Sales & Use Special Taxes
Sales Tax
North Dakota imposes a sales tax on the gross receipts of retailers. The tax is paid by the purchaser and collected by the retailer. Local subdivisions may also impose a local tax which is administered by the Tax Commissioner.
The sales tax levied is:
- 5% general rate on the gross receipts from retail sales of tangible personal property, communication services, magazines and other periodicals sold over the counter, cigarettes and tobacco products, and admission tickets for recreation activities; from the leasing or renting of hotel, motel, or tourist court accommodations, including bed and breakfast facilities for periods of less than 30 consecutive days; and from the leasing of tangible personal property.
- 7% rate on the gross receipts from retail sales of alcoholic beverages sold for consumption either on or off the premises.
- 3% rate on the gross receipts from retail sales of new farm machinery and new irrigation equipment used exclusively for agricultural purposes, and new mobile homes.
Use Tax
The purchase price of tangible personal property purchased outside of the state for storage, use or consumption within the state is subject to a use tax. In addition, tangible personal property not originally purchased for use in North Dakota is subject to a use tax based upon its fair market value at the time it was brought into the state. Credits are allowed for sales and use taxes paid to other states. Use tax rates are the same as the sales tax rates listed.
Local Sales and Use Taxes
Cities or counties which have adopted home rule charters may levy sales and use taxes. For detailed information about local sales and use taxes, city lodging taxes, and city lodging and restaurant taxes administered by the Tax Commissioner's Office, see our Local Option Taxes by Location guideline.
Motor Vehicle Excise Tax
The purchase price of any motor vehicle for use on North Dakota streets or highways is subject to a motor vehicle excise tax if the vehicle is required to be registered in North Dakota. The motor vehicle excise tax is 5% of the purchase price (the sales price less any trade-in amount) or, if the vehicle is acquired by means other than purchase, the tax is five percent of the fair market value. When a motor vehicle weighing less than ten thousand pounds is leased for at least one year, the motor vehicle excise tax is 5% of the lease consideration. All other leased vehicles are taxed at 5% of the purchase price. North Dakota allows credit for any excise tax paid on a motor vehicle in another state if that state allows a reciprocal credit. The motor vehicle excise tax is in addition to motor vehicle registration fees for license plates. The registration fees are paid annually to the Department of Transportation.
Music And Dramatico-Musical Composition Performing Rights Tax
A 5% tax is levied on the gross receipts from all sales, licenses and other dispositions of performing rights in music or dramatico-musical compositions.
City Lodging/Restaurant Taxes
The governing body of any city may, by ordinance, impose a city tax, not to exceed 2%, upon the receipts from leasing or renting hotel and motel accommodations. A city may impose an additional 1% tax on lodging accommodations and on receipts from restaurant sales of prepared food or beverages.
Aircraft Excise Tax
A 5% tax is imposed on the purchase price or market value of aircraft registered in North Dakota. The tax applies whether the aircraft is purchased in North Dakota or outside the state. If the aircraft is purchased for lease or rental, the tax may be imposed on the lease or rental cost of the aircraft. The tax rate is reduced to 3% of the purchase price or rental price or rental cost of the aircraft if the aircraft is designed exclusively for aerial applications of agricultural fertilizers, pesticides and other agricultural materials.
