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Tax Incentives
North Dakota was one of three states without a budget deficit in 2003. While other states looked to cut services and raise taxes, North Dakota actually reduced its top corporate income tax rate.
Our new corporate income tax rate took effect Jan. 1, 2004. This new rate lowers the percentage range at which corporations are taxed from 2.6% to 7%.
| If North Dakota taxable income is: |
The tax is: |
| Over |
But not over |
|
| $0 |
$3,000 |
2.60% of North Dakota taxable income |
| $3,000 |
$8,000 |
$78.00 + 4.10% of the amount over $3,000 |
| $8,000 |
$20,000 |
$283.00 + 5.60% of the amount over $8,000 |
| $20,000 |
$30,000 |
$955.00 + 6.40% of the amount over $20,000 |
| $30,000 |
|
$1,595.00 + 7.00% of the amount over $30,000 |
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For example, a business with a taxable income of $18,000 would pay a corporation tax of $283 plus 5.6 percent of the amount over $8,000 (see calculations below).
$18,000
- 8,000
$10,000
x 0.056
$560.00
+283.00
$843.00
In addition, new corporations that qualify as primary sector businesses may pay $0 in corporate income taxes for the first five years of their existence in North Dakota, if they apply for and are granted the exemption through the State Board of Equalization. Significant expansions beyond the initial location of a primary sector business may apply for additional five-year corporate income tax exemptions.
Effective Corporate Income Tax Rates for Primary Sector Businesses:
| State |
First 5 years |
After 5 years |
First 5 years after expansion |
| ND |
0 |
6.90% |
0 |
| MT |
6.75% |
6.75% |
6.75% |
| WI |
7.90% |
7.90% |
7.90% |
| MN |
9.80% |
9.80% |
9.80% |
Related Links:
Office of State Tax Commissioner
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