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Are sales tax incentives available for businesses located in North Dakota? North Dakota

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  • Are sales tax incentives available for businesses located in North Dakota? North Dakota

    Sales tax law provides sales tax incentives for manufacturing or recycling equipment, agricultural processing equipment and plant construction materials, primary sector businesses (excluding manufacturers and recyclers) computer and telecommunications equipment, and wind-powered electrical generating facilities.

    Manufacturing, Recycling or Agricultural Processing Plant
    For manufacturing or recycling equipment or agricultural processing plant construction materials, this exemption only applies to new or expanding businesses located in North Dakota. To qualify for the exemption, the manufacturer must show that there is an increase in production volume, an increase in production types or employment of additional employees. Replacement equipment does not qualify for an exemption unless it creates an expansion.

    Computer and Telecommunications Equipment
    Sales and use tax incentives are available for computer and telecommunications equipment if the business has been designated as a primary sector business by the North Dakota Department of Commerce, Division of Economic Development and Finance. To qualify for the exemption, the business must be a new or expanding primary sector business (excluding manufacturers and recyclers) and must meet the qualifications stated above. The incentive is not extended to the purchase of replacement equipment, unless it creates an expansion.

    Wind-powered Electrical Generating Facilities
    Wind-powered electrical generating facilities may be granted a sales and use tax exemption for purchasing building materials, production equipment and other tangible personal property used in the construction of wind-powered electrical generating facilities. To qualify, the facility must have at least one single electrical energy generation unit with a nameplate capacity of one hundred kilowatts or more, and construction must be completed before January 1, 2011.

    Exemption Requests
    Requests for sales tax exemptions must be made in writing to the Tax Commissioner and must include a description and cost of the equipment along with an explanation of how the equipment will enable the business to expand its operations. When a decision has been made, the Tax Commissioner will notify the taxpayer in writing if the project qualifies for an exemption.

    For more information on business sales and use tax incentives and how to apply for the exemption, please refer to the North Dakota Tax Incentives for Business brochure.
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