2013 North Dakota Century Code
Title 57 Taxation
Chapter 57-39.2 Sales Tax
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CHAPTER 57-39.2
SALES TAX
57-39.2-01. (Effective through June 30, 2017) Definitions.
The following words, terms, and phrases, when used in this chapter, have the meaning
ascribed to them in this section, unless the context clearly indicates a different meaning:
1. "Bundled transaction" means the retail sale of two or more products, except real
property and services to real property, where the products are otherwise distinct and
identifiable, and the products are sold for one nonitemized price. A bundled transaction
does not include the sale of any products in which the sales price varies, or is
negotiable, based on the selection by the purchaser of the products included in the
transaction.
a. Distinct and identifiable products do not include:
(1) Packaging such as containers, boxes, sacks, bags, and bottles or other
materials such as wrapping, labels, tags, and instruction guides that
accompany the retail sale of the products and are incidental or immaterial to
the retail sale. Examples of packaging that are incidental or immaterial
include grocery sacks, shoeboxes, drycleaning garment bags, and express
delivery envelopes and boxes.
(2) A product provided free of charge with the required purchase of another
product. A product is provided free of charge if the sales price of the product
purchased does not vary depending on the inclusion of the product provided
free of charge.
(3) Items included in the definition of gross receipts.
b. The phrase "one nonitemized price" does not include a price that is separately
identified by product on binding sales or other supporting sales-related
documentation made available to the customer in paper or electronic form,
including an invoice, bill of sale, receipt, contract, service agreement, lease
agreement, periodic notice of rates and services, rate card, or price list.
c. A transaction that otherwise meets the definition of a bundled transaction as
defined in this section is not a "bundled transaction" if it is:
(1) The retail sale of tangible personal property and a service where the
tangible personal property is essential to the use of the service, and is
provided exclusively in connection with the service, and the true object of
the transaction is the service;
(2) The retail sale of services where one service is provided that is essential to
the use or receipt of a second service and the first service is provided
exclusively in connection with the second service and the true object of the
transaction is the second service;
(3) A transaction that includes taxable products and nontaxable products and
the purchase price or sales price of the taxable products is de minimis.
(a) "De minimis" means the seller's purchase price or sales price of the
taxable products is ten percent or less of the total purchase price or
sales price of the bundled products.
(b) Sellers shall use either the purchase price or the sales price of the
products to determine if the taxable products are de minimis. Sellers
may not use a combination of the purchase price and sales price of
the products to determine if the taxable products are de minimis.
(c) Sellers shall use the full term of a service contract to determine if the
taxable products are de minimis; or
(4) The retail sale of exempt tangible personal property and taxable tangible
personal property where:
(a) The transaction includes food and food ingredients, drugs, durable
medical equipment, mobility-enhancing equipment, over-the-counter
drugs, prosthetic devices, or medical supplies; and
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If the seller's purchase price or sales price of the taxable tangible
personal property is fifty percent or less of the total purchase price or
sales price of the bundled tangible personal property. Sellers may not
use a combination of the purchase price and sales price of the
tangible personal property when making the fifty percent determination
for a transaction.
"Business" includes any activity engaged in by any person or caused to be engaged in
by the person with the object of gain, benefit, or advantage, either direct or indirect.
"Certified automated system" means software certified under chapter 57-39.4 to
calculate the tax imposed by each jurisdiction on a transaction, determine the amount
of tax to remit to the state, and maintain a record of the transaction.
"Certified service provider" means an agent certified under the agreement adopted
under chapter 57-39.4 to perform all of the seller's sales and use tax functions, other
than the seller's obligation to remit taxes on its own purchases.
"Commissioner" means the tax commissioner of the state of North Dakota.
"Computer software maintenance contract" is a contract that obligates a vendor of
computer software to provide a customer with future updates or upgrades to computer
software, support services with respect to computer software, or both.
"Delivery charges" means charges by the seller for preparation and delivery to a
location designated by the purchaser of personal property or services. For purposes of
this subsection, "preparation and delivery" includes transportation, shipping, postage,
handling, crating, and packing. If shipment includes exempt property and taxable
property, the seller should allocate the delivery charge by using a percentage based
on:
a. The total sales price of the taxable property compared to the total sales price of
all property in the shipment; or
b. The total weight of the taxable property compared to the total weight of all
property in the shipment.
The seller must tax the percentage of the delivery charge allocated to the taxable
property but does not have to tax the percentage allocated to the exempt property.
"Direct mail" means printed material delivered or distributed by United States mail or
other delivery service to a mass audience or to addresses on a mailing list provided by
the purchaser or at the direction of the purchaser when the cost of the items are not
billed directly to the recipients. "Direct mail" includes tangible personal property
supplied directly or indirectly by the purchaser to the direct mail seller for inclusion in
the package containing the printed material. "Direct mail" does not include multiple
items of printed material delivered to a single address.
"Drug" means a compound, substance, or preparation and any component of a
compound, substance, or preparation, other than food and food ingredients, dietary
supplements, or alcoholic beverages:
a. Recognized in the official United States pharmacopoeia, official homeopathic
pharmacopoeia of the United States, or official national formulary, or any
supplement of any of these publications;
b. Intended for use in the diagnosis, cure, mitigation, treatment, or prevention of
disease; or
c. Intended to affect the structure or any function of the body.
"Farm machinery" means all vehicular implements and attachment units, designed and
sold for direct use in planting, cultivating, or harvesting farm products or used in
connection with the production of agricultural produce or products, livestock, or poultry
on farms, which are operated, drawn, or propelled by motor or animal power. "Farm
machinery" does not include vehicular implements operated wholly by hand or a motor
vehicle required to be registered under chapter 57-40.3. "Farm machinery" does not
include machinery that may be used for other than agricultural purposes, including
tires, farm machinery repair parts, tools, shop equipment, grain bins, feed bunks,
fencing materials, and other farm supplies and equipment. For purposes of this
subsection, "attachment unit" means any part or combination of parts having an
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independent function, other than farm machinery repair parts, which when attached or
affixed to farm machinery is used exclusively for agricultural purposes.
"Farm machinery repair parts" means repair or replacement parts for farm machinery
that have a specific or generic part number assigned by the manufacturer of the farm
machinery. "Farm machinery repair parts" do not include tires, fluid, gas, grease,
lubricant, wax, or paint.
a. "Gross receipts" means the measure subject to sales tax and means the total
amount of consideration, including cash, credit, property, and services, for which
personal property or services are sold, leased, or rented, valued in money,
whether received in money or otherwise, without any deduction for the following:
(1) The seller's cost of the property sold;
(2) The cost of materials used, labor or service costs, interest, losses, all costs
of transportation to the seller, all taxes imposed on the seller, and any other
expense of the seller;
(3) Charges by the seller for any services necessary to complete the sale, other
than delivery and installation charges;
(4) Delivery charges; and
(5) Credit for any trade-in, as determined by state law.
b. "Gross receipts" also includes consideration received by the seller from third
parties if:
(1) The seller actually receives consideration from a party other than the
purchaser and the consideration is directly related to a price reduction or
discount on the sale;
(2) The seller has an obligation to pass the price reduction or discount through
to the purchaser;
(3) The amount of the consideration attributable to the sale is fixed and
determinable by the seller at the time of the sale of the item to the
purchaser; and
(4) One of the following criteria is met:
(a) The purchaser presents a coupon, certificate, or other documentation
to the seller to claim a price reduction or discount where the coupon,
certificate, or documentation is authorized, distributed, or granted by a
third party with the understanding that the third party will reimburse
any seller to whom the coupon, certificate, or documentation is
presented;
(b) The purchaser provides identification to the seller to show that the
purchaser is a member of a group or organization entitled to a price
reduction or discount, however, a "preferred customer" card that is
available to any patron does not constitute membership in such a
group; or
(c) The price reduction or discount is identified as a third-party price
reduction or discount on the invoice received by the purchaser or on a
coupon, certificate, or other documentation presented by the
purchaser.
c. "Gross receipts" also includes the total amount of sales of every clerk, auctioneer,
agent, or factor selling tangible personal property owned by any other retailer.
d. "Gross receipts" does not include:
(1) Discounts, including cash, term, or coupons that are not reimbursed by a
third party, which are allowed by a seller and taken by a purchaser on a
sale;
(2) Interest, financing, and carrying charges from credit extended on the sale of
personal property or services, if the amount is separately stated on the
invoice, bill of sale, or similar document given to the purchaser;
(3) Any taxes legally imposed directly on the consumer that are separately
stated on the invoice, bill of sale, or similar documents given to the
purchaser; and
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The sale price of property returned by a customer when the full sale price is
refunded either in cash or credit. When tangible personal property is taken
in trade or in a series of trades as a credit or part payment of a retail sale
taxable under this chapter, if the tangible personal property traded in will be
subject to tax imposed by chapter 57-39.5 or 57-40.3 or if the tangible
personal property traded in is used farm machinery or used irrigation
equipment, the credit or trade-in value allowed by the retailer is not included
in gross receipts of the retailer.
"Irrigation equipment repair parts" means repair or replacement parts for irrigation
equipment which have a specific or generic part number assigned by the manufacturer
of the irrigation equipment. The term does not include tires, fluid, gas, grease,
lubricant, wax, or paint.
"Lease or rental" means any transfer of possession or control of tangible personal
property for a fixed or indeterminate term for consideration. A lease or rental may
include future options to purchase or extend. "Lease or rental" does not include:
a. A transfer of possession or control of property under a security agreement or
deferred payment plan, which requires the transfer upon completion of the
required payments;
b. A transfer of possession or control of property under an agreement that requires
the transfer of title upon completion of required payments and payment of an
option price that does not exceed the greater of one hundred dollars or one
percent of the total required payments; or
c. Providing tangible personal property with an operator for a fixed or indeterminate
period of time. A condition of this exclusion is that the operator is necessary for
the equipment to perform as designed. For the purpose of this subdivision, an
operator must do more than maintain, inspect, or set up the tangible personal
property.
This definition will be applied only prospectively from the date of adoption and will
have no retroactive impact on existing leases or rentals.
"Local governmental unit" means incorporated cities, counties, school districts, and
townships.
"Mandatory computer software maintenance contract" is a computer software
maintenance contract that the customer is obligated by contract to purchase as a
condition to the retail sale of computer software.
"Optional computer software maintenance contract" is a computer software
maintenance contract that the customer is not obligated to purchase as a condition to
the retail sale of computer software.
"Person" includes any individual, firm, partnership, joint venture, association,
corporation, limited liability company, estate, business trust, receiver, or any other
group or combination acting as a unit and the plural as well as the singular number.
"Prescription" means an order, formula, or recipe issued in any form of oral, written,
electronic, or other means of transmission by a person authorized by the laws of this
state to prescribe drugs.
"Relief agency" means the state, any county, city and county, city or district thereof, or
an agency engaged in actual relief work.
"Retail sale" or "sale at retail" means any sale, lease, or rental for any purpose other
than for resale, sublease, or subrental. "Retail sale" or "sale at retail" includes the sale,
including the leasing or renting, to a consumer or to any person for any purpose, other
than for processing or for resale, of tangible personal property; the sale of steam, gas,
and communication service to retail consumers or users; the sale of vulcanizing,
recapping, and retreading services for tires; the ordering, selecting, or aiding a
customer to select any goods, wares, or merchandise from any price list or catalog,
which the customer might order, or be ordered for such customer to be shipped
directly to such customer; the sale or furnishing of hotel, motel, or tourist court
accommodations, tickets, or admissions to any place of amusement, athletic event, or
place of entertainment; and the sales of magazines and other periodicals. By the term
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"processing" is meant any tangible personal property, including containers which it is
intended, by means of fabrication, compounding, manufacturing, producing, or
germination shall become an integral or an ingredient or component part of other
tangible personal property intended to be sold ultimately at retail. The sale of an item
of tangible personal property for the purpose of incorporating it in or attaching it to real
property must be considered as a sale of tangible personal property for a purpose
other than for processing; the delivery of possession within the state of North Dakota
of tangible personal property by a wholesaler or distributor to an out-of-state retailer
who does not hold a North Dakota retail sales tax permit or to a person who by
contract incorporates such tangible personal property into, or attaches it to, real
property situated in another state may not be considered a taxable sale if such delivery
of possession would not be treated as a taxable sale in that state. As used in this
subsection, the word "consumer" includes any hospital, infirmary, sanatorium, nursing
home, home for the aged, or similar institution that furnishes services to any patient or
occupant. The sale of an item of tangible personal property to a person under a
finance leasing agreement over the term of which the property will be substantially
consumed must be considered a retail sale if the purchaser elects to treat it as such by
paying or causing the transferor to pay the sales tax thereon to the commissioner on
or before the last day on which payments may be made without penalty as provided in
section 57-39.2-12.
"Retailer" or "seller" includes every person engaged in the business of leasing or
renting hotel, motel, or tourist court accommodations, and every person engaged in
the business of selling tangible goods, wares, or merchandise at retail, or furnishing of
steam, gas, and communication services, or tickets or admissions to places of
amusement, entertainment, and athletic events, or magazines or other periodicals; and
includes any person as herein defined who by contract or otherwise agrees to furnish
for a consideration a totally or partially finished product consisting in whole or in part of
tangible personal property subject to the sales tax herein provided, and all items of
tangible personal property entering into the performance of such contract as a
component part of the product agreed to be furnished under said contract shall be
subject to the sales tax herein provided and the sales tax thereon shall be collected by
the contractor from the person for whom the contract has been performed in addition
to the contract price agreed upon, and shall be remitted to the state in the manner
provided in this chapter; and shall include the state or any municipality furnishing
steam, gas, or communication service to members of the public in its proprietary
capacity. For the purpose of this chapter, retailer shall also include every clerk,
auctioneer, agent, or factor selling tangible personal property owned by any other
retailer. A retailer also includes every person who engages in regular or systematic
solicitation of a consumer market in this state by the distribution of catalogs,
periodicals, advertising fliers, or other advertising, or by means of print, radio or
television media, by mail, telegraphy, telephone, computer database, cable, optic,
microwave, or other communication system.
"Sale" means any transfer of title or possession, exchange or barter, conditional or
otherwise, in any manner or by any means whatever, for a consideration, and includes
the furnishing or service of steam, gas, or communication, the furnishing of hotel,
motel, or tourist court accommodations, the furnishing of tickets or admissions to any
place of amusement, athletic event, or place of entertainment, and sales of magazines
and other periodicals. Provided, the words "magazines and other periodicals" as used
in this subsection do not include newspapers nor magazines or periodicals that are
furnished free by a nonprofit corporation or organization to its members or because of
payment by its members of membership fees or dues.
"Sales tax" means the tax levied under section 57-39.2-02.1 or a conforming tax
imposed under home rule authority by a city or county.
"Tangible personal property" means personal property that can be seen, weighed,
measured, felt, or touched or that is in any other manner perceptible to the senses.
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"Tangible personal property" includes electricity, water, gas, steam, and prewritten
computer software.
26. "Telecommunications company" means a person engaged in the furnishing of
telecommunications service within this state.
27. "Telecommunications service" means the electronic transmission, conveyance, or
routing of voice, data, audio, video, or any other information or signals to a point, or
between or among points. The term includes such transmission, conveyance, or
routing in which computer processing applications are used to act on the form, code,
or protocol of the content for purposes of transmission, conveyance, or routing without
regard to whether the service is referred to as voice over internet protocol services or
is classified by the federal communications commission as enhanced or value-added.
The term does not include:
a. Data processing and information services that allow data to be generated,
acquired, stored, processed, or retrieved and delivered by an electronic
transmission to a purchaser where the purchaser's primary purpose for the
underlying transaction is the processed data or information;
b. Installation or maintenance of wiring or equipment on a customer's premises;
c. Tangible personal property;
d. Advertising, including directory advertising;
e. Billing and collection services provided to third parties;
f. Internet access service;
g. Radio and television audio and video programming services, regardless of the
medium, including the furnishing of transmission, conveyance, and routing of
such services by the programming service provider. Radio and television audio
and video programming services include cable service as defined in 47 U.S.C.
522(6) and audio and video programming services delivered by commercial
mobile radio service providers, as defined in 47 CFR 20.3;
h. Ancillary services; or
i. Digital products delivered electronically, including software, music, video, reading
materials, and ringtones.
(Effective after June 30, 2017) Definitions. The following words, terms, and phrases,
when used in this chapter, have the meaning ascribed to them in this section, unless the context
clearly indicates a different meaning:
1. "Bundled transaction" means the retail sale of two or more products, except real
property and services to real property, where the products are otherwise distinct and
identifiable, and the products are sold for one nonitemized price. A bundled transaction
does not include the sale of any products in which the sales price varies, or is
negotiable, based on the selection by the purchaser of the products included in the
transaction.
a. Distinct and identifiable products do not include:
(1) Packaging such as containers, boxes, sacks, bags, and bottles or other
materials such as wrapping, labels, tags, and instruction guides that
accompany the retail sale of the products and are incidental or immaterial to
the retail sale. Examples of packaging that are incidental or immaterial
include grocery sacks, shoeboxes, drycleaning garment bags, and express
delivery envelopes and boxes.
(2) A product provided free of charge with the required purchase of another
product. A product is provided free of charge if the sales price of the product
purchased does not vary depending on the inclusion of the product provided
free of charge.
(3) Items included in the definition of gross receipts.
b. The phrase "one nonitemized price" does not include a price that is separately
identified by product on binding sales or other supporting sales-related
documentation made available to the customer in paper or electronic form,
including an invoice, bill of sale, receipt, contract, service agreement, lease
agreement, periodic notice of rates and services, rate card, or price list.
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A transaction that otherwise meets the definition of a bundled transaction as
defined in this section is not a "bundled transaction" if it is:
(1) The retail sale of tangible personal property and a service where the
tangible personal property is essential to the use of the service, and is
provided exclusively in connection with the service, and the true object of
the transaction is the service;
(2) The retail sale of services where one service is provided that is essential to
the use or receipt of a second service and the first service is provided
exclusively in connection with the second service and the true object of the
transaction is the second service;
(3) A transaction that includes taxable products and nontaxable products and
the purchase price or sales price of the taxable products is de minimis.
(a) "De minimis" means the seller's purchase price or sales price of the
taxable products is ten percent or less of the total purchase price or
sales price of the bundled products.
(b) Sellers shall use either the purchase price or the sales price of the
products to determine if the taxable products are de minimis. Sellers
may not use a combination of the purchase price and sales price of
the products to determine if the taxable products are de minimis.
(c) Sellers shall use the full term of a service contract to determine if the
taxable products are de minimis; or
(4) The retail sale of exempt tangible personal property and taxable tangible
personal property where:
(a) The transaction includes food and food ingredients, drugs, durable
medical equipment, mobility-enhancing equipment, over-the-counter
drugs, prosthetic devices, or medical supplies; and
(b) If the seller's purchase price or sales price of the taxable tangible
personal property is fifty percent or less of the total purchase price or
sales price of the bundled tangible personal property. Sellers may not
use a combination of the purchase price and sales price of the
tangible personal property when making the fifty percent determination
for a transaction.
"Business" includes any activity engaged in by any person or caused to be engaged in
by the person with the object of gain, benefit, or advantage, either direct or indirect.
"Certified automated system" means software certified under chapter 57-39.4 to
calculate the tax imposed by each jurisdiction on a transaction, determine the amount
of tax to remit to the state, and maintain a record of the transaction.
