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Tax Incentives
North Dakota provides sales tax exemptions for equipment and materials used in manufacturing and other targeted industries. A new or expanding plant may be exempt from sales and use tax on purchases of machinery or equipment used for manufacturing, agricultural commodity processing or recycling.
A sales and use tax exemption is allowed for purchases of computer and telecommunications equipment that are an integral part of a primary sector business or a physical or economic expansion of a primary sector business. The exemption does not extend to the purchase of replacement equipment.
For example, $10,000,000 in qualified equipment purchases would receive a $500,000 savings (five percent state sales tax).
Construction materials used to construct and agricultural processing facility may be exempt from sales and use taxes. Additional exemptions for all businesses include electricity, interstate communications over phone lines and a natural gas rate discounted to 2.0 percent.
Applications for sales tax exemptions are made through the State Tax Commissioner. If the exemption is not approved prior to purchase, the manufacturer, recycler, agricultural commodity processor or other primary sector business must pay the tax and apply for a refund.
Related Links:
Office of State Tax Commissioner
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