Sales Tax Updates in North Dakota

Tax Professionals' Resource
January 6, 2013 — 1,245 views  
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North Dakota’s sales tax rate on retail sales of most tangible personal property will remain at 5% for 2013. There is no need to change the rate, upward at least, since North Dakota has shown record growth of taxable sales over the past year. 2012 third quarter sales tax collections were $6.735 billion, surpassing 2011’s collections by 22.4 percent.

This increase is a follow up to 2011, which also showed record growth in collections. Of 15 industries, 13 showed increases in sales tax receipts. There seems to be no need for a sales tax increase in the near future, provided the state economy continues to thrive. The rates for alcohol sales remain at 7 percent and farm machinery sales tax remains at 3 percent.

Local Rate Changes

Though the state rate remains the same, a number of localities have revised their local rates, many of them increases in the locality:

• City of Belfield has placed a 1 percent lodging tax on hold for one year;
• City of Wishek raised its sales rate .5 percent, to 1.5 percent;
• Steele has eliminated its tax refund cap;
• Mott changed the rate of its sales and use tax, up to 2 percent;
• Fargo has raised its rate to 2 percent, and has increased its tax refund maximum from $37.50 per sale to $50 per sale;
• Killdeer has created a 2 percent lodging tax;
• Wahpeton has added a restaurant tax to its lodging tax. The rate remains 1 percent;
• The City of Ray has created a 1 percent lodging tax and a 1.5 percent sales tax;
• The Towns of Willton and Finley have raised their sales tax rate to 2 percent. The refund cap is now $50 per sale;
• Tioga has increased both its lodging and sales tax rates to 2 percent, up from 1 percent;
• City of Buffalo raised its sales tax rate to 2 percent.

Retailer Compensation and New Return Forms

Beginning in January 2012, a Retailer is entitled to be compensated for preparation of sales tax returns. The Office of State Taxation revised the return forms in 2012 to account for the compensation. It does remind filers to use the most updated forms when filing. A verification of the correct form should be done if using the fillable, online forms.

The correct fillable form will show a calculation for compensation. Web-file users are automatically using the correct form. It is found here: http://www.nd.gov/tax/salesanduse/forms/2012formst.pdf?rand=pK2Wz

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