"Certified service provider" means an agent certified under the agreement adopted
under chapter 57-39.4 to perform all of the seller's sales and use tax functions, other
than the seller's obligation to remit taxes on its own purchases.
"Commissioner" means the tax commissioner of the state of North Dakota.
"Computer software maintenance contract" is a contract that obligates a vendor of
computer software to provide a customer with future updates or upgrades to computer
software, support services with respect to computer software, or both.
"Delivery charges" means charges by the seller for preparation and delivery to a
location designated by the purchaser of personal property or services. For purposes of
this subsection, "preparation and delivery" includes transportation, shipping, postage,
handling, crating, and packing. If shipment includes exempt property and taxable
property, the seller should allocate the delivery charge by using a percentage based
on:
a. The total sales price of the taxable property compared to the total sales price of
all property in the shipment; or
b. The total weight of the taxable property compared to the total weight of all
property in the shipment.
The seller must tax the percentage of the delivery charge allocated to the taxable
property but does not have to tax the percentage allocated to the exempt property.
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"Direct mail" means printed material delivered or distributed by United States mail or
other delivery service to a mass audience or to addresses on a mailing list provided by
the purchaser or at the direction of the purchaser when the cost of the items are not
billed directly to the recipients. "Direct mail" includes tangible personal property
supplied directly or indirectly by the purchaser to the direct mail seller for inclusion in
the package containing the printed material. "Direct mail" does not include multiple
items of printed material delivered to a single address.
"Drug" means a compound, substance, or preparation and any component of a
compound, substance, or preparation, other than food and food ingredients, dietary
supplements, or alcoholic beverages:
a. Recognized in the official United States pharmacopoeia, official homeopathic
pharmacopoeia of the United States, or official national formulary, or any
supplement of any of these publications;
b. Intended for use in the diagnosis, cure, mitigation, treatment, or prevention of
disease; or
c. Intended to affect the structure or any function of the body.
"Farm machinery" means all vehicular implements and attachment units, designed and
sold for direct use in planting, cultivating, or harvesting farm products or used in
connection with the production of agricultural produce or products, livestock, or poultry
on farms, which are operated, drawn, or propelled by motor or animal power. "Farm
machinery" does not include vehicular implements operated wholly by hand or a motor
vehicle required to be registered under chapter 57-40.3. "Farm machinery" does not
include machinery that may be used for other than agricultural purposes, including
tires, farm machinery repair parts, tools, shop equipment, grain bins, feed bunks,
fencing materials, and other farm supplies and equipment. For purposes of this
subsection, "attachment unit" means any part or combination of parts having an
independent function, other than farm machinery repair parts, which when attached or
affixed to farm machinery is used exclusively for agricultural purposes.
"Farm machinery repair parts" means repair or replacement parts for farm machinery
that have a specific or generic part number assigned by the manufacturer of the farm
machinery. "Farm machinery repair parts" do not include tires, fluid, gas, grease,
lubricant, wax, or paint.
a. "Gross receipts" means the measure subject to sales tax and means the total
amount of consideration, including cash, credit, property, and services, for which
personal property or services are sold, leased, or rented, valued in money,
whether received in money or otherwise, without any deduction for the following:
(1) The seller's cost of the property sold;
(2) The cost of materials used, labor or service costs, interest, losses, all costs
of transportation to the seller, all taxes imposed on the seller, and any other
expense of the seller;
(3) Charges by the seller for any services necessary to complete the sale, other
than delivery and installation charges;
(4) Delivery charges; and
(5) Credit for any trade-in, as determined by state law.
b. "Gross receipts" also includes consideration received by the seller from third
parties if:
(1) The seller actually receives consideration from a party other than the
purchaser and the consideration is directly related to a price reduction or
discount on the sale;
(2) The seller has an obligation to pass the price reduction or discount through
to the purchaser;
(3) The amount of the consideration attributable to the sale is fixed and
determinable by the seller at the time of the sale of the item to the
purchaser; and
(4) One of the following criteria is met:
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The purchaser presents a coupon, certificate, or other documentation
to the seller to claim a price reduction or discount where the coupon,
certificate, or documentation is authorized, distributed, or granted by a
third party with the understanding that the third party will reimburse
any seller to whom the coupon, certificate, or documentation is
presented;
(b) The purchaser provides identification to the seller to show that the
purchaser is a member of a group or organization entitled to a price
reduction or discount, however, a "preferred customer" card that is
available to any patron does not constitute membership in such a
group; or
(c) The price reduction or discount is identified as a third-party price
reduction or discount on the invoice received by the purchaser or on a
coupon, certificate, or other documentation presented by the
purchaser.
c. "Gross receipts" also includes the total amount of sales of every clerk, auctioneer,
agent, or factor selling tangible personal property owned by any other retailer.
d. "Gross receipts" does not include:
(1) Discounts, including cash, term, or coupons that are not reimbursed by a
third party, which are allowed by a seller and taken by a purchaser on a
sale;
(2) Interest, financing, and carrying charges from credit extended on the sale of
personal property or services, if the amount is separately stated on the
invoice, bill of sale, or similar document given to the purchaser;
(3) Any taxes legally imposed directly on the consumer that are separately
stated on the invoice, bill of sale, or similar documents given to the
purchaser; and
(4) The sale price of property returned by a customer when the full sale price is
refunded either in cash or credit. When tangible personal property is taken
in trade or in a series of trades as a credit or part payment of a retail sale
taxable under this chapter, if the tangible personal property traded in will be
subject to tax imposed by chapter 57-39.5 or 57-40.3 or if the tangible
personal property traded in is used farm machinery or used irrigation
equipment, the credit or trade-in value allowed by the retailer is not included
in gross receipts of the retailer.
"Irrigation equipment repair parts" means repair or replacement parts for irrigation
equipment which have a specific or generic part number assigned by the manufacturer
of the irrigation equipment. The term does not include tires, fluid, gas, grease,
lubricant, wax, or paint.
"Lease or rental" means any transfer of possession or control of tangible personal
property for a fixed or indeterminate term for consideration. A lease or rental may
include future options to purchase or extend. "Lease or rental" does not include:
a. A transfer of possession or control of property under a security agreement or
deferred payment plan, which requires the transfer upon completion of the
required payments;
b. A transfer of possession or control of property under an agreement that requires
the transfer of title upon completion of required payments and payment of an
option price that does not exceed the greater of one hundred dollars or one
percent of the total required payments; or
c. Providing tangible personal property with an operator for a fixed or indeterminate
period of time. A condition of this exclusion is that the operator is necessary for
the equipment to perform as designed. For the purpose of this subdivision, an
operator must do more than maintain, inspect, or set up the tangible personal
property.
This definition will be applied only prospectively from the date of adoption and will
have no retroactive impact on existing leases or rentals.
Page No. 9
15.
16.
17.
18.
19.
20.
21.
22.
"Local governmental unit" means incorporated cities, counties, school districts, and
townships.
"Mandatory computer software maintenance contract" is a computer software
maintenance contract that the customer is obligated by contract to purchase as a
condition to the retail sale of computer software.
"Optional computer software maintenance contract" is a computer software
maintenance contract that the customer is not obligated to purchase as a condition to
the retail sale of computer software.
"Person" includes any individual, firm, partnership, joint venture, association,
corporation, limited liability company, estate, business trust, receiver, or any other
group or combination acting as a unit and the plural as well as the singular number.
"Prescription" means an order, formula, or recipe issued in any form of oral, written,
electronic, or other means of transmission by a person authorized by the laws of this
state to prescribe drugs.
"Relief agency" means the state, any county, city and county, city or district thereof, or
an agency engaged in actual relief work.
"Retail sale" or "sale at retail" means any sale, lease, or rental for any purpose other
than for resale, sublease, or subrental. "Retail sale" or "sale at retail" includes the sale,
including the leasing or renting, to a consumer or to any person for any purpose, other
than for processing or for resale, of tangible personal property; the sale of steam, gas,
and communication service to retail consumers or users; the sale of vulcanizing,
recapping, and retreading services for tires; the ordering, selecting, or aiding a
customer to select any goods, wares, or merchandise from any price list or catalog,
which the customer might order, or be ordered for such customer to be shipped
directly to such customer; the sale or furnishing of hotel, motel, or tourist court
accommodations, tickets, or admissions to any place of amusement, athletic event, or
place of entertainment; and the sales of magazines and other periodicals. By the term
"processing" is meant any tangible personal property, including containers which it is
intended, by means of fabrication, compounding, manufacturing, producing, or
germination shall become an integral or an ingredient or component part of other
tangible personal property intended to be sold ultimately at retail. The sale of an item
of tangible personal property for the purpose of incorporating it in or attaching it to real
property must be considered as a sale of tangible personal property for a purpose
other than for processing; the delivery of possession within the state of North Dakota
of tangible personal property by a wholesaler or distributor to an out-of-state retailer
who does not hold a North Dakota retail sales tax permit or to a person who by
contract incorporates such tangible personal property into, or attaches it to, real
property situated in another state may not be considered a taxable sale if such delivery
of possession would not be treated as a taxable sale in that state. As used in this
subsection, the word "consumer" includes any hospital, infirmary, sanatorium, nursing
home, home for the aged, or similar institution that furnishes services to any patient or
occupant. The sale of an item of tangible personal property to a person under a
finance leasing agreement over the term of which the property will be substantially
consumed must be considered a retail sale if the purchaser elects to treat it as such by
paying or causing the transferor to pay the sales tax thereon to the commissioner on
or before the last day on which payments may be made without penalty as provided in
section 57-39.2-12.
"Retailer" or "seller" includes every person engaged in the business of leasing or
renting hotel, motel, or tourist court accommodations, and every person engaged in
the business of selling tangible goods, wares, or merchandise at retail, or furnishing of
steam, gas, and communication services, or tickets or admissions to places of
amusement, entertainment, and athletic events, or magazines or other periodicals; and
includes any person as herein defined who by contract or otherwise agrees to furnish
for a consideration a totally or partially finished product consisting in whole or in part of
tangible personal property subject to the sales tax herein provided, and all items of
tangible personal property entering into the performance of such contract as a
Page No. 10
23.
24.
25.
component part of the product agreed to be furnished under said contract shall be
subject to the sales tax herein provided and the sales tax thereon shall be collected by
the contractor from the person for whom the contract has been performed in addition
to the contract price agreed upon, and shall be remitted to the state in the manner
provided in this chapter; and shall include the state or any municipality furnishing
steam, gas, or communication service to members of the public in its proprietary
capacity. For the purpose of this chapter, retailer shall also include every clerk,
auctioneer, agent, or factor selling tangible personal property owned by any other
retailer. A retailer also includes every person who engages in regular or systematic
solicitation of a consumer market in this state by the distribution of catalogs,
periodicals, advertising fliers, or other advertising, or by means of print, radio or
television media, by mail, telegraphy, telephone, computer database, cable, optic,
microwave, or other communication system.
"Sale" means any transfer of title or possession, exchange or barter, conditional or
otherwise, in any manner or by any means whatever, for a consideration, and includes
the furnishing or service of steam, gas, or communication, the furnishing of hotel,
motel, or tourist court accommodations, the furnishing of tickets or admissions to any
place of amusement, athletic event, or place of entertainment, and sales of magazines
and other periodicals. Provided, the words "magazines and other periodicals" as used
in this subsection do not include newspapers nor magazines or periodicals that are
furnished free by a nonprofit corporation or organization to its members or because of
payment by its members of membership fees or dues.
"Sales tax" means the tax levied under section 57-39.2-02.1 or a conforming tax
imposed under home rule authority by a city or county.
"Tangible personal property" means personal property that can be seen, weighed,
measured, felt, or touched or that is in any other manner perceptible to the senses.
"Tangible personal property" includes electricity, water, gas, steam, and prewritten
computer software.
57-39.2-02. Sales tax imposed.
Repealed by I.M. approved November 2, 1976, S.L. 1977, ch. 593, § 6.
57-39.2-02.1. Sales tax imposed.
1. Except as otherwise expressly provided in this chapter, there is imposed a tax of five
percent upon the gross receipts of retailers from all sales at retail, including the leasing
or renting of tangible personal property as provided in this section, within this state of
the following to consumers or users:
a. Tangible personal property, consisting of goods, wares, or merchandise, and
bundled transactions consisting entirely of tangible personal property.
b. The furnishing or service of communication services including one-way and
two-way telecommunications services or steam other than steam used for
processing agricultural products.
c. Tickets or admissions to places of amusement or entertainment or athletic events,
including amounts charged for participation in an amusement, entertainment, or
athletic activity.
d. Magazines and other periodicals.
e. The leasing or renting of a hotel or motel room or tourist court accommodations.
f. The leasing or renting of tangible personal property the transfer of title to which
has not been subjected to a retail sales tax under this chapter or a use tax under
chapter 57-40.2.
g. Sale, lease, or rental of a computer and prewritten computer software, including
prewritten computer software delivered electronically or by load and leave. For
purposes of this subdivision:
(1) "Computer" means an electronic device that accepts information in digital or
similar form and manipulates it for a result based on a sequence of
instructions.
Page No. 11
(2)
2.
"Computer software" means a set of coded instructions designed to cause a
computer or automatic data processing equipment to perform a task.
(3) "Delivered electronically" means delivered from the seller to the purchaser
by means other than tangible storage media.
(4) "Electronic" means relating to technology having electrical, digital, magnetic,
wireless, optical, electromagnetic, or similar capabilities.
(5) "Load and leave" means delivery to the purchaser by use of a tangible
storage media when the tangible storage media is not physically transferred
to the purchaser.
(6) "Prewritten computer software" means computer software, including
prewritten upgrades, which is not designed and developed by the author or
other creator to the specifications of a specific purchaser. The combining of
two or more "prewritten computer software" programs or prewritten portions
thereof does not cause the combination to be other than "prewritten
computer software". "Prewritten computer software" includes software
designed and developed by the author or other creator to the specifications
of a specific purchaser when it is sold to a person other than the purchaser.
If a person modifies or enhances "computer software" of which the person is
not the author or creator, the person is deemed to be the author or creator
only of such person's modifications or enhancements. "Prewritten computer
software" or a prewritten portion thereof that is modified or enhanced to any
degree, if such modification or enhancement is designed and developed to
the specifications of a specific purchaser, remains "prewritten computer
software". However, if there is a reasonable, separately stated charge or an
invoice or other statement of the price given to the purchaser for such
modification or enhancement, such modification or enhancement shall not
constitute "prewritten computer software".
h. A mandatory computer software maintenance contract for prewritten computer
software.
i. An optional computer software maintenance contract for prewritten computer
software that provides only software upgrades or updates or an optional
computer software maintenance contract for prewritten computer software that is
a bundled transaction and provides software upgrades or updates and support
services.
For purposes of manufactured homes, as defined in section 41-09-02, there is
imposed a tax of three percent upon the:
a. Gross receipts of retailers from all sales at retail of manufactured homes used for
residential or business purposes, except as provided in subsection 35 of section
57-39.2-04; or
b. Dealer's cost to purchase the manufactured home if the manufactured home is
sold in conjunction with installation in this state, and tax has not previously been
paid under subdivision a.
Installation of a manufactured home includes any method established under section
54-21.3-08.
57-39.2-03. Separate and additional tax on retail sales.
Repealed by I.M. approved November 2, 1976, S.L. 1977, ch. 593, § 6.
57-39.2-03.1. Separate and additional tax on retail sales.
Repealed by I.M. approved November 2, 1976, S.L. 1977, ch. 593, § 6.
57-39.2-03.2. Sales tax on alcoholic beverages and tobacco products.
Expired under S.L. 2003, ch. 539, § 25; S.L. 2005, ch. 582, § 2.
Page No. 12
57-39.2-03.3. Sales tax on sales through vending machines.
Gross receipts from the sale of tangible personal property costing sixteen cents or more
sold through a coin-operated vending machine are subject to the sales tax imposed by chapter
57-39.2, and gross receipts from the sale of tangible personal property costing fifteen cents or
less sold through a coin-operated vending machine are specifically exempted from the
provisions of this chapter.
57-39.2-03.4. Sales tax on carpet and drapes.
Repealed by S.L. 1995, ch. 571, § 1.
57-39.2-03.5. Reduced rate for manufacturing machinery and equipment.
Repealed by S.L. 1991, ch. 680, § 2.
57-39.2-03.6. Sales tax rate on natural gas sales.
Repealed by S.L. 2007, ch. 529, § 7.
57-39.2-03.7. Surcharge on rental motor vehicles.
A company engaged in the business of renting motor vehicles for periods of fewer than
thirty days shall collect a three percent surcharge on each rental contract at the time a vehicle of
a gross vehicle weight of ten thousand pounds [4535.92 kilograms] or less is rented from the
company in this state. A vehicle is considered rented in this state if possession is obtained by
the renter in this state. The surcharge must be computed on the total dollar amount for the
rental as stated in the rental contract, excluding taxes, fuel collections, or other ancillary
products sold to customers such as collision damage waiver, supplemental liability protection,
personal accident insurance, and personal effects coverage.
1. A surcharge under this section must be noted in the rental contract and collected in
accordance with the terms of the contract.
2. On February fifteenth of each year, a company that collects surcharges under this
section shall file a report with the commissioner stating the total amount of excise
taxes paid under chapter 57-40.3 on the rental vehicles for the preceding calendar
year and the total amount of rental motor vehicle revenues earned on rentals in this
state for the preceding calendar year. All surcharge revenues collected during the
calendar year by the company in excess of the total amount of excise taxes paid under
chapter 57-40.3 during the calendar year by the company on rental motor vehicles
must be remitted to the commissioner with the report and considered sales tax
collections under this chapter.
3. For three years after filing the report under this section, the company shall retain
copies of rental contracts and the commissioner may require the company to furnish
copies of rental contracts for purposes of ensuring compliance with this section.
57-39.2-03.8. Separate and additional sales tax on lodging.
Repealed by S.L. 2005, ch. 580, § 19.
57-39.2-03.9. Sales tax on tobacco products.
Notwithstanding any other provision of law, the sales taxes imposed by this chapter apply to
the gross receipts of retailers from all sales at retail of cigarettes, cigars, and other tobacco
products. For purposes of this section, "gross receipts" from the sale of cigarettes, cigars, and
other tobacco products includes any other taxes imposed on such merchandise or its use or on
the retail or other sale of such merchandise.
57-39.2-03.10. Bundled telecommunications services including exempt services.
In the case of a bundled transaction of services that includes telecommunications services,
if the price is attributable to services that are taxable and services that are nontaxable, the
portion of the price attributable to the nontaxable services is subject to tax under this chapter
Page No. 13
and chapter 57-40.2 unless the provider can reasonably identify the nontaxable portion of the
services from its books and records kept in the regular course of business.
57-39.2-04. (Effective through June 30, 2015) Exemptions.
There are specifically exempted from the provisions of this chapter and from computation of
the amount of tax imposed by it the following:
1. Gross receipts from sales of tangible personal property which this state is prohibited
from taxing under the Constitution or laws of the United States or under the
Constitution of North Dakota.
2. Gross receipts from the sales, furnishing, or service of passenger transportation
service and gross receipts from the sales, furnishing, or service of freight
transportation service when provided by a common carrier.
