Tax Incentives
North Dakota offers businesses a favorable tax climate that promotes growth and opportunity. From traditional tax incentives to the innovative Renaissance Zones, North Dakota has much to offer. For more information, browse the following publication:
North Dakota Tax Incentives for Businesses
Property Tax Exemptions
Any new or expanding business project may be granted a property tax exemption for up to 5 years. Ag processing businesses may qualify for 10 year exemptions. Abatements are most commonly provided on a declining, straight-line 5-year 100%, 80%, 60%, 40%, 20% basis over the period of exemption.
Research Expense Tax Credits
North Dakota offers the most attractive research expense tax credit rates in the United States. Companies conducting qualified research activities qualify for tax credits of 25% for the first $100,000 and 20% for amounts over $100,000 in research expenses. Rates will apply to companies conducting new research in North Dakota and will last for 10 tax years. After 10 years, the rates will be 25% for the first $100,000 of qualified research and 8% for amounts exceeding $100,000.
Personal Property Tax Exemption
North Dakota exempts all personal property from property taxation except that of certain oil and gas refineries and utilities.
Sales Tax Exemption
A new or expanding plant may exempt machinery or equipment from sales and use taxes if it is used primarily for manufacturing or agricultural processing or is used solely for 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.
Construction materials used to construct an agricultural processing facility are exempt from sales and use taxes.
A sales and use tax exemption is allowed for purchasing building materials, production equipment and other tangible personal property used in the construction of wind-powered electrical generating facilities between July 2001 and January 2011.
Income Tax Exemption
A corporation doing business in North Dakota for the first time may take an income tax credit equal to:
- 1% of wages and salaries paid during the tax year for each of the first three years of operation
- 1⁄2% of wages and salaries paid during the tax years for the fourth and fifth years.
A new or expanding qualified company may apply to the North Dakota Industrial Commission for a 5 year State Corporate Income Tax exemption.
Renaissance Zones
Business and individuals may qualify for income and property tax exemptions and credits for purchasing leasing or making improvements to real property located in a North Dakota renaissance zone. An income or financial institution tax credit is also allowed to taxpayers who invest in a renaissance fund organization established by a renaissance zone.
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