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Learn the fundamentals of sales tax
Do you need to collect sales tax in North Dakota?
You’ll need to collect sales tax in North Dakota if you have nexus there. There are two ways that sellers can be tied to a state when it comes to nexus: physical or economic. Physical nexus means having enough tangible presence or activity in a state to merit paying sales tax in that state. Economic nexus means passing a states’ economic threshold for total revenue or the number of transactions in that state.
Do you have physical nexus in North Dakota?
North Dakota considers a seller to have physical nexus if you have any of the following in the state:
- A temporary or permanent office or place of business
- An employee or agent
- Leasing or renting tangible personal property
You can click here to read exactly what the North Dakota Department of Revenue has to say about what constitutes sales tax nexus in North Dakota (p. 2).
Do you have economic nexus in North Dakota?
Effective October 1, 2018, North Dakota considers vendors who make more than $100,000 in sales in the state in the previous or current calendar year to have economic nexus. This means the state considers these vendors obligated to collect sales tax from buyers in the state. You can read North Dakota’s economic nexus guidance for sellers here.
Is what you’re selling taxable?
Tangible products are taxable in North Dakota, with a few exceptions. These exceptions include certain groceries, prescription medicine and medical devices, and machinery and chemicals used in agriculture. Excise tax may also applicable to the sale of motor vehicles and aircraft. More information on the excise tax and use taxes, consult the North Dakota state site.
Many services are also taxable with some exceptions. Check out this document for information about which services are taxable and tax exempt in North Dakota.
Is SaaS taxable in North Dakota?
SaaS is non-taxable in North Dakota.
How to get a sales tax permit in North Dakota
Apply online at the North Dakota Taxpayer Access Point (TAP).
Or file by mail using the North Dakota Application for Income Tax Withholding and Sales and Use Tax Permit.
Send the completed form to:
Office of State Tax Commissioner
600 E. Boulevard Ave., Dept 127
Bismarck, ND 58505-0599
Or email to: [email protected]
Or Fax to: 701.328.0332
This is the required information to register for a sales tax permit in North Dakota:
- Personal identification info (SSN, address, etc.)
- Business identification info (EIN, address, etc.)
- Type of business entity
- NAICS code
- Description of business activities
It’s free to apply for a sales tax permit, but other business registration fees may apply.
Collecting Sales Tax
North Dakota is a destination-based sales tax state. So no matter if you live and run your business in North Dakota or live outside North Dakota but have nexus there, you would charge sales tax at the rate of your buyer’s ship-to location. The North Dakota sales tax rate is 5%.
To find the total sales tax rate, combine the North Dakota state sales tax rate of 5% and look up the local sales tax rate with TaxJar’s Sales Tax Calculator.
Should you collect sales tax on shipping charges in North Dakota?
Shipping charges are generally taxable in North Dakota.
Read a full explanation of sales tax on shipping in North Dakota here.
When are Returns Due?
When you file and pay North Dakota sales tax depends on two things: your assigned filing frequency and your state’s due dates.
How often will you file sales tax returns in North Dakota?
States assign you a filing frequency when you register for your sales tax permit. In most states, how often you file sales tax is based on the amount of sales tax you collect from buyers in the state.
In North Dakota, you will be required to file and remit sales tax either monthly, quarterly, semiannually or annually.
North Dakota sales tax returns are always due the last day of the month following the reporting period. If the filing due date falls on a weekend or holiday, sales tax is generally due the next business day.
Filing Sales Tax
When it comes time to file sales tax in North Dakota you must do three things:
- Calculate how much sales tax you owe
- File a sales tax return
- Make a payment
How to Calculate How Much Sales Tax You Owe in North Dakota
Calculating how much sales tax you should remit to the state of North Dakota is easy with TaxJar’s North Dakota sales tax report.
All you do is connect the channels through which you sell – including Amazon, eBay, Shopify, Square and more – and we’ll calculate exactly how much sales tax you collected. All the information you need to file your North Dakota sales tax return will be waiting for you in TaxJar. Start your 30-day free trial of TaxJar today.
How to File and Pay Sales Tax in North Dakota
You have three options for filing and paying your North Dakota sales tax:
- File online – File online at North Dakota Taxpayer Access Point (TAP). You can remit your payment through their online system.
- File by mail – You can use file by mail with the North Dakota Sales, Use and Gross Receipts Tax form.
- AutoFile – Let TaxJar file your sales tax for you. We take care of the payments, too. You’ll never have to worry about spreadsheets, calculations or filling out complex sales tax returns.