3. Repealed by S.L. 1971, ch. 567, § 1.
4. a. Gross receipts from sales of tickets, or admissions to state, county, district, and
local fairs.
b. Gross receipts from educational, religious, or charitable activities when the entire
amount of net receipts is expended for educational, religious, or charitable
purposes. The exemption specified in this subsection does not apply to:
(1) Gross receipts from taxable sales in excess of ten thousand dollars per
event if the activities are held in a publicly owned facility; or
(2) Gross receipts from activities if the seller competes with retailers by
maintaining inventory, conducting retail sales on a regular basis from a
permanent or seasonal location, or soliciting sales from a website prepared
for or maintained by the seller.
c. Gross receipts derived by any public school district if such receipts are expended
in accordance with section 15.1-07-10 or 15.1-07-11.
d. Gross receipts of a nonprofit music or dramatic arts organization that is exempt
from federal income taxation and is organized and operated for the presentation
of live public performances of musical or theatrical works on a regular basis.
5. Gross receipts from sales of textbooks to regularly enrolled students of a private or
public school and from sales of textbooks, yearbooks, and school supplies purchased
by a private nonprofit elementary school, secondary school, or any other nonprofit
institution of higher learning conducting courses of study similar to those conducted by
public schools in this state.
6. Gross receipts from all sales otherwise taxable under this chapter made to the United
States, an Indian tribe, or to any state, including the state of North Dakota, or any of
the subdivisions, departments, agencies, or institutions of any state. A political
subdivision of another state is exempt under this subsection only if a sale to a North
Dakota political subdivision is treated as an exempt sale in that state. The
governmental units exempted by this subsection must be issued a certificate of
exemption by the commissioner and the certificate must be presented to each retailer
whenever this exemption is claimed. For purposes of this subsection, an Indian tribe
means a tribal government agency, instrumentality, or political subdivision that
performs essential government functions and does not include business entities or
agencies the primary purpose of which is to operate a business enterprise.
7. Gross receipts from the sale of drugs sold under a doctor's prescription.
8. Gross receipts from sales of adjuvants, agrichemical tank cleaners and foam markers,
commercial fertilizers, fungicides, seed treatments, inoculants and fumigants,
herbicides, and insecticides to agricultural or commercial vegetable producers and
commercial applicators; chemicals used to preserve agricultural crops being stored;
and seeds, roots, bulbs, and small plants to commercial users or consumers for
planting or transplanting for commercial vegetable gardens or agricultural purposes.
9. Gross receipts from sales of oxygen sold to any person who purchases it upon the
written order of a doctor for the person's own use for medical purposes.
Page No. 14
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
Gross receipts from the sale of motor vehicles, farm machinery, alcoholic beverages,
gasoline, insurance premiums, gaming tickets, or any other article or product, except
as otherwise provided, upon which the state of North Dakota imposes a special tax.
Gross receipts from the sale of feed which is fed to poultry or livestock, including
breeding stock and wool-bearing stock, for the purpose of producing eggs, milk, meat,
fibers, or other products for human consumption and the gross receipts from the sale
of feed purchased for the purpose of being fed to draft or fur-bearing animals. The
word "feed" as used herein shall be construed to mean and include only salt, grains,
hays, tankage, oyster shells, mineral supplements, limestone, molasses, beet pulp,
meat and bone scraps, meal, drugs to be used as part of a feed ration, and other
generally recognized animal feeds. The term "feed" includes drugs used as part of a
feed ration, medicants, disinfectants, wormers, tonics, and like items.
Gross receipts from a sale otherwise taxable under this chapter made to a person from
an adjoining state which does not impose or levy a retail sales tax, under the following
conditions:
a. The person is in the state of North Dakota for the express purpose of making a
purchase.
b. The person furnishes to the North Dakota retailer a certificate signed by the
person in a form as the commissioner may prescribe reciting sufficient facts
establishing the exempt status of the sale. Unless the certificate is furnished it
must be presumed, until the contrary is shown, that the person was not in the
state of North Dakota for the express purpose of making a purchase.
c. The sale is fifty dollars or more.
Gross receipts from the sale of any motor vehicle taxable under the provisions of the
motor vehicle excise tax laws of North Dakota. However, gross receipts from the rental
of any motor vehicle for fewer than thirty days are not exempt but taxes imposed under
home rule authority do not apply to such rentals.
Repealed by S.L. 1969, ch. 528, § 24.
Gross receipts from sales in which a contractor furnishes to the retailer a certificate
which includes the contractor's license number assigned to the contractor under the
provisions of chapter 43-07. Such certificate shall be in the form prescribed by the
commissioner and shall be furnished by the contractor to the retailer each calendar
year prior to the making of any purchases during such calendar year from the retailer
without liability for paying the tax to the retailer. Any contractor furnishing such
certificate must report and remit the tax to the commissioner on purchases taxable
under this chapter made by the contractor in the same manner as retailers remit such
tax under this chapter.
Gross receipts from the sale of newsprint and ink used in the publication of a
newspaper.
Gross receipts from the sale of all services furnished by any hospital, infirmary,
sanatorium, nursing home, basic care facility, or similar institution to any patient or
occupant.
Repealed by S.L. 1973, ch. 480, § 6.
Repealed by S.L. 1971, ch. 555, § 3.
Gross receipts from the sale of food supplies to any public school, to any parochial or
private nonprofit school conducting courses of study similar to those conducted by
public schools in this state, or to any nonprofit organization, for use by the public,
parochial, or private school or nonprofit organization in sponsoring or conducting a
lunch program or programs in and for any such public, parochial, or private nonprofit
school.
Gross receipts from the leasing or renting of motion picture film to motion picture
exhibitors for exhibition if the sale of tickets or admissions to the exhibition of the film is
subject to the sales tax imposed by this chapter.
Gross receipts from the leasing or renting of manufactured homes, modular living
units, or sectional homes, whether or not placed on a permanent foundation, for
residential housing for periods of thirty or more consecutive days and the gross
Page No. 15
23.
24.
25.
26.
receipts from the leasing or renting of a hotel or motel room or tourist court
accommodations occupied by the same person or persons for residential housing for
periods of thirty or more consecutive days.
Food purchased by a student under a boarding contract with a college, university,
fraternity, or sorority.
Gross receipts from all sales when made to an eligible facility or emergency medical
services provider for the use or benefit of its patient or occupant. For the purposes of
this subsection:
a. "Eligible facility" means any hospital, skilled nursing facility, intermediate care
facility, or basic care facility licensed by the state department of health, or any
assisted living facility licensed by the department of human services; and
b. "Emergency medical services provider" means an emergency medical services
operation licensed by the state department of health under chapter 23-27.
Gross receipts from the sale of Bibles, hymnals, textbooks, and prayerbooks sold to
nonprofit religious organizations.
Gross receipts from sales of prosthetic devices, durable medical equipment,
mobility-enhancing equipment, or supplies for ostomy care or bladder dysfunction. For
purposes of this subsection:
a. "Durable medical equipment" means equipment, not including mobility-enhancing
equipment, for home use, including repair and replacement parts for such
equipment, which:
(1) Can withstand repeated use;
(2) Is primarily and customarily used to serve a medical purpose;
(3) Generally is not useful to a person in the absence of illness or injury; and
(4) Is not worn in or on the body.
"Durable medical equipment" includes equipment and devices designed or
intended for ostomy care and management and equipment and devices used
exclusively for a person with bladder dysfunction. An exemption certificate is not
required to obtain exemption. Repair and replacement parts as used in this
definition include all components or attachments used in conjunction with the
durable medical equipment. Repair and replacement parts do not include items
which are for single patient use only.
b. "Mobility-enhancing equipment" means equipment, not including durable medical
equipment sold under a doctor's written prescription, including repair and
replacement parts for mobility-enhancing equipment, which:
(1) Is primarily and customarily used to provide or increase the ability to move
from one place to another and which is appropriate for use either at home or
in a motor vehicle;
(2) Is not generally used by persons with normal mobility; and
(3) Does not include any motor vehicle or equipment on a motor vehicle
normally provided by a motor vehicle manufacturer.
"Mobility-enhancing equipment" includes crutches and wheelchairs for the use of
disabled persons, equipment, including manual control units, van lifts, van door
opening units, and raised roofs for attaching to or modifying a motor vehicle for
use by a permanently physically disabled person, equipment, including elevators,
dumbwaiters, chair lifts, and bedroom or bathroom lifts, whether or not sold for
attaching to real property, for use by a permanently physically disabled person in
that person's principal dwelling, and equipment, including manual control units,
for attaching to or modifying motorized implements of husbandry for use by a
permanently physically disabled person.
c. "Prosthetic device" means a replacement, corrective, or supportive device sold
under a doctor's written prescription, including repair and replacement parts for
such a device, worn on or in the body to:
(1) Artificially replace a missing portion of the body;
(2) Prevent or correct a physical deformity or malfunction; or
(3) Support a weak or deformed portion of the body.
Page No. 16
27.
28.
29.
30.
31.
32.
33.
34.
35.
"Prosthetic device" includes artificial devices individually designed, constructed,
or altered solely for the use of a particular disabled person so as to become a
brace, support, supplement, correction, or substitute for the bodily structure,
including the extremities of the individual, artificial limbs, artificial eyes, hearing
aids, and other equipment worn as a correction or substitute for any functioning
portion of the body, artificial teeth sold by a dentist, and eyeglasses when
especially designed or prescribed by an ophthalmologist, physician, oculist, or
optometrist for the personal use of the owner or purchaser.
d. "Supplies for ostomy care or bladder dysfunction" includes:
(1) Supplies designed or intended for ostomy care and management, including
collection devices, colostomy irrigation equipment and supplies, skin
barriers or skin protectors, and other supplies especially designed for use of
ostomates.
(2) Supplies to be used exclusively by a person with bladder dysfunction,
including catheters, collection devices, incontinent pads and pants, and
other items used for the care and management of bladder dysfunction.
Gross receipts from the sale of electricity.
Gross receipts from the leasing or renting of any tangible personal property upon
which a North Dakota sales tax or use tax has been paid or is payable.
Gross receipts from all sales otherwise taxable under this chapter when made to any
nonprofit organization for meals, including the containers, packages, and materials
used for wrapping food items, for delivery to persons who are confined to their homes
by illness or incapacity, including senior citizens and disabled persons, for
consumption by such shut-ins in their homes.
Gross receipts from all sales of recreational travel trailers not exceeding eight feet
[2.44 meters] in width or thirty-two feet [9.75 meters] in length which are designed to
be principally used as temporary vacation dwellings when made to persons who are
residents of other states which impose excise taxes upon registration of such
recreational travel trailers.
Gross receipts from the sale of money, including all legal tender coins and currency,
and from the sale of precious metal bullion that has been refined to a purity of not less
than nine hundred ninety-nine parts per one thousand and is in such form or condition
that its value depends upon its precious metal content and not its form.
Gross receipts from sales to nonprofit voluntary health associations which are exempt
from federal income tax under section 501(c)(3) of the United States Internal Revenue
Code [26 U.S.C. 501(c)(3)]. As used in this subsection, a voluntary health association
is an organization recognized by the internal revenue service, the national health
council, the state tax commissioner, and the North Dakota secretary of state as a
nonprofit organization that is exempt under section 501(c)(3) of the United States
Internal Revenue Code and meets the following requirements: It has been organized
and operated exclusively in providing services for the purposes of preventing and
alleviating human illness and injury. Methods used to obtain these goals would include
education, research, community service, and direct patient services, income being
derived solely from private donations with some exceptions of a minimal membership
fee. Its members are not limited to only individuals, who themselves are licensed or
otherwise legally authorized to render the same professional services as the
organization. The disbursement of funds within a volunteer health association is to be
controlled by a board of directors who work voluntarily and without pay.
Repealed by S.L. 2005, ch. 580, § 19.
Gross receipts from the sale of byproducts, arising from the processing of agricultural
products, for use in the manufacture or generation of steam or electricity.
Gross receipts from the sale of a manufactured home that has been sold, bargained,
exchanged, given away, or transferred by the person who first acquired it from a
retailer in a sale at retail and upon which the North Dakota sales tax has previously
been imposed.
Page No. 17
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
Gross receipts from all sales of insulin in all its forms dispensed pursuant to the
direction of a licensed physician, all sales of glucose usable for treatment of insulin
reactions, all sales of urine and blood testing kits and materials, and all sales of insulin
measuring and injecting devices, including insulin syringes and hypodermic needles.
Gross receipts from the sale of any aircraft taxable under the provisions of chapter
57-40.5.
Gross receipts from all sales of air carrier transportation property subject to ad valorem
property taxation pursuant to the provisions of chapters 57-06, 57-07, 57-08, 57-13,
and 57-32.
Gross receipts from sales of tangible personal property consisting of flight simulators
or mechanical or electronic equipment for use in association with a flight simulator.
Gross receipts from sales of tickets or admissions to, or sales made at, an annual
church supper or bazaar held in a publicly owned facility. For purposes of this
subsection, "annual" means occurring not more than once in any calendar year.
Gross receipts from the initial sale of beneficiated coal.
Gross receipts from electronic gaming devices licensed by the attorney general under
chapter 53-06.1.
Gross receipts from all sales made to a nonprofit medical research institute. For
purposes of this subsection, "nonprofit medical research institute" means an institute
that is a member of the association of independent research institutes, which is not a
private foundation, and which is recognized by the internal revenue service as having
exempt status under 26 U.S.C. 501(c)(3).
Gross receipts from all sales of coal that is exempt from the coal severance tax.
Gross receipts from the sale or lease of farm machinery, farm machinery repair parts,
irrigation equipment, or irrigation equipment repair parts used exclusively for
agricultural purposes.
Gross receipts from sales of tangible personal property purchased by a charitable
organization to be awarded as a prize in a raffle conducted in accordance with law if
the winner of the tangible personal property will be subject to sales or use taxes upon
receiving the property.
Gross receipts from the sale of lottery tickets under chapter 53-12.1.
Gross receipts from all sales of tangible personal property purchased by a commerce
authority and made a part of the infrastructure of a commerce authority, otherwise
taxable under this chapter, if the personal property is placed within the geographic
boundaries of the political subdivisions that created the commerce authority and is
necessary and directly services infrastructure needs of the commerce authority. The
commissioner shall issue a certificate of exemption to a political subdivision exempted
by this subsection, and the political subdivision shall present the certificate of
exemption to each retailer whenever the exemption is claimed.
Gross receipts from sales of carbon dioxide used for enhanced recovery of oil or
natural gas.
Gross receipts from the sale at retail of hydrogen to power an internal combustion
engine or fuel cell and equipment used directly and exclusively in production and
storage of the hydrogen by a hydrogen generation facility in this state. For purposes of
this subsection, "storage" means stationary and portable hydrogen containers or
pressure vessels, piping, tubing, fittings, gaskets, controls, valves, gauges, pressure
regulators, safety relief devices, and other accessories intended for hydrogen storage
containers or pressure vessels.
Gross receipts from the sale of equipment to a facility, licensed under section
57-43.2-05, to enable the facility to sell diesel fuel containing at least two percent
biodiesel or green diesel fuel as defined under section 57-43.2-01 by volume.
Gross receipts from sales within the boundaries of any reservation in this state to an
individual who resides within the boundaries of any reservation in this state and who is
an enrolled member of a federally recognized Indian tribe.
Gross receipts from sales of natural gas or sales of fuels used for heating purposes.
Page No. 18
54.
Gross receipts from the sale of items delivered electronically, including specified digital
products. For purposes of this subsection:
a. "Specified digital products" means:
(1) "Digital audio-visual works" which means a series of related images which,
when shown in succession, impart an impression of motion, together with
accompanying sounds, if any;
(2) "Digital audio works" which means works that result from the fixation of a
series of musical, spoken, or other sounds, including ringtones; and
(3) "Digital books" which means works that are generally recognized in the
ordinary and usual sense as books.
b. For purposes of the definition of "specified digital products", "transferred
electronically" means obtained by the purchaser by means other than tangible
storage media.
c. For purposes of the definition of "digital audio work", "ringtones" means digitized
sound files that are downloaded onto a device and which may be used to alert the
customer with respect to a communication.
d. "Specified digital products" may not be construed to include prewritten computer
software as that term is defined in subdivision g of subsection 1 of section
57-39.2-02.1.
55. Gross receipts from memberships, admissions, and entrance fees to activities and
events organized and operated by nonprofit social and recreation clubs organized
under section 501(c)(7) of the Internal Revenue Code [26 U.S.C. 501(c)(7)] and
operated solely by nonsalaried officers and staff.
56. Gross receipts from the sale of any potash or byproducts taxable under chapter 57-65.
57. Gross receipts from coin-operated amusement or entertainment machines.
58. (Contingent effective date - See note) Gross receipts from sales of liquefied natural
gas used for agricultural, industrial, or railroad purposes as defined in section
57-43.2-01.
(Effective after June 30, 2015) Exemptions. There are specifically exempted from the
provisions of this chapter and from computation of the amount of tax imposed by it the following:
1. Gross receipts from sales of tangible personal property which this state is prohibited
from taxing under the Constitution or laws of the United States or under the
Constitution of North Dakota.
2. Gross receipts from the sales, furnishing, or service of passenger transportation
service and gross receipts from the sales, furnishing, or service of freight
transportation service when provided by a common carrier.
3. Repealed by S.L. 1971, ch. 567, § 1.
4. a. Gross receipts from sales of tickets, or admissions to state, county, district, and
local fairs.
b. Gross receipts from educational, religious, or charitable activities when the entire
amount of net receipts is expended for educational, religious, or charitable
purposes. The exemption specified in this subsection does not apply to:
(1) Gross receipts from taxable sales in excess of ten thousand dollars per
event if the activities are held in a publicly owned facility; or
(2) Gross receipts from activities if the seller competes with retailers by
maintaining inventory, conducting retail sales on a regular basis from a
permanent or seasonal location, or soliciting sales from a website prepared
for or maintained by the seller.
c. Gross receipts derived by any public school district if such receipts are expended
in accordance with section 15.1-07-10 or 15.1-07-11.
d. Gross receipts of a nonprofit music or dramatic arts organization that is exempt
from federal income taxation and is organized and operated for the presentation
of live public performances of musical or theatrical works on a regular basis.
5. Gross receipts from sales of textbooks to regularly enrolled students of a private or
public school and from sales of textbooks, yearbooks, and school supplies purchased
by a private nonprofit elementary school, secondary school, or any other nonprofit
Page No. 19
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
institution of higher learning conducting courses of study similar to those conducted by
public schools in this state.
Gross receipts from all sales otherwise taxable under this chapter made to the United
States, an Indian tribe, or to any state, including the state of North Dakota, or any of
the subdivisions, departments, agencies, or institutions of any state. A political
subdivision of another state is exempt under this subsection only if a sale to a North
Dakota political subdivision is treated as an exempt sale in that state. The
governmental units exempted by this subsection must be issued a certificate of
exemption by the commissioner and the certificate must be presented to each retailer
whenever this exemption is claimed. For purposes of this subsection, an Indian tribe
means a tribal government agency, instrumentality, or political subdivision that
performs essential government functions and does not include business entities or
agencies the primary purpose of which is to operate a business enterprise.
Gross receipts from the sale of drugs sold under a doctor's prescription.
Gross receipts from sales of adjuvants, agrichemical tank cleaners and foam markers,
commercial fertilizers, fungicides, seed treatments, inoculants and fumigants,
herbicides, and insecticides to agricultural or commercial vegetable producers and
commercial applicators; chemicals used to preserve agricultural crops being stored;
and seeds, roots, bulbs, and small plants to commercial users or consumers for
planting or transplanting for commercial vegetable gardens or agricultural purposes.
