Keep more of the money your company makes.
North Dakota offers effective tax incentives to help lower your cost of doing business.
Business Formation Fees
The North Dakota Secretary of State provides step-by-step instructions for the formation of a new business in North Dakota, as well as support for existing businesses.
Income Taxes – Corporate
North Dakota’s corporation income tax rates range from 1.41 percent to 4.31 percent (as of January 2018) of North Dakota taxable income. The state income is determined using an equally weighted three-factor apportionment formula.
Income Taxes – S Corporation and Partnership
Partnerships, S Corporations and LLCs (treated like passthrough entities) do not pay income tax at the entity level. Instead the entity profit or loss is passed through to the entity’s owners.
Income Taxes – Individual
North Dakota’s low individual income tax rates are competitive with other states that have an income tax. The rates – ranging from 1.1 percent to 2.9 percent (as of March 2018) – are applied to federal taxable income plus or minus certain state adjustments.
North Dakota exempts all personal property from taxation (except certain oil and gas refineries and utilities). That means no property tax on items like office equipment, inventory, accounts receivable or materials in process. A variety of services are offered by local municipalities that must be considered in conjunction with property tax rates. All local authorities may impose taxes in any given community; thus, tax rates vary for each municipality. The North Dakota Tax Department site gives further information.
Sales and Use Taxes
In North Dakota, many items that other states tax are exempt from sales tax. For example, natural gas, electricity, most professional services and groceries are not taxed. The North Dakota Tax Department provides information for doing business in the state.
North Dakota boasts one of the most affordable unemployment insurance tax rates in the nation. JobsND works with all companies in the state in the provision of this benefit.
Workers’ compensation provides benefits to injured employees for accidents or occupational diseases arising out of, and in the course of, their employment. Compensation coverage and information can be found with North Dakota Workforce Safety and Insurance.
Exemptions, Refunds & Credits
North Dakota has a variety of tax exemptions, refunds and credits that are available to businesses.