Workers compensation premiums are among the lowest in the nation. While many states apply
premiums to an entire payroll, North Dakota's rates apply to only the first $15,600 of wages per
employee. Premiums are paid annually and based on specific job classifications and accident
experience over a number of years.
Workers Compensation Premiums
||Rate per $100 in wages
||Max. Charge at $15,600 wage cap
||Food Processing - Grain Milling
||Manufacturing of Light Metal or Non-Metal Goods
||Foundries - Implement or Equipment Manufacturing
||General Warehouse and Storage
||Clerical Office Employees
North Dakota does not tax personal property. That means you don't pay taxes on equipment,
inventory, materials in process or accounts receivable.
Real property, such as land and actual fixed improvements to the land (including buildings), is
taxed by the county. However, any new or expanding business may be granted an exemption for up to
five years. Extensions of up to an additional five years are available for: 1) agricultural
processors and 2) a project located on property leased for a governmental entity.
Local governments and any project operator may negotiate payments in lieu of the property tax for a
period of 20 years from the date project operations begin.
Other possible exemptions:
- New single family residences-full or partial exemption.
- Rehabilitation of buildings more than 25 years old-up to three years exemption of added property
value from communities.
- A five-year exemption for a geothermal, solar or wind energy system.
Sales and Use Tax
North Dakota's general sales tax rate is 5%. New or expanding businesses qualify for an exemption on
machinery, building materials and equipment used for manufacturing, processing or recycling. There
is no sales tax on electricity, water or money and only a 2% tax on natural gas when used for direct
manufacturing purposes. Interstate communications over phone lines and materials used to construct
an agricultural processing plant are not taxed. Of a possible 164 taxable services, North Dakota
taxes only 21.
Local Sales and Use Tax
Local subdivisions are also allowed to levy a sales tax. The rate in all cities that currently levy
such a tax is 1%. This tax applies only to the first $2,500 on any given purchase.
Individual Income Tax
A vast majority of North Dakotans file the state's short tax form (95%). Individual income tax is
calculated by multiplying the federal income tax liability (before federal credits) by fourteen