Gross receipts from sales of oxygen sold to any person who purchases it upon the
written order of a doctor for the person's own use for medical purposes.
Gross receipts from the sale of motor vehicles, farm machinery, alcoholic beverages,
gasoline, insurance premiums, gaming tickets, or any other article or product, except
as otherwise provided, upon which the state of North Dakota imposes a special tax.
Gross receipts from the sale of feed which is fed to poultry or livestock, including
breeding stock and wool-bearing stock, for the purpose of producing eggs, milk, meat,
fibers, or other products for human consumption and the gross receipts from the sale
of feed purchased for the purpose of being fed to draft or fur-bearing animals. The
word "feed" as used herein shall be construed to mean and include only salt, grains,
hays, tankage, oyster shells, mineral supplements, limestone, molasses, beet pulp,
meat and bone scraps, meal, drugs to be used as part of a feed ration, and other
generally recognized animal feeds. The term "feed" includes drugs used as part of a
feed ration, medicants, disinfectants, wormers, tonics, and like items.
Gross receipts from a sale otherwise taxable under this chapter made to a person from
an adjoining state which does not impose or levy a retail sales tax, under the following
conditions:
a. The person is in the state of North Dakota for the express purpose of making a
purchase.
b. The person furnishes to the North Dakota retailer a certificate signed by the
person in a form as the commissioner may prescribe reciting sufficient facts
establishing the exempt status of the sale. Unless the certificate is furnished it
must be presumed, until the contrary is shown, that the person was not in the
state of North Dakota for the express purpose of making a purchase.
c. The sale is fifty dollars or more.
Gross receipts from the sale of any motor vehicle taxable under the provisions of the
motor vehicle excise tax laws of North Dakota. However, gross receipts from the rental
of any motor vehicle for fewer than thirty days are not exempt but taxes imposed under
home rule authority do not apply to such rentals.
Repealed by S.L. 1969, ch. 528, § 24.
Gross receipts from sales in which a contractor furnishes to the retailer a certificate
which includes the contractor's license number assigned to the contractor under the
provisions of chapter 43-07. Such certificate shall be in the form prescribed by the
commissioner and shall be furnished by the contractor to the retailer each calendar
year prior to the making of any purchases during such calendar year from the retailer
without liability for paying the tax to the retailer. Any contractor furnishing such
Page No. 20
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
certificate must report and remit the tax to the commissioner on purchases taxable
under this chapter made by the contractor in the same manner as retailers remit such
tax under this chapter.
Gross receipts from the sale of newsprint and ink used in the publication of a
newspaper.
Gross receipts from the sale of all services furnished by any hospital, infirmary,
sanatorium, nursing home, basic care facility, or similar institution to any patient or
occupant.
Repealed by S.L. 1973, ch. 480, § 6.
Repealed by S.L. 1971, ch. 555, § 3.
Gross receipts from the sale of food supplies to any public school, to any parochial or
private nonprofit school conducting courses of study similar to those conducted by
public schools in this state, or to any nonprofit organization, for use by the public,
parochial, or private school or nonprofit organization in sponsoring or conducting a
lunch program or programs in and for any such public, parochial, or private nonprofit
school.
Gross receipts from the leasing or renting of motion picture film to motion picture
exhibitors for exhibition if the sale of tickets or admissions to the exhibition of the film is
subject to the sales tax imposed by this chapter.
Gross receipts from the leasing or renting of manufactured homes, modular living
units, or sectional homes, whether or not placed on a permanent foundation, for
residential housing for periods of thirty or more consecutive days and the gross
receipts from the leasing or renting of a hotel or motel room or tourist court
accommodations occupied by the same person or persons for residential housing for
periods of thirty or more consecutive days.
Food purchased by a student under a boarding contract with a college, university,
fraternity, or sorority.
Gross receipts from all sales when made to an eligible facility or emergency medical
services provider for the use or benefit of its patient or occupant. For the purposes of
this subsection:
a. "Eligible facility" means any hospital, skilled nursing facility, intermediate care
facility, or basic care facility licensed by the state department of health, or any
assisted living facility licensed by the department of human services; and
b. "Emergency medical services provider" means an emergency medical services
operation licensed by the state department of health under chapter 23-27.
Gross receipts from the sale of Bibles, hymnals, textbooks, and prayerbooks sold to
nonprofit religious organizations.
Gross receipts from sales of prosthetic devices, durable medical equipment,
mobility-enhancing equipment, or supplies for ostomy care or bladder dysfunction. For
purposes of this subsection:
a. "Durable medical equipment" means equipment, not including mobility-enhancing
equipment, for home use, including repair and replacement parts for such
equipment, which:
(1) Can withstand repeated use;
(2) Is primarily and customarily used to serve a medical purpose;
(3) Generally is not useful to a person in the absence of illness or injury; and
(4) Is not worn in or on the body.
"Durable medical equipment" includes equipment and devices designed or
intended for ostomy care and management and equipment and devices used
exclusively for a person with bladder dysfunction. An exemption certificate is not
required to obtain exemption. Repair and replacement parts as used in this
definition include all components or attachments used in conjunction with the
durable medical equipment. Repair and replacement parts do not include items
which are for single patient use only.
Page No. 21
b.
27.
28.
29.
30.
31.
"Mobility-enhancing equipment" means equipment, not including durable medical
equipment sold under a doctor's written prescription, including repair and
replacement parts for mobility-enhancing equipment, which:
(1) Is primarily and customarily used to provide or increase the ability to move
from one place to another and which is appropriate for use either at home or
in a motor vehicle;
(2) Is not generally used by persons with normal mobility; and
(3) Does not include any motor vehicle or equipment on a motor vehicle
normally provided by a motor vehicle manufacturer.
"Mobility-enhancing equipment" includes crutches and wheelchairs for the use of
disabled persons, equipment, including manual control units, van lifts, van door
opening units, and raised roofs for attaching to or modifying a motor vehicle for
use by a permanently physically disabled person, equipment, including elevators,
dumbwaiters, chair lifts, and bedroom or bathroom lifts, whether or not sold for
attaching to real property, for use by a permanently physically disabled person in
that person's principal dwelling, and equipment, including manual control units,
for attaching to or modifying motorized implements of husbandry for use by a
permanently physically disabled person.
c. "Prosthetic device" means a replacement, corrective, or supportive device sold
under a doctor's written prescription, including repair and replacement parts for
such a device, worn on or in the body to:
(1) Artificially replace a missing portion of the body;
(2) Prevent or correct a physical deformity or malfunction; or
(3) Support a weak or deformed portion of the body.
"Prosthetic device" includes artificial devices individually designed, constructed,
or altered solely for the use of a particular disabled person so as to become a
brace, support, supplement, correction, or substitute for the bodily structure,
including the extremities of the individual, artificial limbs, artificial eyes, hearing
aids, and other equipment worn as a correction or substitute for any functioning
portion of the body, artificial teeth sold by a dentist, and eyeglasses when
especially designed or prescribed by an ophthalmologist, physician, oculist, or
optometrist for the personal use of the owner or purchaser.
d. "Supplies for ostomy care or bladder dysfunction" includes:
(1) Supplies designed or intended for ostomy care and management, including
collection devices, colostomy irrigation equipment and supplies, skin
barriers or skin protectors, and other supplies especially designed for use of
ostomates.
(2) Supplies to be used exclusively by a person with bladder dysfunction,
including catheters, collection devices, incontinent pads and pants, and
other items used for the care and management of bladder dysfunction.
Gross receipts from the sale of electricity.
Gross receipts from the leasing or renting of any tangible personal property upon
which a North Dakota sales tax or use tax has been paid or is payable.
Gross receipts from all sales otherwise taxable under this chapter when made to any
nonprofit organization for meals, including the containers, packages, and materials
used for wrapping food items, for delivery to persons who are confined to their homes
by illness or incapacity, including senior citizens and disabled persons, for
consumption by such shut-ins in their homes.
Gross receipts from all sales of recreational travel trailers not exceeding eight feet
[2.44 meters] in width or thirty-two feet [9.75 meters] in length which are designed to
be principally used as temporary vacation dwellings when made to persons who are
residents of other states which impose excise taxes upon registration of such
recreational travel trailers.
Gross receipts from the sale of money, including all legal tender coins and currency,
and from the sale of precious metal bullion that has been refined to a purity of not less
Page No. 22
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
than nine hundred ninety-nine parts per one thousand and is in such form or condition
that its value depends upon its precious metal content and not its form.
Gross receipts from sales to nonprofit voluntary health associations which are exempt
from federal income tax under section 501(c)(3) of the United States Internal Revenue
Code [26 U.S.C. 501(c)(3)]. As used in this subsection, a voluntary health association
is an organization recognized by the internal revenue service, the national health
council, the state tax commissioner, and the North Dakota secretary of state as a
nonprofit organization that is exempt under section 501(c)(3) of the United States
Internal Revenue Code and meets the following requirements: It has been organized
and operated exclusively in providing services for the purposes of preventing and
alleviating human illness and injury. Methods used to obtain these goals would include
education, research, community service, and direct patient services, income being
derived solely from private donations with some exceptions of a minimal membership
fee. Its members are not limited to only individuals, who themselves are licensed or
otherwise legally authorized to render the same professional services as the
organization. The disbursement of funds within a volunteer health association is to be
controlled by a board of directors who work voluntarily and without pay.
Repealed by S.L. 2005, ch. 580, § 19.
Gross receipts from the sale of byproducts, arising from the processing of agricultural
products, for use in the manufacture or generation of steam or electricity.
Gross receipts from the sale of a manufactured home that has been sold, bargained,
exchanged, given away, or transferred by the person who first acquired it from a
retailer in a sale at retail and upon which the North Dakota sales tax has previously
been imposed.
Gross receipts from all sales of insulin in all its forms dispensed pursuant to the
direction of a licensed physician, all sales of glucose usable for treatment of insulin
reactions, all sales of urine and blood testing kits and materials, and all sales of insulin
measuring and injecting devices, including insulin syringes and hypodermic needles.
Gross receipts from the sale of any aircraft taxable under the provisions of chapter
57-40.5.
Gross receipts from all sales of air carrier transportation property subject to ad valorem
property taxation pursuant to the provisions of chapters 57-06, 57-07, 57-08, 57-13,
and 57-32.
Gross receipts from sales of tangible personal property consisting of flight simulators
or mechanical or electronic equipment for use in association with a flight simulator.
Gross receipts from sales of tickets or admissions to, or sales made at, an annual
church supper or bazaar held in a publicly owned facility. For purposes of this
subsection, "annual" means occurring not more than once in any calendar year.
Gross receipts from the initial sale of beneficiated coal taxed under chapter 57-60.
Gross receipts from electronic gaming devices licensed by the attorney general under
chapter 53-06.1.
Gross receipts from all sales made to a nonprofit medical research institute. For
purposes of this subsection, "nonprofit medical research institute" means an institute
that is a member of the association of independent research institutes, which is not a
private foundation, and which is recognized by the internal revenue service as having
exempt status under 26 U.S.C. 501(c)(3).
Gross receipts from all sales of coal that is exempt from the coal severance tax.
Gross receipts from the sale or lease of farm machinery, farm machinery repair parts,
irrigation equipment, or irrigation equipment repair parts used exclusively for
agricultural purposes.
Gross receipts from sales of tangible personal property purchased by a charitable
organization to be awarded as a prize in a raffle conducted in accordance with law if
the winner of the tangible personal property will be subject to sales or use taxes upon
receiving the property.
Gross receipts from the sale of lottery tickets under chapter 53-12.1.
Page No. 23
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
58.
Gross receipts from all sales of tangible personal property purchased by a commerce
authority and made a part of the infrastructure of a commerce authority, otherwise
taxable under this chapter, if the personal property is placed within the geographic
boundaries of the political subdivisions that created the commerce authority and is
necessary and directly services infrastructure needs of the commerce authority. The
commissioner shall issue a certificate of exemption to a political subdivision exempted
by this subsection, and the political subdivision shall present the certificate of
exemption to each retailer whenever the exemption is claimed.
Gross receipts from sales of carbon dioxide used for enhanced recovery of oil or
natural gas.
Gross receipts from the sale at retail of hydrogen to power an internal combustion
engine or fuel cell and equipment used directly and exclusively in production and
storage of the hydrogen by a hydrogen generation facility in this state. For purposes of
this subsection, "storage" means stationary and portable hydrogen containers or
pressure vessels, piping, tubing, fittings, gaskets, controls, valves, gauges, pressure
regulators, safety relief devices, and other accessories intended for hydrogen storage
containers or pressure vessels.
Gross receipts from the sale of equipment to a facility, licensed under section
57-43.2-05, to enable the facility to sell diesel fuel containing at least two percent
biodiesel or green diesel fuel as defined under section 57-43.2-01 by volume.
Gross receipts from sales within the boundaries of any reservation in this state to an
individual who resides within the boundaries of any reservation in this state and who is
an enrolled member of a federally recognized Indian tribe.
Gross receipts from sales of natural gas or sales of fuels used for heating purposes.
Gross receipts from the sale of items delivered electronically, including specified digital
products. For purposes of this subsection:
a. "Specified digital products" means:
(1) "Digital audio-visual works" which means a series of related images which,
when shown in succession, impart an impression of motion, together with
accompanying sounds, if any;
(2) "Digital audio works" which means works that result from the fixation of a
series of musical, spoken, or other sounds, including ringtones; and
(3) "Digital books" which means works that are generally recognized in the
ordinary and usual sense as books.
b. For purposes of the definition of "specified digital products", "transferred
electronically" means obtained by the purchaser by means other than tangible
storage media.
c. For purposes of the definition of "digital audio work", "ringtones" means digitized
sound files that are downloaded onto a device and which may be used to alert the
customer with respect to a communication.
d. "Specified digital products" may not be construed to include prewritten computer
software as that term is defined in subdivision g of subsection 1 of section
57-39.2-02.1.
Gross receipts from memberships, admissions, and entrance fees to activities and
events organized and operated by nonprofit social and recreation clubs organized
under section 501(c)(7) of the Internal Revenue Code [26 U.S.C. 501(c)(7)] and
operated solely by nonsalaried officers and staff.
Gross receipts from the sale of any potash or byproducts taxable under chapter 57-65.
Gross receipts from coin-operated amusement or entertainment machines.
(Contingent effective date - See note) Gross receipts from sales of liquefied natural
gas used for agricultural, industrial, or railroad purposes as defined in section
57-43.2-01.
57-39.2-04.1. Sales tax exemption for food and food ingredients.
Gross receipts from sales for human consumption of food and food ingredients are exempt
from taxes imposed under this chapter. Gross receipts from sales for human consumption of
Page No. 24
food and food products given, or to be given, as samples to consumers for consumption on the
premises of a food store are exempt from the sales tax imposed by this chapter. For purposes of
this section, "food and food ingredients" means substances, whether in liquid, concentrated,
solid, frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and
are consumed for taste or nutritional value.
1. For purposes of this section, "food" and "food ingredients" do not include:
a. Alcoholic beverages.
b. Candy or chewing gum.
c. Dietary supplements.
d. Prepared food.
e. Soft drinks containing fifty percent or less fruit juice.
f. Tobacco.
2. For purposes of this section:
a. "Alcoholic beverages" means beverages that are suitable for human consumption
and contain one-half of one percent or more of alcohol by volume.
b. "Candy" means a preparation of sugar, honey, or other natural or artificial
sweeteners in combination with chocolate, fruits, nuts, or other ingredients or
flavoring in the form of bars, drops, or pieces. Candy does not include any
preparation containing flour and does not require refrigeration.
c. "Dietary supplement" means any product, other than tobacco, intended to
supplement the diet which contains one or more of the following dietary
ingredients: a vitamin; a mineral; an herb or other botanical; an amino acid; a
dietary substance for use by humans to supplement the diet by increasing the
total dietary intake; an oral concentrate, metabolite, constitute, extract, or
combination of any dietary ingredients described in this sentence and which is
intended for ingestion in tablet, capsule, powder, soft gel, gel cap, or liquid form,
or if not represented for use as a sole item of a meal or of a diet; and is required
to be labeled as a dietary supplement, identifiable by the supplemental facts box
found on the label and as required pursuant to 21 CFR section 101.36.
d. "Prepared food" means:
(1) Food sold in a heated state or heated by the seller;
(2) Two or more food ingredients mixed or combined by the seller for sale as a
single item; or
(3) Food sold with eating utensils provided by the seller, including plates,
knives, forks, spoons, glasses, cups, napkins, or straws. A plate does not
include a container or packaging used to transport the food.
e. "Prepared food" does not mean:
(1) Food that is only cut, repackaged, or pasteurized by the seller.
(2) Eggs, fish, meat, poultry, and foods containing these raw animal foods
requiring cooking by the consumer as recommended by the food and drug
administration in chapter 3, part 401.11, of its food code so as to prevent
foodborne illness.
(3) If sold without eating utensils provided by the seller:
(a) Food sold by a seller whose proper primary North American industry
classification system classification is manufacturing in sector 311,
except subsector 3118, bakeries.
(b) Food sold in an unheated state by weight or volume as a single item.
(c) Bakery items, including bread, rolls, buns, biscuits, bagels, croissants,
pastries, donuts, Danish, cakes, tortes, pies, tarts, muffins, bars,
cookies, and tortillas.
f. "Soft drinks" means nonalcoholic beverages that contain natural or artificial
sweeteners. "Soft drinks" does not include beverages that contain milk or milk
products, soy, rice, or similar milk substitutes, or greater than fifty percent of
vegetable or fruit juice by volume.
g. "Tobacco" means cigarettes, cigars, chewing or pipe tobacco, or any other item
that contains tobacco.
Page No. 25
3.
For purposes of this section, "eating utensils provided by the seller" is determined as
follows:
a. Determine the prepared food ratio, where the numerator is the sum of food
defined in paragraphs 1 and 2 of subdivision d of subsection 2 plus food when
plates, bowls, glasses, or cups are necessary for the purchaser to receive the
food and the denominator is all sales of food and food ingredients, including
prepared food, candy, dietary supplements, and soft drinks. Alcoholic beverages
are not included in either the numerator or denominator.
b. If the prepared food ratio is seventy-five percent or less, utensils are provided by
the seller if the seller's practice is to physically give or hand them to the
purchaser, except plates, bowls, glasses, or cups necessary for the purchaser to
receive the food need only be made available.
c. If the prepared food ratio is greater than seventy-five percent, utensils are
provided by the seller if they are made available to the purchaser. When sellers
with a food ratio greater than seventy-five percent sell items that contain four or
more servings packaged as one item and sold for a single price, the item does
not become prepared food unless the seller's practice is to physically give or
hand the purchaser utensils as in subdivision b. Serving size is determined by the
label of the item sold. If no label is available, the seller will reasonably determine
the number of servings.
d. When a seller sells food items that have a utensil placed in a package by a
person other than the seller and that person's North American industry
classification system classification code is that of manufacturers (sector 311), the
seller shall not be considered to have provided the utensils except as in
subdivisions b and c. For any other packager with any other North American
industry classification system classification code, the seller shall be considered to
have provided the utensil.
e. The prepared food ratio is to be calculated by the seller for each calendar or fiscal
year not later than ninety days after the end of each year and based on the
seller's data from the previous year.
f. A single prepared food ratio will be determined annually and used for all of the
seller's locations in the state.
g. A new business shall make a good-faith estimate of the prepared food ratio for
the first year and shall adjust its good-faith estimate after the first three months if
the actual prepared food ratio is materially different than the estimate.
