North Dakota: The Peace Garden State

North Dakota is located in the north of the United States on the Canadian border. The state is bordered by Canada to the north by Montana to the west, South Dakota to the south and Minnesota to the east. The 750,000 inhabitants of the Peace Garden State live on an area of ​​180,000 km². According to ehuacom, its capital is Bismarck.

The state offers business incentives such as generous tax breaks, accessibility to government, and a capable workforce. This combination, combined with North Dakota’s position as one of the states with the lowest operating costs, is driving leading companies to locate in the Peace Garden State.

The state has already invested millions of dollars in state-of-the-art research facilities in cooperation with private companies. Life sciences and the biomedical industry, for example, have benefited greatly from this.

However, energy remains the state’s largest industry and continues to offer significant growth opportunities. North Dakota is also a recognized location in the field of aviation and a leader in the field of unmanned aerial systems (UAS). The state has the experience, resources and leadership to drive the growth of the industry.

North Dakota Location Map

STATE INVESTMENT PROGRAM STARTS PROMPTLY

The Invest in North Dakota program is scheduled to start on August 1st. Part of the Legacy Fund’s profits are invested in local companies. Initially, $100 million will be available for private equity investments. Over the next five years, $250 million will be added to this sum. However, the total volume for the project is 800 million dollars, which are to be invested in North Dakota’s companies, so “Invest in North Dakota” is designed for the long term. The program aims to ensure that more businesses and people benefit from the state’s oil wealth and create new economic opportunities in the state.

A website will provide information about the North Dakota Growth Fund and offer companies the opportunity to submit investment proposals. There will be guidelines for the distribution of funds, which will also contain requirements for the diversification of investments. The investments must be spread across several venture capital firms and direct investments based in North Dakota. A company outside of the Peace Garden State was selected to review the investment proposals.

Once the program is operational, the State Investment Board and 50 South Capital will review the fund’s performance twice a year and produce annual reports. It aims to detail the fund’s investment performance and impact on North Dakota businesses and the state’s economy.

INTERNATIONAL INVESTMENTS

226 international companies have offices in North Dakota and contribute to economic growth in the Peace Garden State. Companies from Canada, Japan and South Korea are particularly active. The expansion of international companies has already created employment for over 14,000 people in North Dakota. A good 40 percent of these are in the manufacturing sector. Of the international employers, Canada, Great Britain and Japan are responsible for most of the jobs. Despite the large number of employees in the manufacturing industry, investments cannot be limited to individual branches or sectors, but are widely diversified.

NORTH DAKOTA INCOME TAX

North Dakota charges an income tax of 1.1 – 2.9% depending on income. In addition, federal income taxes are payable.

CORPORATE INCOME TAX IN NORTH DAKOTA

North Dakota has a corporate income tax rate of 4.31%. In addition, federal corporation tax is payable.

NORTH DAKOTA SALES TAX

There is no sales tax or Value Added Tax (VAT) in the USA based on the European model. Instead, in the United States, states, counties, and municipalities levy a local sales tax on the sale of products (but not services).

Sales Tax Rate in North Dakota

The sales tax in North Dakota is 5% at the state level. Municipalities or districts charge an average of 1.94% sales tax. Combined, an average of 6.94% is due.

North Dakota Nexus Laws & Sales Tax

Learn more about the Economic Nexus Laws in the context of Sales Tax here.

Effective Date

October 01, 2018

Transactions included:

Gross taxable US state sales of tangible personal property and other property, including taxable services; Sales made through a marketplace are not included in the threshold

Treatment of tax-exempt transactions:

Exempt sales and services are not included in the threshold

Reason:

Before January 1, 2019: Sales or transactions

As of January 1, 2019: Sale only

Sales/Transactions Threshold:

Before January 1, 2019: $100,000 or 200 transactions

From January 1, 2019: only $100,000

Evaluation period:

The threshold applies to the previous or current calendar year

Extra information:

  • Registration Requirements : North Dakota requires remote businesses to register to collect and remit North Dakota sales tax earlier in the following calendar year or 60 days after crossing the Economic Nexus Threshold.
  • Frequently asked questions about remote sellers
  • SB 2191
  • SB 2298

North Dakota Marketplace Sellers & Sales Tax

Learn more about Marketplace seller registration requirements

Effective date by the marketplace broker:

October 1, 2019

Economic Nexus Threshold:

More than $100,000 in North Dakota taxable sales in the current or previous calendar year. Remote sellers should exclude sales made through a marketplace when calculating the threshold unless the marketplace collects on their behalf. Marketplace intermediaries include all taxable sales made through the marketplace when calculating the threshold.

Registration requirements:

  • Remote Multichannel Sellers: You must register with the North Dakota Office of State Tax Commissioner and collect North Dakota sales tax on sales not taxed by a Marketplace Agent once you have crossed the Economic Nexus Threshold.
  • Remote Marketplace Sellers: You do not need to register if you only sell through one or other bulk marketplaces, even if you cross the Economic Nexus Threshold. Contact the North Dakota Office of State Tax Commissioner for more information.
  • In-State Multichannel Sellers: You must register with the Office of State Tax Commissioner and collect tax on sales that are not taxed by a marketplace intermediary.
  • State Marketplace Sellers: You must register. Contact the North Dakota Office of State Tax Commissioner for more information.