North Dakota has reasonable tax rates. Their highest tax rate is 2.90%. They do not tax social security benefits but have a high payroll tax wage base. There are no estate or inheritance taxes in North Dakota. However, they are one of the few state that does assess sales tax on services.
State Taxes at a Glance – North Dakota
|Type of Tax||2023|
|Individual Rates||0.00% to 2.50%|
|Corporate / Business Tax Rates||1.41% to 4.31%|
|Gross Receipts Tax||None|
|Sales Tax||6.97% (average)|
|Property Taxes||0.95% as a percentage of primary home|
|Estate or Inheritance Tax||None|
State Income Taxes in North Dakota
The state of North Dakota does have an individual income tax. In 2023 the Governor passed into law a bill reducing the number of brackets and tax rates. The highest tax rate was dropped from 2.90% to 2.50%.
State Business Taxes in North Dakota
Similar to the state’s individual income tax, the state of North Dakota has Corporate business tax rates on a marginal scale that range from 1.41% to 4.31%. For other business entities that are flow-thru entities, such as S Corporations, Partnerships, LLCs, etc., they are taxed the individual income tax rates ranging between 1.10% and 2.50%
Sales and Property Taxes in North Dakota
Sales Tax – Like many states, North Dakota has multiple tax rates. One at the state level and another at the local level. The state rate is 5.00% the average local rate is 1.97% (total average rate for North Dakota Sales Tax is 6.97%). Another thing to be aware of, North Dakota uses a broad base for charging sales tax. Similar to states such as Hawaii, New Mexico, and South Dakota, they charge sales tax on many business-to-business personal services.
Property Taxes in North Dakota – the average property tax rate for residential property in the state of North Dakota is 0.95%, which is close to the national median (1.08%).
North Dakota DMV fees
North Dakota’s DMV fees are based on how old the vehicle is, not its value. Therefore, the DMV fees are not deductible. To learn more, here’s a link to the North Dakota DMV website.
North Dakota Domicile
If you maintain a permanent place of abode for over 7 months (210 days), you are considered a North Dakota resident.
North Dakota Tax on Social Security Benefits
Even though there is a state income tax in North Dakota, they do not assess state income tax on social security benefits.
Payroll Taxes in North Dakota
Unemployment taxes usually consist of three factors. They are the wage base, range of rates, number of schedules. Below is an outline of the three:
- Wage Base – Indiana has a wage base of $40,800
- UI Rates – range from 0.08% to 9.69%
- Schedules – North Dakota does not have any UI Schedules.
North Dakota Business Entities – LLCs
North Dakota is an inexpensive state to open an LLC. Here are some important facts:
- North Dakota’s annual LLC fee at only $50.
- When you register with the state, you pay a one time fee of $135
- Secretary of State of North Dakota website – click here
North Dakota Tax Contact Phone Numbers
Important phone numbers for the North Dakota Department of Taxation:
- Website: www.tax.nd.gov
- Phone# for Individuals – (701) 328-1247
- Phone# for Businesses – (701) 328-1249