57-39.2-04.2. (Effective through June 30, 2017) Sales tax exemption for power plant
construction, production, environmental upgrade, and repowering equipment and oil
refinery or gas processing plant environmental upgrade equipment.
1. As used in this section, unless the context otherwise requires:
a. (1) "Environmental upgrade" means an investment greater than twenty-five
million dollars or one hundred thousand dollars per megawatt of installed
nameplate capacity, whichever is less, in machinery, equipment, and related
facilities for reducing emissions or increasing efficiency at an existing power
plant.
(2) "Environmental upgrade" for purposes of a process unit means an
investment greater than one hundred thousand dollars in machinery,
equipment, and related facilities for reducing emissions, increasing
efficiency, or enhancing reliability of the equipment at a new or existing
process unit.
b. "Operator" means any person owning, holding, or leasing a power plant or
process unit.
c. "Power plant" means:
(1) An electrical generating plant, and all additions to the plant, which
processes or converts coal in its natural form or beneficiated coal into
Page No. 26
electrical power and which has at least one single electrical energy
generation unit with a capacity of fifty thousand kilowatts or more.
(2) A wind-powered electrical generating facility, on which construction is
completed before January 1, 2017, and all additions to the facility, which
provides electrical power through wind generation and which has at least
one single electrical energy generation unit with a nameplate capacity of
one hundred kilowatts or more.
(3) Any other type of electrical power generating facility excluding the types of
power plants identified in paragraphs 1 and 2 which has a capacity of one
hundred kilowatts or more and produces electricity for resale or for
consumption in a business activity.
d. "Process unit" means an oil refinery or gas processing plant and all adjacent units
that are utilized in the processing of crude oil or natural gas.
e. "Production equipment" means machinery and attachment units, other than
replacement parts, directly and exclusively used in the generation, transmission,
or distribution of electrical energy for sale by a power plant.
f. "Repowering" means an investment of more than two hundred million dollars or
one million dollars per megawatt of installed nameplate capacity, whichever is
less, in an existing power plant that modifies or replaces the process used for
converting coal in its natural form or beneficiated coal into electrical power.
2. Sales of production or environmental upgrade equipment that is delivered on or after
January 1, 2007, and used exclusively in power plants or repowering existing power
plants or in processing units are exempt from the tax imposed by this chapter.
3. Sales of tangible personal property, other than production or environmental upgrade
equipment, which is used in the construction of new power plants or to expand existing
power plants or to add environmental upgrades to existing power plants or repowering
existing power plants or to add environmental upgrades to existing process units are
exempt from the tax imposed by this chapter.
4. To receive the exemption at the time of purchase, the operator must receive from the
commissioner a certificate that the tangible personal property or production equipment
the operator intends to purchase qualifies for the exemption. If a certificate is not
received prior to the purchase, the operator shall pay the applicable tax imposed by
this chapter and apply to the commissioner for a refund.
5. If the tangible personal property or production equipment is purchased or installed by a
contractor subject to the tax imposed by this chapter, the operator may apply for a
refund of the difference between the amount remitted by the contractor and the
exemption imposed or allowed by this section.
(Effective after June 30, 2017) Sales tax exemption for power plant construction,
production, environmental upgrade, and repowering equipment and oil refinery or gas
processing plant environmental upgrade equipment.
1. As used in this section, unless the context otherwise requires:
a. (1) "Environmental upgrade" means an investment greater than twenty-five
million dollars or one hundred thousand dollars per megawatt of installed
nameplate capacity, whichever is less, in machinery, equipment, and related
facilities for reducing emissions or increasing efficiency at an existing power
plant.
(2) "Environmental upgrade" for purposes of a process unit means an
investment greater than one hundred thousand dollars in machinery,
equipment, and related facilities for reducing emissions, increasing
efficiency, or enhancing reliability of the equipment at a new or existing
process unit.
b. "Operator" means any person owning, holding, or leasing a power plant or
process unit.
c. "Power plant" means:
(1) An electrical generating plant, and all additions to the plant, which
processes or converts coal from its natural form into electrical power and
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2.
3.
4.
5.
which has at least one single electrical energy generation unit with a
capacity of fifty thousand kilowatts or more.
(2) A wind-powered electrical generating facility, on which construction is
completed before January 1, 2017, and all additions to the facility, which
provides electrical power through wind generation and which has at least
one single electrical energy generation unit with a nameplate capacity of
one hundred kilowatts or more.
(3) Any other type of electrical power generating facility excluding the types of
power plants identified in paragraphs 1 and 2 which has a capacity of one
hundred kilowatts or more and produces electricity for resale or for
consumption in a business activity.
d. "Process unit" means an oil refinery or gas processing plant and all adjacent units
that are utilized in the processing of crude oil or natural gas.
e. "Production equipment" means machinery and attachment units, other than
replacement parts, directly and exclusively used in the generation, transmission,
or distribution of electrical energy for sale by a power plant.
f. "Repowering" means an investment of more than two hundred million dollars or
one million dollars per megawatt of installed nameplate capacity, whichever is
less, in an existing power plant that modifies or replaces the process used for
converting coal from its natural form into electrical power.
Sales of production or environmental upgrade equipment that is delivered on or after
January 1, 2007, and used exclusively in power plants or repowering existing power
plants or in processing units are exempt from the tax imposed by this chapter.
Sales of tangible personal property, other than production or environmental upgrade
equipment, which is used in the construction of new power plants or to expand existing
power plants or to add environmental upgrades to existing power plants or repowering
existing power plants or to add environmental upgrades to existing process units are
exempt from the tax imposed by this chapter.
To receive the exemption at the time of purchase, the operator must receive from the
commissioner a certificate that the tangible personal property or production equipment
the operator intends to purchase qualifies for the exemption. If a certificate is not
received prior to the purchase, the operator shall pay the applicable tax imposed by
this chapter and apply to the commissioner for a refund.
If the tangible personal property or production equipment is purchased or installed by a
contractor subject to the tax imposed by this chapter, the operator may apply for a
refund of the difference between the amount remitted by the contractor and the
exemption imposed or allowed by this section.
57-39.2-04.3. Sales tax exemption for manufacturing or recycling machinery and
equipment and primary sector business computer and telecommunications equipment.
1. Gross receipts from sales of machinery or equipment used directly in manufacturing of
tangible personal property for wholesale, retail, or lease are exempt from taxes under
this chapter. To be exempt, the machinery or equipment must be used in a new
manufacturing plant or in a physical or economic expansion of an existing
manufacturing plant. Purchase of replacement machinery or equipment is not exempt
unless it results in a physical or economic expansion of the plant.
2. Gross receipts from sales of machinery or equipment used directly in recycling of
tangible personal property are exempt from taxes under this chapter. To be exempt,
the machinery or equipment must be used in a new recycling facility or in physical or
economic expansion of an existing recycling facility. Purchase of replacement
machinery or equipment is not exempt unless it results in a physical or economic
expansion of the facility.
3. Gross receipts from sales of computer and telecommunications equipment that is an
integral part of a new primary sector business or a physical or economic expansion of
a primary sector business are exempt from taxes under this chapter. Purchase of
replacement equipment is not exempt under this subsection.
Page No. 28
4.
5.
6.
To qualify for exemption at the time of purchase, the manufacturer, recycler, or primary
sector business must receive from the commissioner a certificate stating that the
machinery or equipment qualifies for the exemption. If a certificate is not received
before the purchase, the manufacturer, recycler, or primary sector business must pay
the tax and apply to the commissioner for a refund.
If the machinery or equipment is purchased or installed by a contractor subject to tax
under this chapter, the manufacturer, recycler, or primary sector business must apply
for a refund of the amount remitted by the contractor.
For purposes of this section, the following definitions apply:
a. "Economic expansion" means an increase in production volume, employment, or
the types of products that can be manufactured or recycled.
b. "Equipment":
(1) For purposes of a manufacturer or recycler, means any tangible personal
property other than machinery used directly in the manufacturing or
recycling process; and
(2) For purposes of a primary sector business other than manufacturing or
recycling, means telecommunications equipment and computer equipment,
printers, and software that are an integral part of the operations of the
primary sector business.
c. "Machinery" means mechanical devices purchased or constructed by the
manufacturer or recycler, or its agent, and used directly in manufacturing or
recycling operations at any time from the initial stage where the raw material is
first received at the plant site through the completion of the product, including
packaging and all processes prior to transportation of the product from the site.
The term includes electrical, mechanical, and electronic components that are part
of machinery and necessary for a machine to produce its effect or result and
environmental control equipment required to maintain certain levels of humidity or
temperature in a special and limited area of the manufacturing facility where the
regulation is essential for production to occur. The term includes computer
equipment that controls or monitors the functions of machinery used directly in
the manufacturing operations.
d. "Machinery" and "equipment":
(1) For purposes of a manufacturer or recycler, do not include handtools,
buildings, or transportation equipment not used directly in manufacturing or
recycling; machines and equipment used primarily in administrative,
accounting, sales, or other nonmanufacturing segments of the business; any
property that becomes a part of the manufactured or recycled product; or
any other equipment or machinery not used directly in manufacturing or
recycling; and
(2) For purposes of a primary sector business other than manufacturing or
recycling, do not include equipment that is not an integral part of the
operations of the primary sector business.
e. "Manufacturing", in addition to the meaning ordinarily ascribed to it, means the
processing of agricultural products, including registered and certified seed, but
does not include mining, refining, extracting oil and gas, or the generation of
electricity.
f. "Primarily" means more than fifty percent of the time the machinery or equipment
is used.
g. "Primary sector business" means an individual, corporation, limited liability
company, partnership, or association that through the employment of knowledge
or labor adds value to a product, process, or service which results in the creation
of new wealth and which has been certified by the department of commerce
division of economic development and finance to be qualified under this
subdivision.
h. "Recycling" means collecting or recovering material that would otherwise be solid
waste and performing all or part of the process in which the material becomes a
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i.
raw material for manufacturing or becomes a product for sale at retail or
wholesale.
"Used directly" with respect to manufacturing means used primarily in the actual
production, processing, fabrication, or assembly of raw materials, or partially
finished materials, into the form in which the product is finalized, packaged, and
ready for market. The term also means:
(1) To effect a direct physical change upon the tangible personal property.
(2) To guide or measure a direct physical change upon the property when the
function is an integral and essential part of tuning, verifying, or aligning the
component parts of the tangible personal property.
(3) To test or measure the property on the production line or at a site in the
location of production.
(4) To transport, convey, or handle the tangible personal property during the
manufacturing.
(5) To package the product for sale and shipment.
(6) To conduct research and development and design activities related to the
manufacturing process of the plant.
"Used directly" with respect to recycling means used solely in processing,
compacting, altering, transporting, or otherwise affecting material as a part of the
recycling process.
57-39.2-04.4. Sales tax exemption for materials used to construct agricultural
commodity processing facility.
1. Gross receipts from sales of tangible personal property used to construct an
agricultural commodity processing facility in this state are exempt from taxes under
this chapter. To be exempt, the tangible personal property must be incorporated in the
structure of the facility or used in the construction process to the point of having no
residual economic value.
2. To receive the exemption at the time of purchase, the owner of the facility must receive
from the commissioner a certificate that the tangible personal property used to
construct an agricultural commodity processing facility which the owner intends to
purchase qualifies for the exemption. If a certificate is not received prior to the
purchase, the owner shall pay the applicable tax imposed by this chapter and apply to
the commissioner for a refund.
3. If the tangible personal property is purchased or installed by a contractor subject to the
tax imposed by this chapter, the owner may apply for a refund of the difference
between the amount remitted by the contractor and the exemption imposed or allowed
by this section.
4. For purposes of this section, the following definitions apply:
a. "Agricultural commodity processing facility" means buildings, structures, fixtures,
and improvements used or operated primarily for the processing or production of
marketable products from agricultural commodities. The term does not include a
facility that provides only storage, cleaning, drying, or transportation of
agricultural commodities.
b. "Facility" means each part of the facility which is used in a process primarily for
the processing of agricultural commodities, including receiving or storing
agricultural commodities; transporting the agricultural commodities or product
before, during, or after the processing; or packaging or otherwise preparing the
product for sale or shipment.
c. "Tangible personal property" does not include tools or machinery used to
construct an agricultural commodity processing facility and does not include
machinery or equipment exempted under section 57-39.2-04.3.
Page No. 30
57-39.2-04.5. Sales and use tax exemption for materials used in compressing,
processing, gathering, collecting, or refining of gas.
1. Gross receipts from sales of tangible personal property used to construct or expand a
system used to compress, process, gather, collect, or refine gas recovered from an oil
or gas well in this state or used to expand or build a gas processing facility in this state
are exempt from taxes under this chapter. To be exempt, the tangible personal
property must be incorporated into a system used to compress, process, gather,
collect, or refine gas. Tangible personal property used to replace an existing system to
compress, process, gather, collect, or refine gas does not qualify for exemption under
this section unless the replacement creates an expansion of the system.
2. To receive the exemption under this section at the time of purchase, the owner of the
gas compressing, processing, gathering, collecting, or refining system must receive
from the tax commissioner a certificate that the tangible personal property used to
construct or expand a system used to compress, process, gather, collect, or refine gas
recovered from an oil or gas well in this state or used to expand or build a gas
processing facility in this state which the owner intends to purchase qualifies for
exemption. If a certificate is not received before the purchase, the owner shall pay the
applicable tax imposed by this chapter and apply to the tax commissioner for a refund.
3. If the tangible personal property is purchased or installed by a contractor subject to the
tax imposed by this chapter, the owner of the gas compressing, processing, gathering,
collecting, or refining system may apply to the tax commissioner for a refund of the
difference between the amount remitted by the contractor and the exemption imposed
or allowed by this section. Application for a refund must be made at the times and in
the manner directed by the tax commissioner and must include sufficient information to
permit the tax commissioner to verify the sales and use taxes paid and the exempt
status of the sale or use.
4. For purposes of this section, a gas collecting system means a collection system
described in subdivision d of subsection 2 of section 38-08-06.4.
57-39.2-04.6. Sales and use tax exemption for materials used in construction or
expansion of an oil refinery.
1. Gross receipts from sales of tangible personal property used in expanding or
constructing an oil refinery that has a nameplate capacity of processing at least five
thousand barrels of oil per day in this state are exempt from taxes under this chapter.
2. To receive the exemption at the time of purchase, the owner of the oil refinery must
receive from the tax commissioner a certificate that the tangible personal property
used to construct or expand an oil refinery qualifying under this section which the
owner intends to purchase qualifies for the exemption. If a certificate is not received
before the purchase, the owner shall pay the applicable tax imposed by this chapter
and apply to the tax commissioner for a refund.
3. If the tangible personal property is purchased or installed by a contractor subject to the
tax imposed by this chapter, the owner of the oil refinery may apply for a refund of the
difference between the amount remitted by the contractor and the exemption imposed
or allowed under this section. Application for a refund must be made at the times and
in the manner directed by the tax commissioner and must include sufficient information
to permit the tax commissioner to verify the sales and use taxes paid and the exempt
status of the sale or use.
4. This chapter and chapter 57-40.2 apply to the exemption under this section.
57-39.2-04.7. Sales tax exemption for equipment used in telecommunications
infrastructure development.
Expired under S.L. 2011, ch. 470, § 1.
Page No. 31
57-39.2-04.8. Sales tax exemption for machinery or equipment used to produce coal
from a new mine.
1. Gross receipts from sales of machinery or equipment used to produce coal from a new
mine located in this state are exempt from the tax imposed by this chapter. The
exemption for each new mine under this section is limited to the first five million dollars
of sales and use tax paid.
2. Purchase of replacement machinery or equipment is exempt if the capitalized
investment in the new mine exceeds twenty million dollars using the United States
generally accepted accounting principles. Purchases of repair or replacement parts for
existing machinery or equipment are not exempt under this section.
3. The mine operator shall apply to the commissioner for a refund of sales and use taxes
paid for which the exemption is claimed under this section. A refund claim may not
exceed the limitation in subsection 1. Application for the refund must be made at the
time and in the manner directed by the commissioner and must include sufficient
information to verify the correctness of the refund claim.
4. For purposes of this section:
a. "Machinery or equipment" means machinery or equipment used directly to
uncover, sever, crush, handle, or transport coal removed from the earth.
"Machinery or equipment" includes draglines, excavators, rolling stock, conveyor
equipment, reclamation equipment, and equipment to pulverize coal but does not
include rail spurs, office buildings, workshops, or any component not used directly
to uncover, sever, crush, handle, or transport coal removed from the earth.
b. "New mine" means an area permitted under chapter 38-14.1 by the public service
commission after December 31, 2010.
c. "Produce coal" means mining operations to uncover, sever, crush, handle, or
transport coal from its natural location under the earth's surface to the mouth of
the mine and all activities necessary and incidental to the reclamation of that
location.
57-39.2-04.9. (Effective through June 30, 2017) Sales tax exemption for equipment
used in telecommunications infrastructure development.
1. Gross receipts from sales of tangible personal property used to construct or expand
telecommunications service infrastructure that is capable of providing
telecommunications service in this state are exempt from taxes under this chapter. To
be exempt, the tangible personal property must be incorporated into
telecommunications infrastructure owned by a telecommunications company.
2. To receive the exemption at the time of purchase, the purchaser must receive from the
tax commissioner a certificate stating that the tangible personal property qualifies for
the exemption. If a certificate is not received before the purchase, then the
telecommunications company shall pay the applicable tax imposed and apply to the
tax commissioner for a refund of sales and use taxes paid for which the exemption is
claimed under this section. If the tangible personal property is purchased or installed
by a contractor subject to the tax imposed by this chapter, the telecommunications
company may apply for a refund of the difference between the amount remitted by the
contractor and the exemption imposed or allowed under this section. Application for a
refund must be made at the times and in the manner directed by the tax commissioner
and must include sufficient information to permit the tax commissioner to verify the
sales and use taxes paid and the exempt status of the sale or use.
57-39.2-04.10. Sales tax exemption for materials used to construct a processing
facility to produce liquefied natural gas.
1. Gross receipts from sales of tangible personal property used to construct or expand a
processing facility in this state to produce liquefied natural gas are exempt from taxes
under this chapter. To be exempt, the tangible personal property must be incorporated
in the structure of the facility or used in the construction process to the point of having
no residual economic value.
Page No. 32
2.
3.
To receive the exemption at the time of purchase, the owner of the processing facility
must receive from the commissioner a certificate that the tangible personal property
used to construct the processing facility which the owner intends to purchase qualifies
for the exemption. If a certificate is not received prior to the purchase, the owner shall
pay the applicable tax imposed by this chapter and apply to the commissioner for a
refund.
If the tangible personal property is purchased or installed by a contractor subject to the
tax imposed by this chapter, the owner may apply for a refund of the difference
between the amount remitted by the contractor and the exemption imposed or allowed
by this section.
57-39.2-04.11. Sales tax exemption for materials used to construct a facility for coal
gasification byproducts.
1. Gross receipts from sales of tangible personal property used to construct or expand a
facility in this state to extract or process byproducts associated with coal gasification
are exempt from taxes under this chapter. To be exempt, the tangible personal
property must be incorporated in the structure of the facility or used in the construction
process to the point of having no residual economic value.
