section administers and interprets tax laws, issues licenses, and provides taxpayer assistance. This section also supervises North Dakota's tax on property transferred upon death. North Dakota's estate tax is entirely contingent on credits which the federal government allows on federal estate taxes. Specifically, the federal government allows a credit for state estate taxes paid, a credit which is applied against the federal estate tax. North Dakota law provides that its state estate tax will be equal to, but no more than, the credit allowed on federal estate tax returns. In other words, the estate will pay no more in North Dakota estate tax than it would otherwise pay in additional taxes to the federal government. The section also maintains estate tax records, and informs the public about estate tax laws, policies and procedures.
The Field Audit Section provides audit support to the Sales and Withholding Tax Section and the Fuels, Alcohol, and Estate Tax Section. Field audits, utilizing audit staff located at Bismarck, Dickinson, Fargo, Grand Forks, Jamestown, Minot and Williston complete both field and office audits of retailers, employers and other taxpayers to monitor compliance with the state and local tax (sales/use, lodging, restaurant) laws.