Does North Dakota charge sales tax on services?
by January 25, 2024
The majority of U.S. states require merchants to charge sales tax on tangible personal property (TPP), otherwise known as physical goods. Many states also implement sales and use tax on digital goods and SaaS. Because the economy has shifted over time from a manufacturing economy to a service economy, states are now looking to generate revenue by taxing services.
Here’s what merchants need to know about taxing services in the state of North Dakota, which has a state sales tax rate of 5%.
Does North Dakota charge sales tax on services?
Most services, including professional services, are not considered taxable in North Dakota with a few exceptions.
- The furnishing or service of communication services, excluding internet access service but including one-way and two-way telecommunications services
- Tickets or admissions to places of amusement or entertainment or athletic events, including amounts charged for participation in an amusement, entertainment, or athletic activity
- The leasing or renting of a hotel or motel room or other accommodations
- The sale of vulcanizing, recapping, and retreading services for tires
Please keep in mind that this is a guideline, and you should consult with a sales tax professional to determine if the services your business provides should be subject to state sales tax. For an in-depth look at North Dakota sales tax, TaxJar’s guide to sales tax in North Dakota and the North Dakota Office of State Tax Commissioner has more details.