2. To receive the exemption at the time of purchase, the owner of the facility must receive
from the commissioner a certificate that the tangible personal property used to
construct the processing facility which the owner intends to purchase qualifies for the
exemption. If a certificate is not received prior to the purchase, the owner shall pay the
applicable tax imposed by this chapter and apply to the commissioner for a refund.
3. If the tangible personal property is purchased or installed by a contractor subject to the
tax imposed by this chapter, the owner may apply for a refund of the difference
between the amount remitted by the contractor and the exemption imposed or allowed
by this section.
4. For purposes of this section, "coal gasification" and "byproducts" have the same
meaning as defined in chapter 57-60.
57-39.2-04.12. (Effective through December 31, 2013) Sales tax rebate for certain
purchases of replacement property for property damaged or destroyed by 2011 flooding.
1. For purposes of this section:
a. "Claimant" means an individual whose primary residence is in an identified flood
zone and who has been approved to receive disaster assistance through the
federal emergency management agency due to 2011 river flooding within a
disaster or emergency area as declared by the governor in 2011, including
ground water incursion resulting from an abnormally high water table in an area
threatened by river flooding disaster in this state.
b. "Major appliance" means any heating, ventilation, or cooling equipment and any
water heater, dishwasher, washer, dryer, refrigerator, freezer, stove, range, oven,
cooktop, microwave, vacuum, or fan that is purchased for use in the claimant's
primary residence to replace an appliance that was damaged or destroyed due to
a 2011 flood disaster in a disaster or emergency area as declared by the
governor; provided, that the rebate under this section applies only against the tax
under this chapter on the first three thousand two hundred dollars of the purchase
price of a major appliance.
c. "Residential building supplies" means any of the following items if used in the
claimant's primary residence and determined by the tax commissioner to be
reasonably related to purposes of restoration, repair, replacement, or rebuilding
due to a 2011 flood disaster in this state; provided that the rebate under this
section applies only against the tax under this chapter on the first five hundred
dollars of the purchase price of a residential building supply item:
(1) Cleaning and disinfecting materials as determined by the tax commissioner;
(2) Trash bags, boxes, construction tools, and hardware, as determined by the
tax commissioner; and
Page No. 33
(3)
2.
3.
4.
Roofing shingles, roofing paper, gutters, downspouts, vents, doors,
windows, sheetrock, drywall, insulation, paint and paint materials, flooring,
and other necessary building materials, as determined by the tax
commissioner.
d. "Residential furniture" means furniture commonly used in a residential dwelling,
as determined by the tax commissioner, which is used in the claimant's primary
residence to replace furniture that was damaged or destroyed due to a 2011 flood
disaster in this state; provided, that the rebate under this section applies only
against the tax under this chapter on the first three thousand two hundred dollars
of the purchase price of the residential furniture item.
a. This section applies to the claimant's qualifying purchases that occur between
June 10, 2011, and December 31, 2013.
b. The total amount refunded under this section in connection with any one
residence may not exceed two thousand five hundred dollars.
To claim a refund under this section, a claimant shall file a single application with the
tax commissioner on or before December 31, 2013, in a format prescribed by the tax
commissioner which must include the aggregate amount requested by the claimant in
connection with all eligible purchases under this section. Only one application per
residence is allowed. The tax commissioner shall make an approved refund directly to
the claimant. An application for refund must include satisfactory proof of receipt of
federal disaster assistance, eligible purchases, and taxes under this chapter paid on
such purchases and any other information or documentation that the commissioner
may require, including store receipts and copies of payment documents such as
checks, credit card receipts, or a sworn statement under penalty of perjury to support
any purchases made using cash. If purchases were made by a contractor, the claimant
must provide with the application a copy of an invoice or receipt from the contractor
which separately itemizes the price of each item, sales taxes paid on that purchase
and included in the claimant's billing, and labor charges. The commissioner shall
develop guidelines concerning the administration of this section which must be posted
on the website of the tax department. The commissioner is granted broad discretion to
administer the refund process in a manner that the commissioner determines
necessary to quickly, efficiently, and accurately carry out the purposes of this section.
The commissioner may assess a civil penalty not to exceed twenty-five thousand
dollars against any claimant that knowingly files a false or fraudulent application for
refund under this section.
57-39.2-05. Credit or refund for taxes paid on worthless accounts and repossessions.
1. Taxes paid on gross receipts represented by accounts found to be worthless and
actually charged off for income tax purposes may be credited upon subsequent
payment of the tax herein provided; provided, that if such accounts are hereafter
collected by the retailer, a tax must be paid upon the amount so collected. If a retailer's
filing responsibility has been assumed by a certified service provider, the certified
provider may claim on behalf of the retailer any bad debt allowance provided under
this section. The certified service provider shall credit or refund to the retailer the full
amount of any bad debt allowance or refund received under this section.
2. If a retailer has remitted the sales tax due on the full amount of an installment sales
contract rather than on only the installment payments received, the retailer may deduct
as a credit against the retailer's sales tax liability on the next return that the retailer is
required to file the amount of sales tax the retailer paid on the installment contract
payments which were not made by the purchaser of the merchandise sold under such
contract; such credit may be deducted by the retailer regardless of whether or not said
retailer has assigned the contract, provided, however, that if the retailer has assigned
the contract the retailer must have assigned it subject to an agreement to repurchase
the contract in the event of default by the purchaser under the contract or subject to a
guarantee that the payments under the contract would be made. In the event such
deduction exceeds the amount of sales tax due the state by the retailer in the next
Page No. 34
regular return, such excess must be allowed as credit against future sales tax due
from the retailer. If in any case the credit, or any part of it, cannot be utilized by the
retailer because of a discontinuance of a business or for other valid reasons, the
amount thereof may be refunded to the retailer.
57-39.2-06. Credit to relief agency and local governmental units.
A relief agency may apply to the commissioner for refund of the amount of tax imposed
under this chapter and paid upon sales to it of any goods, wares, or merchandise used for free
distribution to the poor and needy. Such refunds may be obtained only in the following amount
and in the manner and only under all of the following conditions:
1. On forms furnished by the commissioner, and during the time herein provided for the
filing of quarterly tax returns by retailers, the relief agency shall report to the
commissioner the total amount or amounts, valued in money, expended directly or
indirectly for goods, wares, or merchandise used for free distribution to the poor and
needy.
2. On these forms the relief agency shall separately list the persons making the sales to it
or to its order, together with the dates of the sales, and the total amount so expended
by the relief agency.
3. The relief agency must prove to the satisfaction of the commissioner that the person
making the sales has included the amount thereof in the computation of the gross
receipts of such person and that such person has paid the tax levied by this chapter,
based upon such computation of gross receipts.
If the commissioner is satisfied that the foregoing conditions and requirements have been
complied with, the commissioner shall refund the amount claimed by the relief agency.
57-39.2-07. Sales tax to be added to purchase price and be a debt.
Repealed by I.M. approved November 2, 1976, S.L. 1977, ch. 593, § 6.
57-39.2-08. Separate and additional tax on retail sales to be added to purchase price
and be a debt.
Repealed by I.M. approved November 2, 1976, S.L. 1977, ch. 593, § 6.
57-39.2-08.1. Separate and additional tax on retail sales to be added to purchase price
and be a debt.
Repealed by I.M. approved November 2, 1976, S.L. 1977, ch. 593, § 6.
57-39.2-08.2. Sales tax to be added to purchase price and be a debt.
1. Except as otherwise provided in subsection 2, retailers shall add the tax imposed
under this chapter, or the average equivalent thereof, to the sales price or charge, and
when added, such tax constitutes a part of such price or charge, is a debt from the
consumer or user to the retailer until paid, and is recoverable at law in the same
manner as other debts.
A retailer shall determine the amount of tax charged to and received from each
purchaser by use of a formula that applies the applicable tax rate to each taxable item
or total purchase and the product must be carried to the third decimal place. Amounts
of tax less than one-half of one cent must be disregarded and amounts of tax of
one-half of one cent or more must be considered an additional cent of tax. When a
local sales tax applies, the determination of tax charged to and received from each
customer will be applied to the aggregated state and local taxes.
2. On retail sales of manufactured homes used for residential or business purposes,
except as provided in subsection 35 of section 57-39.2-04, retailers shall add the tax
imposed under this chapter, or the average equivalent thereof, to the sales price or
charge, and when added, such tax constitutes a part of such price or charge, is a debt
from the consumer or user to the retailer until paid, and is recoverable at law in the
Page No. 35
same manner as other debts. In adding such tax to the price or charge, retailers shall
add to it three percent of such price or charge.
57-39.2-08.3. Sales tax on alcoholic beverages may be included in purchase price.
Expired under S.L. 2003, ch. 539, § 25; S.L. 2005, ch. 582, § 2.
57-39.2-09. Unlawful act.
No retailer may advertise or hold out or state to the public or to any consumer, directly or
indirectly, that the tax or any part thereof imposed by this chapter shall be assumed or absorbed
by the retailer or that it will not be considered as an element in the price to the consumer or, if
added, that it or any part thereof will be refunded.
57-39.2-10. Records required - Sales for resale exempt.
1. Every retailer required to make a report and pay any tax under this chapter shall
preserve such records of the gross proceeds of sale as the commissioner may require
and every retailer shall preserve for a period of three years and three months all
invoices and other records of goods, wares, or merchandise purchased for resale. All
such books, invoices, and other records must be open to examination at any time by
the commissioner or any of the commissioner's duly authorized agents.
2. Whenever a retailer accepts a resale certificate at the time of making a sale, which
sale would otherwise be subject to the sales tax, and such resale certificate contains
the sales tax permit number of the purchaser, such retailer making the sale is relieved
from submitting the sales tax upon the purchase price of the merchandise sold.
Whenever a person submits a false resale certificate to a retailer, the person
submitting the certificate is personally liable for the tax on the sale.
57-39.2-10.1. Responsibilities of special events promoters - Penalty.
1. A promoter or organizer of a special event at which ten or more special event vendors
participate shall, within twenty days following a special event, provide to the tax
commissioner a list identifying each participating special event vendor. The list must be
in the form and manner prescribed by the tax commissioner and must contain the
name and sales tax permit number of each special vendor. Records must be retained
by the promoter or organizer to the same extent as all transactions involving sales or
use tax as provided in section 57-39.2-10. For purposes of this section:
a. "Promoter" or "organizer" means a person or entity that organizes or promotes a
special event that results in the rental, occupation, or use of a structure, lot, tract
of land, motor vehicle, sample or display case, table, or any other similar items for
the provision of displays, promotional activities, or sale of tangible personal
property or services by special event vendors.
b. "Special event" means an entertainment, amusement, recreation, or marketing
event that occurs at a single location on a recurring or irregular basis and where
sales, displays, or promotional activities occur. Special events include auto
shows, boat shows, gun shows, sport shows, knife shows, home shows, craft
shows, flea markets, carnivals, circuses, bazaars, fairs, and art or other
merchandise displays or exhibits.
c. "Special event vendor" means a person or entity making sales, providing
displays, or otherwise engaging in promotional activities at a special event.
2. A special event does not include an event that is organized for the exclusive benefit of
a nonprofit organization if all of the net proceeds of the retail sales of all vendors at the
event inure to the benefit of a nonprofit organization.
3. A promoter or organizer of a special event who fails or refuses to comply with this
section may be subject to a penalty of two hundred fifty dollars per event, which
amount may be waived by the tax commissioner for good cause shown.
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57-39.2-11. Return of gross receipts.
1. Except as provided in section 57-39.2-12 for monthly reports and payments, on or
before the last day of the month following the close of the first quarterly period, and on
or before the last day of the month following each subsequent quarterly period of three
months, the retailer shall make out a return for the preceding quarterly period in the
form and manner as may be prescribed by the commissioner, showing the gross
receipts of the retailer, the amount of the tax for the period covered by the return, and
any further information as the commissioner may require to enable the retailer
correctly to compute and collect the tax herein levied. The commissioner, upon request
by any retailer and a proper showing of the necessity therefor, may grant unto the
retailer an extension of time not to exceed thirty days for making a return. If the
extension is granted to any retailer, the time in which the retailer is required to make
payment as provided for in section 57-39.2-12 must be extended for the same period
but interest must be charged upon the amount of the deferred payment at the rate of
twelve percent per annum from the date the tax would have been due if the extension
had not been granted to the date the tax is paid.
2. The commissioner may require the filing of returns and payment of tax on a monthly,
quarterly, annual, or other basis when the commissioner deems it necessary to ensure
payment of the tax imposed by this chapter. Compensation for administrative
expenses under sections 57-39.2-12.1 and 57-40.2-07.1 is allowed under this section
if the retailer qualifies for compensation under sections 57-39.2-12 and 57-40.2-07. If
the retailer's filing responsibility has been assumed by a certified service provider, the
retailer may authorize the certified service provider to claim on behalf of the retailer all
or part of the compensation to which the retailer is entitled under sections 57-39.2-12.1
and 57-40.2-07.1.
3. Returns must be signed by the retailer or a duly authorized agent of the retailer and
must contain a written declaration that they are made and subscribed under the
penalties of this chapter. The tax commissioner may prescribe alternative methods for
signing, subscribing, or verifying a return filed by electronic means, including
telecommunications, that shall have the same validity and consequence as the actual
signature and written declaration for a paper return.
57-39.2-12. (Effective for reporting periods beginning before January 1, 2014)
Payment of tax - Bond - Creation of lien.
1. The tax levied under this chapter is due and payable in quarterly installments on or
before the last day of the month next succeeding each calendar quarterly period,
except that if total sales subject to sales and use taxes for the preceding calendar year
for any business which has been issued a sales tax permit equal or exceed three
hundred thirty-three thousand dollars, the tax levied under this chapter is payable
monthly on or before the last day of the next succeeding month. The retailer shall pay
the total tax due in the manner prescribed by the commissioner. Penalties and interest
for failure to file a return, for filing an incorrect return, or for failure to pay the tax due
are those prescribed in section 57-39.2-18. If the total of sales subject to the tax
decreases below three hundred thirty-three thousand dollars for any succeeding year,
the retailer may return to quarterly filing and payments. When there is a sale of any
business by any retailer or when any business is discontinued by a retailer, the tax
becomes due immediately prior to the sale or discontinuance of the business and if not
paid within fifteen days thereafter it becomes delinquent and subject to the penalties
provided in section 57-39.2-18. In the event of a business reorganization in which the
ownership of the business organization remains in the same person or persons as
prior to the reorganization, the total sales subject to sales and use taxes for the
preceding calendar year for the business that was reorganized must be used to
determine whether the tax is payable monthly under this subsection.
2. Every retailer, at the time of making the return required hereunder, shall compute and
pay to the commissioner the tax due for the preceding period.
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The commissioner, when in the commissioner's judgment it is necessary and advisable
to do so in order to secure the collection of the tax levied under this chapter, may
require any person subject to such tax to file with the commissioner a bond, issued by
a surety company authorized to transact business in this state and approved by the
insurance commissioner as to solvency and responsibility in such amount as the
commissioner may fix, to secure the payment of any tax and penalties due or which
may become due from such person. In lieu of such bond, securities approved by the
commissioner in such amounts as the commissioner prescribes, may be deposited
with the commissioner, which securities must be kept in the custody of the
commissioner and may be sold by the commissioner at public or private sale, without
notice to the depositor thereof, if it becomes necessary so to do in order to recover any
tax and penalties due. All moneys deposited as security with the commissioner under
the provisions of this subsection must be paid by the commissioner to the state
treasurer and must be credited by the state treasurer into a special fund to be known
as the retail sales and use tax security trust fund. If any tax, penalty, or costs imposed
by this chapter are not paid when due, by the person depositing moneys with the
commissioner as security for the payment of tax, penalty, or costs imposed by this
chapter, the commissioner shall certify that information to the director of the office of
management and budget who shall transmit the money to the commissioner who shall
apply the money deposited by the person or so much thereof as is necessary to satisfy
the tax and penalties due. The commissioner, when in the commissioner's judgment it
is no longer necessary to require the deposit to be maintained by the person, shall
certify that information to the director of the office of management and budget who
shall pay the unused money to the person entitled thereto.
4. Remittances on account of tax due under this chapter may not be deemed or
considered payment thereof unless or until the commissioner has collected or received
the amount due for such tax in cash or equivalent credit.
(Effective for reporting periods beginning after December 31, 2013) Payment of tax Bond - Creation of lien.
1. The tax levied under this chapter is due and payable in quarterly installments on or
before the last day of the month next succeeding each calendar quarterly period,
except that if total sales subject to sales and use taxes for the preceding calendar year
for any business which has been issued a sales tax permit equal or exceed three
hundred thirty-three thousand dollars, the tax levied under this chapter is payable
monthly on or before the last day of the next succeeding month. The retailer shall pay
the total tax due in the manner prescribed by the commissioner. Penalties and interest
for failure to file a return, for filing an incorrect return, or for failure to pay the tax due
are those prescribed in section 57-39.2-18. If the total of sales subject to the tax
decreases below three hundred thirty-three thousand dollars for any succeeding year,
the retailer may return to quarterly filing and payments. When there is a sale of any
business by any retailer or when any business is discontinued by a retailer, the tax
becomes due immediately prior to the sale or discontinuance of the business and if not
paid within fifteen days thereafter it becomes delinquent and subject to the penalties
provided in section 57-39.2-18. In the event of a business reorganization in which the
ownership of the business organization remains in the same person or persons as
prior to the reorganization, the total sales subject to sales and use taxes for the
preceding calendar year for the business that was reorganized must be used to
determine whether the tax is payable monthly under this subsection.
2. Every retailer, at the time of making the return required hereunder, shall compute and
pay to the commissioner the tax due for the preceding period.
3. The commissioner, when in the commissioner's judgment it is necessary and advisable
to do so in order to secure the collection of the tax levied under this chapter, may
require any person subject to such tax to file with the commissioner a bond, issued by
a surety company authorized to transact business in this state and approved by the
insurance commissioner as to solvency and responsibility in such amount as the
commissioner may fix, to secure the payment of any tax and penalties due or which
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may become due from such person. In lieu of such bond, securities approved by the
commissioner in such amounts as the commissioner prescribes, may be deposited
with the commissioner, which securities must be kept in the custody of the
commissioner and may be sold by the commissioner at public or private sale, without
notice to the depositor thereof, if it becomes necessary so to do in order to recover any
tax and penalties due. All moneys deposited as security with the commissioner under
the provisions of this subsection must be paid by the commissioner to the state
treasurer and must be credited by the state treasurer into a special fund to be known
as the retail sales and use tax security trust fund. If any tax, penalty, or costs imposed
by this chapter are not paid when due, by the person depositing moneys with the
commissioner as security for the payment of tax, penalty, or costs imposed by this
chapter, the commissioner shall certify that information to the director of the office of
management and budget who shall transmit the money to the commissioner who shall
apply the money deposited by the person or so much thereof as is necessary to satisfy
the tax and penalties due. The commissioner, when in the commissioner's judgment it
is no longer necessary to require the deposit to be maintained by the person, shall
certify that information to the director of the office of management and budget who
shall pay the unused money to the person entitled thereto.
Remittances on account of tax due under this chapter may not be deemed or
considered payment thereof unless or until the commissioner has collected or received
the amount due for such tax in cash or equivalent credit.
A retailer required to file monthly returns under subsection 1 shall file the returns by an
electronic method approved by the commissioner. A retailer that does not comply with
the requirement to file reports electronically is deemed to have failed to file the sales
and use tax returns as provided in section 57-39.2-15 and is subject to the penalties
provided in section 57-39.2-18. The commissioner may, for good cause shown, waive
the filing requirements of this subsection.
