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600 E. Boulevard Ave.
  Bismarck, ND 58505-0599
  701.328.7088 phone
  701.328.3700 fax
  877.328.7088 toll-free
FOR IMMEDIATE RELEASE Contact: Cory Fong, Tax Commissioner, 701-328-2770
Friday, December 8, 2006  

North Dakotans Reminded to Apply for Sales Tax Refund

BISMARCK, N.D. – Tax Commissioner Cory Fong reminds retailers and shoppers about a sales tax refund process that has been in place since October 1, 2005.

“The holiday season is the time of year when shoppers are more likely to be making high dollar purchases,” said Fong. “We want to be sure that shoppers are aware they might qualify for a refund of some of the local sales tax paid on their purchases.”

When North Dakota joined the Streamlined Sales Tax Project (SSTP) in October 2005, the purpose was to simplify sales and use tax collection and administration for retailers and states. As part of the streamlined project, a sales tax refund program replaced the sales tax caps that most North Dakota cities and some counties imposed.

“The “cap” was a maximum amount of local sales tax that a retailer could charge on a transaction,” said Fong. “The cap amount varied depending on where the purchase was made.”

Since joining the sales tax project in October 2005, retailers no longer limit the amount of local sales tax collected. Instead, the retailer charges the local sales tax on the full purchase price and the purchaser applies for a refund from the state Tax Department for all local sales tax paid in excess of the previous cap. Since October 1, 2005, the Tax Department has processed 2,140 refunds for a total of $1,228,506 for an average refund of $574.

Fong said, “The amount of refund a customer may request is equal to the difference between the amount of city and county sales tax paid and the amount that would have been paid if the cap still existed.”

  • For example, a customer purchases furniture costing $6,000 in a city that previously provided for a $25.00 cap on local tax.
    • A 1% city sales tax equals $60.00.
    • The customer should request a refund from the Tax Department for $35.00.
    • $60.00 less $25.00 cap = $35.00.

To apply for a refund, a shopper simply files a “Claim for Refund of City or County Sales and Use Tax Transmittal” form, along with copies of invoices, to the Office of State Tax Commissioner. The customer should keep the original invoices for a period of three years from the date of purchase. The refund form and information about the refund process are available from the Tax Department online at http://www.nd.gov/tax/.

“Customers may apply for a refund anytime within three years from the date of the purchase,” said Fong. “All local tax collected by the Tax Department is sent to the city or county. If a customer does not request the refund, the tax revenue stays with the city or county.”

For more information about the refund program, or to access the refund claim forms shoppers may contact the Tax Department’s Sales & Withholding Tax Section at (701) 328-3470, by e-mailing the department at salestax@nd.gov, or online from the Tax Department’s web site at http://www.nd.gov/tax/.

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