North Dakota Sales Tax

North Dakota Sales Tax Guide (2026)

5% at state level, with a local tax many cities cap per invoice, and a refund the buyer has to claim rather than receive at the till.[1]

5 min read • Reviewed by Tax Advisory Team • Verified • Sources: ND Tax Commissioner & N.D.C.C.
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Quick Facts

Sales Tax at a Glance

State rate
5% [1]
Local rate range
0%–3.75% [2]
Combined rate range
5%–8.75% [2]
Fargo rate
7.75% [2]
Bismarck rate
8% [2]
Economic nexus
$100k, no transaction test [3]
Groceries
Exempt [4]
Digital products
Exempt [5]
Compensation deduction
1.5%, capped at $110 [6]
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Local tax is capped per invoice, and the refund is the buyer’s to claim

Many North Dakota cities and counties write a maximum tax into their ordinance, limiting the local tax on one transaction. Retailers may collect the full amount or stop at the cap, but must be consistent.[7]

Applies per invoice unless stated otherwise City and county caps computed separately Retailer elects a method and sticks to it Buyer claims the excess from the state Three-year claim window The 5% state tax is never capped
The cap does not move when the rate does. A city that raises its rate without changing its published cap silently lowers the purchase price at which the cap starts to bite, so never hard-code a cap or assume it tracks the rate.[7]
Estimate

North Dakota sales tax calculator

North Dakota · state rate 5%
This does not apply any local maximum tax cap.
Rate applied–
Estimated sales tax–
Total with tax–

Estimate only. Local caps and rates change on quarter boundaries, so confirm both before invoicing a large purchase.[2] Talk to CrownGlobe about refund claims.

Rates & Registration

North Dakota Sales Tax Rates, Nexus & the gross receipts taxes

North Dakota rates by category

General retail sales5%
Alcoholic beverages7%
New farm machinery & irrigation equipment3%
New manufactured & mobile homes3%
Lodging under 30 days5%

The 7% and 3% figures are separate gross receipts taxes rather than variants of the sales tax, though they are reported on the same return.[1]

Who must register

Either trigger applies: economic nexus where gross sales delivered into North Dakota exceed $100,000 in the previous or current calendar year, with no transaction-count test, or any physical presence. Collection begins the following calendar year or 60 days after the threshold is met, whichever is earlier.[3]

The electronic-delivery line stops at software: digital music, films and books delivered electronically are exempt, but off-the-shelf software delivered electronically or by load and leave is taxable as tangible personal property.[5]

Compliance

Sales Tax Registration and Filing

Apply for a permit through the state’s taxpayer portal before making taxable sales.

How to register

  • Confirm nexus→
  • ND TAP application→
  • Permit issued→
  • Configure local caps→
  • File electronically

Permits are not transferable, so a buyer of an existing business must apply for a permit in its own name rather than continuing the seller’s.[8]

Filing & due dates

FrequencyAssigned whenDue
Monthly$333,000+ prior-year taxable activityLast day of next month
QuarterlyStandard assignmentLast day after quarter
Semiannual or annualSmallest filersLast day after period

Late returns cost 5% of the tax due or $5 for the first month, plus 5% for each further month up to 25%, with interest at 1% per month after the first.[9]

Pricing

Sales Tax & Nexus Pricing

Multi Tax Filing – $50 Per State/Month

ServiceWhat’s Included
Multi-state registrationNexus tracking, permit setup, and state agency coordination.
Monthly filingSales tax returns filed in every registered state.
Exemption & audit supportCertificate handling and notice response.
Get Started with Multi-State Filing
Taxability

Taxable vs. exempt

North Dakota taxes tangible goods and prewritten software, exempts groceries and electronically delivered digital media, and applies separate rates to alcohol and farm machinery.[1]

Generally taxable

  • Tangible retail goodsN.D.C.C. 57-39.2-02.1
  • Off-the-shelf software, however deliveredN.D.C.C. 57-39.2-01(25)
  • Prepared food & restaurant mealsCarve-out from the food exemption
  • Candy, soft drinks & dietary supplementsCarve-out from the food exemption
  • Clothing & footwearNo apparel exemption
  • Lodging under 30 daysPlus city lodging taxes

Generally exempt

  • Food & food ingredientsN.D.C.C. 57-39.2-04.1
  • Items delivered electronicallyN.D.C.C. 57-39.2-04(54)
  • Custom computer programsHowever transferred
  • Prescription drugsN.D.C.C. 57-39.2-04(7)
  • Sales to government & tribesN.D.C.C. 57-39.2-04(6)
  • Goods delivered out of stateInterstate commerce
Worth flagging: a downloaded film or e-book is exempt while an identically downloaded business application is fully taxable, along with its licence and program design charges. Custom programming is exempt only if separately itemised.[5]
Reference

Glossary of key terms

Maximum tax
A dollar ceiling in a local ordinance limiting the local tax that can apply to one transaction.
Local tax refund
The claim a purchaser files to recover local tax collected above a jurisdiction’s maximum tax, within three years.
Permit holder compensation
A retailer allowance; the state gives 1.5% of tax due capped at $110 per return, and some localities add their own.
Gross receipts tax
A separate levy at 7% on alcohol and 3% on new farm machinery, reported on the same return as sales tax.
Off-the-shelf software
North Dakota’s term for prewritten software, taxable whether delivered on media, electronically or by load and leave.
Not subject to local tax
A separate mechanism by which some jurisdictions exclude specific items from local tax entirely, distinct from the cap.
FAQ

Sales Tax FAQs

5% at state level. City and county taxes stack, taking combined rates as high as 8.75%. Bismarck is 8%, Fargo is 7.75% and Grand Forks is 7.25%.

A dollar ceiling many cities and counties place on the local tax applying to a single invoice. Retailers may collect the full local tax or stop at the cap, but must be consistent. Where the full amount is collected, the buyer claims the excess back from the state within three years.

No. The 5% state tax is never capped, so on a large invoice the state portion continues to accrue without limit while the local portion stops at the ceiling.

No. Items delivered electronically, including digital music, video and reading material, are exempt. Off-the-shelf software is the exception and is taxable however it is delivered.

Gross sales delivered into the state exceeding $100,000 in the previous or current calendar year. The 200-transaction test was repealed and no transaction count survives in the current statute.

No. Food and food ingredients are exempt. Prepared food, candy, soft drinks and dietary supplements are carved out and remain taxable at the full combined rate.

Verification

Sources & methodology

  1. ND Tax Commissioner – Sales & Use Tax
  2. ND Tax Commissioner – Local Taxes by Location
  3. ND Tax Commissioner – Sales & Use Tax History
  4. ND Tax Commissioner – Grocery Stores Guideline
  5. ND Tax Commissioner – Computers Guideline
  6. N.D. Admin. Code 81-04.1-01 – Sales & Use Tax
  7. ND Tax Commissioner – Local Maximum Tax Amounts
  8. ND Tax Commissioner – City & County Taxes
  9. ND Tax Commissioner – Tax Requirements Guideline
  10. N.D.C.C. Chapter 57-39.2 – Sales Tax
  11. ND Tax Commissioner – Marketplace Facilitator
  12. ND Tax Commissioner – Filing Deadlines
  13. ND Tax Commissioner – Restaurants Guideline
  14. ND Legislative Assembly – Senate Bill 2191 (2019)
Methodology: Every rate, cap and deadline is taken from the North Dakota Office of State Tax Commissioner’s guidelines or the Century Code directly. Local rates and caps change only on quarter boundaries and are rechecked each quarter.
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