57-39.2-12.1. Deduction to reimburse retailer for administrative expenses.
1. A retailer registered to report and remit sales, use, or gross receipts tax imposed under
chapter 57-39.2, 57-39.5, 57-39.6, or 57-40.2 may deduct and retain one and one-half
percent of the tax due. The aggregate of deductions allowed by this section and
section 57-40.2-07.1 may not exceed one hundred ten dollars per return. Retailers that
receive compensation under this subsection may not receive additional compensation
under subsection 2 or 3 for the same period.
2. A certified service provider that contracts with retailers to calculate, collect, and remit
tax due on behalf of retailers may deduct and retain from the tax remitted to the tax
commissioner compensation or a monetary allowance up to the amount approved by
the streamlined sales and use tax governing board effective June 1, 2006. The
compensation provided in this subsection applies only to tax remitted by certified
service providers on behalf of retailers that are remote sellers registered to collect
sales and use tax in this state under chapter 57-39.4. Certified service providers that
receive compensation under this subsection may not receive additional compensation
under subsection 1 or 3 for the same period.
3. A retailer that is a remote seller registered to collect sales and use tax under
chapter 57-39.4 and that uses a certified automated system to calculate, report, and
remit tax due under chapters 57-39.2, 57-39.4, and 57-40.2 may deduct and retain
compensation or a monetary allowance up to the amount approved by the streamlined
sales and use tax governing board during its December 2006 meeting. Retailers that
receive compensation under this subsection may not receive additional compensation
under subsection 1 or 2 for the same period.
4. For purposes of this section, "remote seller" means a retailer that does not have an
adequate physical presence to establish nexus in this state for sales and use tax
purposes.
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Compensation may not be deducted and retained under this section unless the tax
due is paid within the time limitations under section 57-39.2-12 or 57-40.2-07 or
chapter 57-39.4.
The deduction allowed retailers or certified service providers by this section is to
reimburse retailers directly or indirectly for expenses incurred in keeping records,
preparing and filing returns, remitting the tax, and supplying information to the tax
commissioner upon request.
57-39.2-13. (Effective through July 31, 2015, or see note) Lien of tax - Collection Action authorized.
1. Whenever any taxpayer liable to pay a tax or penalty imposed refuses or neglects to
pay the same, the amount, including any interest, penalty, or addition to such tax,
together with the costs that may accrue in addition thereto, is a lien in favor of the state
of North Dakota upon all property and rights to property, whether real or personal,
belonging to said taxpayer, and in the case of property in which a deceased taxpayer
held an interest as joint tenant or otherwise with right of survivorship at the time of
death, the lien continues as a lien against the property in the hands of the survivor or
survivors to the extent of the deceased taxpayer's interest therein, which interest must
be determined by dividing the value of the entire property at the time of the taxpayer's
death by the number of joint tenants or persons interested therein.
2. The lien aforesaid attaches at the time the tax becomes due and payable and
continues until the liability for such amount is satisfied. For the purposes of this
provision the words "due" and "due and payable" mean the first instant at which the tax
becomes due.
3. Any mortgagee, purchaser, judgment creditor, or lien claimant acquiring any interest in,
or lien on, any property situated in the state, prior to the commissioner filing in the
central indexing system maintained by the secretary of state, a notice of the lien
provided for in section 57-39.2-12, takes free of, or has priority over, the lien.
4. The commissioner shall index in the central indexing system the following data:
a. The name of the taxpayer.
b. The name "State of North Dakota" as claimant.
c. The date and time the notice of lien was indexed.
d. The amount of the lien.
The notice of lien is effective as of eight a.m. next following the indexing of the notice.
Any notice of lien filed by the commissioner with a recorder may be indexed in the
central indexing system without changing its original priority as to property in the
county where the lien was filed.
5. The commissioner is exempt from the payment of the filing fees as otherwise provided
by law for the indexing of the notice of lien, or for its satisfaction.
6. Upon payment of the tax as to which the commissioner has indexed notice in the
central indexing system, the commissioner shall index a satisfaction of the lien in the
central indexing system.
7. The attorney general, upon the request of the commissioner, shall bring an action at
law or in equity, as the facts may justify, without bond to enforce payment of any taxes
and any penalties, or to foreclose the lien therefor in the manner provided for
mortgages on real or personal property, and in such action shall have the assistance of
the state's attorney of the county in which the action is pending.
8. It is expressly provided that the foregoing remedies of the state are cumulative and
that no action taken by the commissioner or attorney general may be construed to be
an election on the part of the state or any of its officers to pursue any remedy
hereunder to the exclusion of any other remedy provided by law.
9. The technical, legal requirements outlined in this section relating to tax liens on all real
and personal property of the taxpayer to ensure payment of the taxes, including
penalties, interest, and other costs, are self-explanatory.
(Effective after July 31, 2015, or see note) Lien of tax - Collection - Action authorized.
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Whenever any taxpayer liable to pay a tax or penalty imposed refuses or neglects to
pay the same, the amount, including any interest, penalty, or addition to such tax,
together with the costs that may accrue in addition thereto, is a lien in favor of the state
of North Dakota upon all property and rights to property, whether real or personal,
belonging to said taxpayer, and in the case of property in which a deceased taxpayer
held an interest as joint tenant or otherwise with right of survivorship at the time of
death, the lien continues as a lien against the property in the hands of the survivor or
survivors to the extent of the deceased taxpayer's interest therein, which interest must
be determined by dividing the value of the entire property at the time of the taxpayer's
death by the number of joint tenants or persons interested therein.
The lien aforesaid attaches at the time the tax becomes due and payable and
continues until the liability for such amount is satisfied. For the purposes of this
provision the words "due" and "due and payable" mean the first instant at which the tax
becomes due.
Any mortgagee, purchaser, judgment creditor, or lien claimant acquiring any interest in,
or lien on, any property situated in the state, prior to the commissioner filing in the
central indexing system maintained by the secretary of state, a notice of the lien
provided for in section 57-39.2-12, takes free of, or has priority over, the lien.
The commissioner shall index in the central indexing system the following data:
a. The name of the taxpayer.
b. The name "State of North Dakota" as claimant.
c. The date and time the notice of lien was indexed.
d. The amount of the lien.
e. The internal revenue service taxpayer identification number or social security
number of the taxpayer.
The notice of lien is effective as of eight a.m. next following the indexing of the notice.
Any notice of lien filed by the commissioner may be indexed in the central indexing
system without changing its original priority as to property in the county where the lien
was filed.
The commissioner is exempt from the payment of the filing fees as otherwise provided
by law for the indexing of the notice of lien, or for its satisfaction.
Upon payment of the tax as to which the commissioner has indexed notice in the
central indexing system, the commissioner shall index a satisfaction of the lien in the
central indexing system.
The attorney general, upon the request of the commissioner, shall bring an action at
law or in equity, as the facts may justify, without bond to enforce payment of any taxes
and any penalties, or to foreclose the lien therefor in the manner provided for
mortgages on real or personal property, and in such action shall have the assistance of
the state's attorney of the county in which the action is pending.
It is expressly provided that the foregoing remedies of the state are cumulative and
that no action taken by the commissioner or attorney general may be construed to be
an election on the part of the state or any of its officers to pursue any remedy
hereunder to the exclusion of any other remedy provided by law.
The technical, legal requirements outlined in this section relating to tax liens on all real
and personal property of the taxpayer to ensure payment of the taxes, including
penalties, interest, and other costs, are self-explanatory.
57-39.2-14. Permits - Application fee for reissuance.
1. A person may not engage in or transact business as a retailer within this state unless a
permit or permits shall have been issued to that person as hereinafter prescribed.
Every person desiring to engage in or conduct business as a retailer within this state
shall file with the commissioner an application for a permit or permits. Every
application for such a permit shall be made upon a form prescribed by the
commissioner and shall set forth the name under which the applicant transacts or
intends to transact business, the location of the applicant's place or places of
business, and such other information as the commissioner may require. The
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application shall be signed by the owner if a natural person; in the case of an
association, partnership, or limited liability company, by a member or partner thereof;
and in the case of a corporation, by an executive officer thereof or some person
specifically authorized by the corporation to sign the application, to which shall be
attached the written evidence of that person's authority. Any person registering under
the agreement adopted under chapter 57-39.4 shall register in this state. Any person
who is registered under the agreement is not required to sign the application and may
register through an agent. Any person who is registered under such agreement may
cancel its registration at any time but is liable for remitting any sales taxes collected
before cancellation. Registration under the agreement and collection of tax does not in
and of itself create nexus for other taxes or fees imposed by this state.
Upon determining that each applicant for a sales tax permit is a bona fide retailer, the
commissioner shall grant and issue to each applicant a permit for each place of
business within the state. A permit is not assignable and shall be valid only for the
person in whose name it is issued and for the transaction of business at the place
designated therein. It shall at all times be conspicuously displayed at the place for
which issued. Any transient merchant who is in the business of soliciting or making
sales at retail to consumers shall, before soliciting such a sale from a consumer,
exhibit to the consumer or prospective consumer the retail sales tax permit required by
this section; for the purposes of this sentence the term "transient merchant" shall
include any person, individual, copartnership, corporation, or limited liability company,
either as principal or agent, who solicits, engages in, does, or transacts any temporary
or transient business in this state, either in one locality, or in traveling from place to
place in this state, selling goods, wares, and merchandise, who does not intend to
become and does not become a permanent merchant of such place, and who, for the
purpose of carrying on such business, hires, leases, occupies, or uses, a building,
structure, lot, tract, railroad car, motor vehicle, or display case or sample case of any
kind for the exhibition and sale of such goods, wares, and merchandise.
Permits issued under the provisions of this section shall be valid and effective until
revoked by the commissioner.
Whenever the holder of a permit fails to comply with any of the provisions of this
chapter or any rules or regulations prescribed by the commissioner and adopted under
this chapter, or whenever the holder of a permit shall file returns showing no tax due
for four consecutive quarters, the commissioner, upon hearing after giving ten days'
notice of the time and place of the hearing to show cause why the holder's permit
should not be revoked, may revoke the permit. The commissioner also shall have the
power to restore licenses after such revocation.
Whenever the holder of a permit has had such a permit revoked for failure to comply
with the provisions of this chapter or any rules and regulations prescribed by the
commissioner and adopted under this chapter, the commissioner shall charge a fee of
fifty dollars for the issuance or reissuance of such permit. However, if a permit was
revoked for filing returns showing no tax due for four consecutive quarters, the
commissioner shall charge only a fee of five dollars for the issuance or reissuance of
such permit.
All permits in effect at the time this chapter takes effect are hereby continued and shall
remain in full force and effect unless revoked as herein provided. However, the
commissioner may issue a new form of permit to replace, at no charge to the
permitholders, all permits previously granted and issued that have not been revoked or
surrendered.
Whenever the holder of a permit is convicted of violating section 12.1-23-16, the
commissioner shall revoke the permit and the holder is not eligible to receive another
permit for a period of ten years from the date of conviction. Any person convicted of
violating section 12.1-23-16 who is not a holder of a permit at the time of conviction is
not eligible to receive a permit for a period of ten years from the date of conviction.
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57-39.2-14.1. Commissioner may authorize direct payment of sales and use tax.
Upon application by any person, the commissioner may issue to the applicant, subject to
such terms and conditions as the commissioner deems reasonable and necessary, a permit to
be known as a direct payment permit authorizing such applicant to make direct payment to the
commissioner of any sales or use tax imposed on any purchase, use, storage, or consumption
in this state of tangible personal property or services by such applicant. Such applicant may
elect to pay any such taxes directly to the commissioner and for that purpose may issue to the
retailer selling or furnishing the tangible personal property or services subject to such taxes a
direct payment certificate in the form prescribed by the commissioner, assuming the obligation
to pay all such taxes, and the receipt of such certificate discharges such retailer from any duty
to collect or liability for such taxes. Such direct payment permit may be revoked by the
commissioner, with or without cause, at any time.
57-39.2-15. Failure to file return - Incorrect return.
If a return required by this chapter is not filed, or if a return when filed is incorrect or
insufficient, the commissioner shall determine the amount of tax due from any information as the
commissioner may be able to obtain, and, if necessary, may estimate the tax on the basis of
external indices, such as number of employees of the person concerned, rentals paid by the
person, the person's stock on hand, and other factors. The commissioner shall give notice of the
determination to the person liable for the tax. If the determination of tax due relates to an
incorrect or insufficient return filed by a taxpayer, notice of the determination must be given not
later than three years after the last day on which the return was due or three years after the
return was filed, whichever period expires later; if it is determined upon audit that the tax due
was twenty-five percent or more above the amount reported on a return, notice of determination
of tax due must be given not later than six years after the last day on which the return was due
or six years after the return was filed, whichever is later. Notice of determination of tax due for
any reporting period for which a taxpayer failed to file a return must be given not later than six
years after the due date of the return but if fraudulent information is given in a return or the
failure to file a return is due to the fraudulent intent or willful attempt of the taxpayer in any
manner to evade the tax, the time limitation herein provided for giving notice of the
determination of tax due does not apply. The determination of tax due fixes the tax finally and
irrevocably unless the person against whom it is assessed, within thirty days after the giving of
notice of the determination, protests the determination under rules adopted by the commissioner
and under chapter 28-32.
57-39.2-15.1. Extensions of time to perform sales tax audits.
1. Before the expiration of time prescribed in section 57-39.2-15 for the assessment of
tax, the commissioner and the taxpayer may agree in writing to an extension of time
for the assessment of the tax. The tax may be assessed at any time prior to the
expiration of the period agreed upon. The period agreed upon may be extended by
subsequent agreements in writing made before the expiration of the period previously
agreed upon. No extension may be for more than one year from the date of the
extension agreement.
2. If a taxpayer agrees to an extension of time for assessment of tax, the period of time
for refund claims will be similarly extended.
57-39.2-15.2. Governor and manager liability.
1. If a limited liability company required to hold a permit under this chapter fails for any
reason to file the required returns or to pay the taxes due under this chapter, the
governors, managers, or members of a member-controlled limited liability company,
jointly or severally, charged with the responsibility of supervising the preparation of the
returns and payments are personally liable for the failure. The dissolution of a limited
liability company does not discharge a governor's, manager's, or member's liability for
a prior failure of the limited liability company to file a return or remit the tax due. The
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taxes, penalty, and interest may be assessed and collected under the provisions of this
chapter.
If the governors, managers, or members elect not to be personally liable for the failure
to file the required returns or to pay the tax due, the limited liability company must be
required to make a cash deposit or post with the tax commissioner a bond or
undertaking executed by a surety company authorized to do business in this state. The
cash deposit, bond, or undertaking provided for in this section must be in an amount
equal to the estimated annual sales tax liability of the limited liability company.
57-39.2-15.3. Liability of a general partner in a limited liability limited partnership.
1. If a limited liability limited partnership required to hold a permit under this chapter fails
for any reason to file the required returns or to pay the tax due under this chapter, the
general partners, jointly or severally, charged with the responsibility of supervising the
preparation of the returns and payment of the tax are personally liable for the
partnership's failure. The dissolution of a limited liability limited partnership does not
discharge a general partner's liability for a prior failure of the partnership to file a return
or remit the tax due. The taxes, penalty, and interest may be assessed and collected
pursuant to the provisions of this chapter.
2. If the general partners elect not to be personally liable for the failure to file the required
returns or to pay the tax due, the limited liability limited partnership must make a cash
deposit or post with the commissioner a bond or undertaking executed by a surety
company authorized to do business in this state. The cash deposit, bond, or
undertaking must be in an amount equal to the estimated annual sales tax liability of
the limited liability limited partnership.
57-39.2-16. Appeals.
An appeal may be taken by the taxpayer to the district court of the county in which the
taxpayer resides, or in which the taxpayer's principal place of business is located, within thirty
days after the taxpayer has received notice from the commissioner of the commissioner's
determination as provided for in section 57-39.2-15. The appeal must be taken pursuant to and
in accordance with chapter 28-32.
57-39.2-17. Service of notice.
Any notice, except notice of appeals, authorized or required under the provisions of this
chapter may be given by mailing the same to the person for whom it is intended by registered or
certified mail addressed to such person at the address given in the last return filed by that
person pursuant to the provisions of this chapter, or if no return has been filed, then such
address as may be obtainable. The mailing of such notice is presumptive evidence of the
receipt of the same by the person to whom addressed. Any period of time which is determined
according to the provisions of this chapter by giving of notice commences to run from the date of
registration and posting of such notice.
57-39.2-18. Penalties - Offenses.
1. a. If any person fails to file a return or corrected return or to pay any tax within the
time required by this chapter or, if upon audit, is found to owe additional tax, the
person is subject to interest of one percent of the tax per month or fraction of a
month of delay except the first month after the return or the tax became due.
b. In addition to the tax and interest prescribed in this chapter, a taxpayer is subject
to penalties as follows:
(1) If any taxpayer, without intent to evade any tax imposed by this chapter, fails
to file a return, on or before the prescribed or extended due date, a penalty
equal to five percent of the tax required to be reported, or five dollars,
whichever is greater, must be added if the failure is for not more than one
month, counting each fraction of a month as an entire month, with an
additional five percent for each additional month or fraction of a month
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during which the failure continues, not exceeding twenty-five percent in the
aggregate.
(2) If any taxpayer, without intent to evade any tax imposed by this chapter, fails
to pay the amount shown as tax due on any return, filed on or before the
prescribed or extended due date, a penalty of five percent of the tax due, or
five dollars, whichever is greater, must be added to the tax.
(3) If upon audit of a taxpayer's return an additional tax is found to be due,
penalty as prescribed in subdivision a or b must be added to the tax.
(4) The commissioner, if satisfied that the delay was excusable, may waive, and
if paid, refund all or any part of the penalty and interest. The penalty and
interest must be paid to the commissioner and disposed of in the same
manner as other receipts under this chapter. Unpaid penalties and interest
may be enforced in the same manner as the tax imposed by this chapter.
Any person who sells tangible personal property, tickets or admissions to places of
amusement, and athletic events, or steam, gas, and communication service at retail in
this state after that person's permit shall have been revoked, or without procuring a
permit as provided in section 57-39.2-14, or who violates section 57-39.2-09, and the
officers of any corporation or the managers of any limited liability company who so
acts, is guilty of a class A misdemeanor.
Repealed by S.L. 1975, ch. 106, § 673.
The certificate of the commissioner to the effect that a tax has not been paid, that a
return has not been filed, or that information has not been supplied pursuant to the
provisions of this chapter, shall be prima facie evidence thereof.
Any person failing to comply with any of the provisions of this chapter, or failing to
remit within the time herein provided to the state the tax due on any sale or purchase
of tangible personal property subject to said sales tax, shall be guilty of a class A
misdemeanor.
57-39.2-18.1. Corporate officer liability.
1. If a corporation required to hold a permit issued under this chapter fails for any reason
to file the required returns or to pay the tax due, the president, vice president,
secretary, or treasurer of the corporation, jointly or severally, having control, or
supervision of, or charged with the responsibility for making the returns and payments
are personally liable for the failure. The dissolution of a corporation shall not discharge
an officer's liability for a prior failure of the corporation to make a return or remit the tax
due. The sum due for the liability may be assessed and collected pursuant to the
provisions of this chapter for the assessment and collection of other liabilities.
