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When am I responsible for the payment of use tax? North Dakota

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  • When am I responsible for the payment of use tax? North Dakota

    When purchasing tangible personal property through the mail, by catalog or over the internet for use, storage or consumption in the state of North Dakota, you are responsible for North Dakota use tax on the cost of the purchases. If the seller does not collect North Dakota use tax on the invoice, the purchaser is responsible to remit the use tax directly to the Tax Commissioner. Purchases picked up in another state and taxed in that state are taxable in North Dakota only if the tax paid is less than the tax due in North Dakota. The use tax due is the applicable North Dakota and local use tax less the tax properly paid to the other state.

    Examples of items subject to use tax purchased by individuals could include clothing, sporting goods, carpet, art, tobacco products, furniture, cameras or any other types of merchandise. Other items purchased by individuals subject to use tax could include exempt clothing purchased in Minnesota and returned to North Dakota, or purchases made in states with no sales tax like Montana, Oregon, Alaska, New Hampshire or Delaware.

    Examples of items subject to use tax purchased by businesses could include office supplies, uniforms, computer software upgrades, tools, equipment or cleaning supplies. Building materials purchased by a contractor and brought into North Dakota for installation are subject to use tax if another state’s sales or use tax has not been paid on the materials or if the tax paid was not equal or greater than the North Dakota rate.
    Businesses with an active sales tax permit must report purchases subject to use tax on the use tax line of the sales and use tax return in the period in which the goods are received. Individuals or businesses without a sales tax permit that have a use tax obligation should complete the use tax return to report their purchases and pay the tax due. The One-Time Sales and Use Tax Return is available on our website or may be obtained from our office.

    Out-of-State retail businesses that have sufficient physical presence in North Dakota, out-of-state businesses that voluntarily collect North Dakota tax or out-of-state contractors working in North Dakota must report their use tax collections on their regular sales and use tax return.
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