Income Tax Exemption
New or Expanding Business
A primary sector or tourism business may qualify for an income tax exemption for up to five years. “Primary sector” refers to a business that adds value to a product, process, or service that produces new wealth in North Dakota. “Tourism” refers to a tourism-related business that is a destination attraction. Eligibility is limited to a new business or to an existing business that expands its operations in North Dakota.
A business is not eligible for the exemption if:
- the business received a property tax exemption under tax increment financing,
- there is an outstanding recorded lien for delinquent property, income, sales or use taxes against the business, or
- the exemption fosters unfair competition or endangers existing business.
- The business must apply to the State Board of Equalization, c/o State Tax Commissioner.
- The application must be filed no later than one year after the commencement of operations within the new business or expansion.
- The Department of Commerce Division of Economic Development and Finance reviews the application for primary sector or tourism eligibility.
- The business must provide notice to competitors as prescribed by the State Board.
- At a public meeting, the State Board considers the application and any testimony, and grants or denies the exemption.