2. If the corporate officers elect not to be personally liable for the failure to file the
required returns or to pay the tax due, the corporation must be required to make a
cash deposit or post with the tax commissioner a bond or undertaking executed by a
surety company authorized to do business in this state. The cash deposit, bond, or
undertaking provided for in this section must be in an amount equal to the estimated
annual sales tax liability of the corporation.
57-39.2-19. Commissioner to administer chapter.
The commissioner is hereby charged with the administration of this chapter and the taxes
imposed thereby. Such commissioner may prescribe all rules and regulations not inconsistent
with the provisions of this chapter, necessary and advisable for its detailed administration and to
effectuate the purposes, including the right to provide for the issuance and sale by the state of
coupons covering the amount of tax or taxes to be paid under this chapter, if such method is
deemed advisable by said commissioner.
57-39.2-20. Tax, penalties, and other charges paid to commissioner - Disposition.
All fees, taxes, penalties, and other charges imposed and collected under this chapter must
be paid to the commissioner in the form of a remittance payable to the commissioner, who shall
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transmit each payment monthly to the state treasurer to be deposited in the state treasury to the
credit of the general fund.
57-39.2-21. General powers.
1. The commissioner, for the purpose of ascertaining the correctness of any return or for
the purpose of making an estimate of the taxable income and receipts of any taxpayer,
has power to examine or cause to be examined by any agent or representative
designated by the commissioner books, papers, records, or memoranda; to require by
subpoena the attendance and testimony of witnesses; to issue and sign subpoenas; to
administer oaths; to examine witnesses and receive evidence; and to compel
witnesses to produce for examination books, papers, records, and documents relating
to any matter which the commissioner has the authority to investigate or determine.
2. If the commissioner finds the taxpayer has made a fraudulent return, the costs of said
hearing must be taxed to the taxpayer. In all other cases the cost must be paid by the
state.
3. The fees and mileage to be paid witnesses and taxed as costs must be the same as
prescribed by law in proceedings in the district court of this state in civil cases. All
costs must be taxed in the manner provided by law in proceedings in civil cases. When
the costs are taxed to the taxpayer, they must be added to the taxes assessed against
said taxpayer and must be collected in the same manner. Costs taxed to the state
must be certified by the commissioner to the state treasurer, who shall issue warrants
for the amount of said costs.
4. In cases of disobedience to a subpoena, the commissioner may invoke the aid of any
court of competent jurisdiction in requiring the attendance and testimony of witnesses
and production of records, books, papers, and documents, and such court may issue
an order requiring the person to appear before the commissioner and give evidence or
produce records, books, papers, and documents, as the case may be, and any failure
to obey such order of court may be punished by the court as contempt thereof.
5. Testimony on hearings before the commissioner may be taken by a deposition as in
civil cases, and any person may be compelled to appear and depose in the same
manner as witnesses may be compelled to appear and testify as hereinbefore
provided.
57-39.2-22. Commissioner may appoint agents and employees - Compensation Bond.
1. The commissioner may appoint such agents, auditors, clerks, and employees as the
commissioner deems necessary, fix their salaries and compensation and prescribe
their duties and powers, and may remove such persons so appointed. Each auditor
appointed by the commissioner must have had at least three years' experience, or the
education equivalent thereof, in the auditing and checking of books of account.
2. All such agents and employees must be allowed such reasonable and other necessary
traveling expenses as may be incurred in the performance of their duties not to
exceed, however, such amounts as are now or may hereafter be fixed by law.
3. The commissioner may require such of the officers, agents, and employees as the
commissioner designates to give bond for the faithful performance of the duties in
such sum and such sureties as the commissioner determines and the state shall pay
the premiums on such bonds.
4. The commissioner may utilize the office of the treasurer of the various counties in
order to administer this chapter and effectuate its purposes and may appoint the
treasurers of the various counties as the commissioner's agents to collect any or all of
the taxes imposed by this chapter. No additional compensation may be paid to said
treasurer by reason thereof.
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57-39.2-23. Information deemed confidential - Certain releases of information
authorized.
Except as provided by law:
1. a. The commissioner or an individual having an administrative duty under this
chapter may not divulge or make known in any manner whatever the business
affairs, operations, or information obtained from any person under any reporting
requirement of this chapter, or by an investigation of any person in the discharge
of official duty, or the amount or sources of income, profits, losses, expenditures,
or any particulars set forth or disclosed in any return, or permit any return or copy
or any book containing any abstract of particulars to be seen or examined by any
individual.
b. A court of competent jurisdiction may issue an order or subpoena directing the tax
commissioner to disclose state tax return information to a local, state, or federal
law enforcement official conducting a criminal investigation if the court determines
that the facts submitted by the applicant satisfy the following:
(1) There is probable cause to believe that a specific criminal act has been
committed and that the return or return information constitutes evidence of a
criminal offense or may be relevant to a matter relating to the commission of
the criminal offense;
(2) The return or return information is sought exclusively for use in a criminal
investigation or proceeding concerning such act; and
(3) The information sought to be disclosed cannot reasonably be obtained
under the circumstances, from another source.
c. Before obtaining an order under this subsection, a law enforcement official may
request information from the tax commissioner as to whether a taxpayer, which is
the subject of a criminal investigation for which a return or return information is or
may be relevant to the commission of a criminal offense, has complied with the
requirements of this chapter. For purposes of this request, the tax commissioner
is limited to stating that the taxpayer has or has not complied with these
requirements.
d. Except as required during court proceedings, tax return information disclosed to
law enforcement under this section remains confidential during an active criminal
investigation, after the investigation, after prosecution concludes, or until the time
period for appeals has expired, whichever is later.
2. The commissioner may authorize examination of those returns by other state officers
and at the commissioner's discretion furnish to the tax officials of other states, the
multistate tax commission, and the United States any information contained in the tax
returns and reports and related schedules and documents filed under this chapter, and
in the related report of an audit or investigation, if the information is furnished solely for
tax purposes. The multistate tax commission may make the information available to
the tax officials of any other state and the United States for tax purposes.
3. The commissioner may furnish to workforce safety and insurance, the job insurance
division of job service North Dakota, and the secretary of state, upon request of the
respective agency, a list or lists of holders of permits issued under this chapter or
chapter 57-40.2, together with the addresses and tax department file identification
numbers of those permitholders. The agency may use the list or lists only for the
purpose of administering the duties of the agency. The commissioner may furnish to
the unclaimed property division of the board of university and school lands, upon its
request, the name, address, and the permitholder's federal identification number for
the sole purpose of identifying the owner of an unclaimed voucher authorized by the
commissioner.
4. The commissioner may furnish to a state agency or private entity a list of names and
addresses of holders of permits issued under this chapter or chapter 57-40.2 for the
purpose of jointly publishing or distributing publications or other information under
section 54-06-04.3. Any information provided may only be used for the purpose of
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5.
6.
7.
8.
jointly publishing or distributing publications or other information as provided in section
54-06-04.3.
The commissioner may make information pertaining to city lodging taxes, city lodging
and restaurant taxes, or city or county sales and use taxes, contained in tax returns,
reports, related schedules and documents, and reports of an audit or investigation
available upon request to no more than two duly elected or appointed members of the
governing body of a city or county for which collection and administration of the tax is
required by statute or a tax collection agreement administered under section
57-01-02.1. The governing body of the city or county or its members may not divulge
or make known in any manner the business affairs, operations, or other information
acquired from the commissioner under this subsection concerning any person,
corporation, limited liability company, or other entity unless the disclosure is by judicial
order and for tax administration purposes only.
The commissioner or any person having an administrative duty under this chapter may
announce that a permit has been revoked.
The tax commissioner, upon written request from the director of the North Dakota
lottery, may provide a written statement to the director, employees, or agents of the
North Dakota lottery, in which the tax commissioner is limited to stating that the lottery
retailer applicant has complied or not complied with the requirements of this chapter.
The information obtained under this subsection is confidential and may be used for the
sole purpose of determining whether the applicant meets the requirements of
subsections 3, 4, and 5 of section 53-12.1-07.
Upon request, the commissioner may furnish to the unclaimed property division of the
board of university and school lands, a taxpayer's name, address, and federal
identification number for identifying the owner of an unclaimed voucher authorized by
the commissioner or to locate the apparent owner of unclaimed property as provided
under chapter 47-30.1.
57-39.2-24. Correction of errors.
If it appears that, as a result of a mistake, an amount of tax, penalty, or interest has been
paid which was not due under the provisions of this chapter, then such amount must be credited
against any tax due, or to become due, under this chapter from the person who made the
erroneous payment, or such amount must be refunded to such person; provided, that the
person who made the erroneous payment shall present a claim for refund or credit to the
commissioner not later than three years after the due date of the return for the period for which
the erroneous payment was made or one year after the erroneous payment was made,
whichever is later.
57-39.2-25. Payment of refund.
1. Whenever by any provisions of this chapter a refund is authorized, the commissioner
shall certify the amount of the refund, the reason therefor, and the name of the payee
to the office of management and budget, who shall thereupon draw a warrant on the
general fund in the amount specified payable to the named payee. Interest of ten
percent per annum must be allowed and paid upon any overpayment of tax from sixty
days after the due date of the return or after the date the return was filed or after the
date the tax due was fully paid, whichever comes later, to the date of the refund.
2. If the tax commissioner disallows a claim for credit or refund, the tax commissioner
shall notify the taxpayer accordingly. The decision of the tax commissioner to deny a
claim is final and irrevocable thirty days after the date of notice unless within the
thirty-day period the taxpayer files a written protest. A written protest must be filed
under rules adopted by the tax commissioner under chapter 28-32.
57-39.2-26. Allocation of revenue.
Except as provided by sections 57-39.2-26.1 and 57-39.2-26.2, all moneys collected and
received under this chapter must be paid into the state treasury and must be credited by the
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state treasurer to the general fund. Moneys deposited with the commissioner as security for the
payment of tax, penalties, or costs due must be deposited and accounted for as provided in
subsection 3 of section 57-39.2-12.
57-39.2-26.1. (Effective for taxable events occurring through June 30, 2014) Allocation
of revenues among political subdivisions.
Notwithstanding any other provision of law, a portion of sales, gross receipts, use, and
motor vehicle excise tax collections, equal to forty percent of an amount determined by
multiplying the quotient of one percent divided by the general sales tax rate, that was in effect
when the taxes were collected, times the net sales, gross receipts, use, and motor vehicle
excise tax collections under chapters 57-39.2, 57-39.5, 57-39.6, 57-40.2, and 57-40.3 must be
deposited by the state treasurer in the state aid distribution fund. The state tax commissioner
shall certify to the state treasurer the portion of sales, gross receipts, use, and motor vehicle
excise tax net revenues that must be deposited in the state aid distribution fund as determined
under this section. Revenues deposited in the state aid distribution fund are provided as a
standing and continuing appropriation and must be allocated as follows:
1. Fifty-three and seven-tenths percent of the revenues must be allocated to counties in
the first month after each quarterly period as provided in this subsection.
a. Sixty-four percent of the amount must be allocated among the seventeen
counties with the greatest population, in the following manner:
(1) Thirty-two percent of the amount must be allocated equally among the
counties; and
(2) The remaining amount must be allocated based upon the proportion each
such county's population bears to the total population of all such counties.
b. Thirty-six percent of the amount must be allocated among all counties, excluding
the seventeen counties with the greatest population, in the following manner:
(1) Forty percent of the amount must be allocated equally among the counties;
and
(2) The remaining amount must be allocated based upon the proportion each
such county's population bears to the total population of all such counties.
A county shall deposit all revenues received under this subsection in the county
general fund. Each county shall reserve a portion of its allocation under this subsection
for further distribution to, or expenditure on behalf of, townships, rural fire protection
districts, rural ambulance districts, soil conservation districts, county recreation service
districts, county hospital districts, the Garrison Diversion Conservancy District, the
southwest water authority, and other taxing districts within the county, excluding school
districts, cities, and taxing districts within cities. The share of the county allocation
under this subsection to be distributed to a township must be equal to the percentage
of the county share of state aid distribution fund allocations that township received
during calendar year 1996. The governing boards of the county and township may
agree to a different distribution.
2. Forty-six and three-tenths percent of the revenues must be allocated to cities in the
first month after each quarterly period based upon the proportion each city's population
bears to the total population of all cities.
A city shall deposit all revenues received under this subsection in the city general
fund. Each city shall reserve a portion of its allocation under this subsection for further
distribution to, or expenditure on behalf of, park districts and other taxing districts
within the city, excluding school districts. The share of the city allocation under this
subsection to be distributed to a park district must be equal to the percentage of the
city share of state aid distribution fund allocations that park district received during
calendar year 1996, up to a maximum of thirty percent. The governing boards of the
city and park district may agree to a different distribution.
(Effective for taxable events occurring after June 30, 2014) Allocation of revenues
among political subdivisions. Notwithstanding any other provision of law, a portion of sales,
gross receipts, use, and motor vehicle excise tax collections, equal to forty-three and one-half
Page No. 49
percent of an amount determined by multiplying the quotient of one percent divided by the
general sales tax rate, that was in effect when the taxes were collected, times the net sales,
gross receipts, use, and motor vehicle excise tax collections under chapters 57-39.2, 57-39.5,
57-39.6, 57-40.2, and 57-40.3 must be deposited by the state treasurer in the state aid
distribution fund. The state tax commissioner shall certify to the state treasurer the portion of
sales, gross receipts, use, and motor vehicle excise tax net revenues that must be deposited in
the state aid distribution fund as determined under this section. Revenues deposited in the state
aid distribution fund are provided as a standing and continuing appropriation and must be
allocated as follows:
1. Fifty-three and seven-tenths percent of the revenues must be allocated to counties in
the first month after each quarterly period as provided in this subsection.
a. Sixty-four percent of the amount must be allocated among the seventeen
counties with the greatest population, in the following manner:
(1) Thirty-two percent of the amount must be allocated equally among the
counties; and
(2) The remaining amount must be allocated based upon the proportion each
such county's population bears to the total population of all such counties.
b. Thirty-six percent of the amount must be allocated among all counties, excluding
the seventeen counties with the greatest population, in the following manner:
(1) Forty percent of the amount must be allocated equally among the counties;
and
(2) The remaining amount must be allocated based upon the proportion each
such county's population bears to the total population of all such counties.
A county shall deposit all revenues received under this subsection in the county
general fund. Each county shall reserve a portion of its allocation under this subsection
for further distribution to, or expenditure on behalf of, townships, rural fire protection
districts, rural ambulance districts, soil conservation districts, county recreation service
districts, county hospital districts, the Garrison Diversion Conservancy District, the
southwest water authority, and other taxing districts within the county, excluding school
districts, cities, and taxing districts within cities. The share of the county allocation
under this subsection to be distributed to a township must be equal to the percentage
of the county share of state aid distribution fund allocations that township received
during calendar year 1996. The governing boards of the county and township may
agree to a different distribution.
2. Forty-six and three-tenths percent of the revenues must be allocated to cities in the
first month after each quarterly period based upon the proportion each city's population
bears to the total population of all cities.
A city shall deposit all revenues received under this subsection in the city general
fund. Each city shall reserve a portion of its allocation under this subsection for further
distribution to, or expenditure on behalf of, park districts and other taxing districts
within the city, excluding school districts. The share of the city allocation under this
subsection to be distributed to a park district must be equal to the percentage of the
city share of state aid distribution fund allocations that park district received during
calendar year 1996, up to a maximum of thirty percent. The governing boards of the
city and park district may agree to a different distribution.
57-39.2-26.2. Allocation of revenues to senior citizen services and programs
matching fund - Continuing appropriation.
Notwithstanding any other provision of law, a portion of sales, use, and motor vehicle excise
tax collections equal to the amount of revenue that would have been generated by a levy of
eighty-five percent of one mill on the taxable valuation of all property in the state subject to a
levy under section 57-15-56 in the previous taxable year must be deposited by the state
treasurer in the senior citizen services and programs fund during the period from July first
through December thirty-first of each year. The state tax commissioner shall certify to the state
treasurer the portion of sales, use, and motor vehicle excise tax revenues which must be
deposited in the fund as determined under this section. Revenues deposited in the senior citizen
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services and programs fund are provided as a standing and continuing appropriation for
allocation as provided in subsection 5 of section 57-15-56. Any unexpended and unobligated
amount in the senior citizen services and programs fund at the end of any biennium must be
transferred by the state treasurer to the state general fund.
57-39.2-27. Disposition of excess tax collections.
Whenever a retailer has collected a sales tax from a customer in excess of the amount
prescribed or due under this chapter, and if the retailer does not refund the excessive tax
collected to the customer, the amount so collected by the retailer must be paid by the retailer to
the commissioner in the quarterly period in which the excessive collection occurred. If the
excessive collection is subsequently refunded by the retailer to the customer, the retailer may
deduct, as a credit against the retailer's sales tax liability on the next return that the retailer is
required to file, the amount of sales tax properly refunded to the customer. In the event such
deduction exceeds the amount of sales tax due the state by the retailer in the next regular
return, such excess must be allowed as a credit against future sales tax due from the retailer. If
the credit, or any part of it, cannot be utilized by the retailer because of a discontinuance of a
business or for other valid reasons, the amount thereof may be refunded to the retailer.
57-39.2-28. Refunds for Canadian residents.
The tax imposed under this chapter on gross receipts from sales made to a person who is a
resident of Canada may be refunded under the following conditions:
1. The Canadian resident was in North Dakota for the express purpose of making a
purchase, and not as a tourist.
2. The goods will be removed from North Dakota within thirty days of purchase and will
be used permanently outside North Dakota.
3. The Canadian resident applies in writing to the commissioner on a form as the
commissioner may prescribe reciting sufficient facts establishing the exempt status of
the sale.
4. The qualifying sale is one in which the total gross receipts from each individual
transaction, which may involve one or more items, equals twenty-five dollars or more.
5. The refund is fifteen dollars or more. Qualifying sales may be accumulated for periods
not in excess of one calendar year in order to reach the fifteen dollar limit.
6. Notwithstanding section 57-39.2-23, the commissioner may provide names and
addresses of Canadian residents claiming a North Dakota sales tax refund to the
director of the department of commerce division of tourism.
57-39.2-29. Sourcing - Multiple points of use exemption.
Repealed by S.L. 2007, ch. 528, § 24.
57-39.2-30. Conditional sales contract.
For purposes of the tax imposed by this chapter, on any sale made under a conditional
sales contract or under other forms of sale in which the payment of the principal sum is
extended over a period longer than sixty days from the date of sale, only the portion of the sale
amount that has actually been received in cash by the retailer during each reporting period is
subject to the tax imposed by this chapter during that reporting period.
57-39.2-31. Seller and certified service provider limited immunity.
A seller or certified service provider is immune from civil liability for charging and collecting
the incorrect amount of sales or use tax in reliance on incorrect information provided by the tax
commissioner regarding tax rates, boundaries, or taxing jurisdiction assignments. The tax
commissioner will not be required to provide liability relief for errors resulting from the reliance
on an address-based system for assigning tax jurisdictions as provided under the agreement
adopted under chapter 57-39.4.
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57-39.2-32. Confidentiality of information obtained by certified service providers.
A certified service provider or any agent, employee, or other person acting under the
authority of a certified service provider may not divulge or make known in any manner
whatsoever the business affairs, operations, or information obtained by the certified service
provider in the discharge of its duties under this chapter.
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