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600 E. Boulevard Ave.
  Bismarck, ND 58505-0599
  328.7088 phone
  701.328.3700 fax
  877.328.7088 toll-free

Property Tax Exemption

New or Expanding Business

Parameters for property tax exemptions that initially become effective after December 31, 2014.

A new or expanding business project that is certified as a primary sector business by the Department of Commerce Division of Economic Development and Finance may be granted a property tax exemption for up to five years. Two extensions are available:

  • Agricultural processors may be granted a partial or full exemption for up to five additional years.
  • A project located on property leased from a government entity qualifies for an exemption for up to five additional years upon annual application by the project operator.

In addition to, or instead of, an exemption, local governments and any project operator may negotiate payments in lieu of property tax for a period of up to 20 years from the date project operations begin.

Qualifications

To qualify, a project must be a new or expanded revenue-producing primary sector enterprise. All buildings, structures or improvements used in, or necessary to, the operation of the project qualify. The structure might be the project's buildings or the project's quarters within a larger building. Land does not qualify for an exemption.

A city or county with a population that is fewer than 40,000 may grant an exemption for a retail project if the voters have approved granting of exemptions for projects operating in the retail sector, and the governing body has set minimum criteria for granting those exemptions.

A project is not eligible for an exemption if:

  • a tax exemption was received under tax increment financing, or
  • the governing body determines the exemption fosters unfair competition or endangers existing business.

Application Procedures

  • The project operator applies to the city governing body if the project is located within city boundaries, or the county commission if the project is located outside city boundaries.
  • The application for exemption must be made and approved before construction of a new structure begins. If an existing structure will be occupied, application must be made and approved before the structure is occupied.
  • Payments in lieu of taxes may be approved after construction or occupancy of a structure.
  • Nonvoting representation of affected school districts and townships must be included in the negotiation and deliberation of granting a property tax exemption or payment in lieu of taxes for new or expanding businesses.
  • The project operator must publish two notices in the official newspaper of the city or county at least one week apart if the appropriate governing body determines there are local competitors. The last notice must be published at least 15 days, but not more than 30 days, before the application is considered.
  • A public hearing on the application must be held. After the public hearing, the appropriate governing body acts on the application.

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