North Dakota imposes various requirements on sellers doing business in the state. We recommend that you go through the items below to help you with the most frequently asked questions concerning sellers and sales and use tax issues.
Procedure for accepting resale certificates. In North Dakota, exemption certificates must include the following information:
- the name and address of the purchaser
- your name as the seller to whom the certificate is
given
- a reason for the exemption
- an authorized signature
- the purchaser's license or registration number
- the date
- and the good faith of the purchaser
Procedure for accepting blanket certificates. As a seller you may accept a blanket certificate if your customer repeatedly purchases the same type of property or service for processing or resale. The purchaser must provide you with a signed certificate of resale at least once a year.
Sales and use tax liability for out-of-state mail order and catalogue retailers. North Dakota has a statute that specifically taxes out-of-state mail order and catalogue sellers. However, you will be responsible for paying this tax only if you have physical presence within North Dakota. To determine if you have physical presence, ask yourself the following:
- Do I have retail facilities, a warehouse, or any
office space in North Dakota? Maintaining retail or warehouse facilities will
give you physical presence. Also, having an office for employees, even for
business activities unrelated to mail order sales, will give you physical
presence.
- Do my employees or I enter North Dakota for purposes
of taking and transmitting orders from North Dakota? If your employee or
independent contractor goes into North Dakota to take or transmit orders, your
business may have physical presence in North Dakota. However, contracting with
a common carrier to deliver mail order goods does not constitute physical
presence.
- Do my delivery vehicles frequently enter North Dakota for purposes of delivering property? Frequent deliveries in North Dakota by your trucks will give you physical presence in North Dakota.
Sales tax rates. The state imposes a 5.0 percent sales tax. Because local jurisdictions may also impose a sales tax, the tax rate can be as high as 7 percent. Rate cards for 5.0 percent through 7.0 percent are available from the state. Here is a geographical chart for computing local rates .
Absorbing the tax - using a "no sales tax" advertising strategy to drum up business. In North Dakota, it is against the law to refund or offer to refund all or any part of the amount collected, or to absorb the amount of sales tax required to be added to the sales price and collected from the purchaser. As a seller, it is also against the law for you to advertise directly or indirectly that you will absorb the sales tax that is required to be added to the sales price.
Claiming refund for excess tax payments. If goods are returned to you and the purchase price is returned to your customer, you may claim a credit on a subsequent sales and use tax return for the amount of the sale claimed on a prior return. You may also file a refund claim with the Tax Commissioner. The refund claim must be within three years from when the erroneous payment was made.