North Dakota: Sales Tax Handbook
What is included in North Dakota's sales tax basis?
Many times, an otherwise-taxable transaction will include bundled fees like excise taxes, installation fees, or finance charges or be modified with coupons, installment payment plans, etc. One question that will often arise is whether or not a certain payment or fee is included in a transaction's taxable basis.
The taxable basis refers to the portion of an entire transaction that is subject to North Dakota's sales tax. This page answers common questions about which common fees are included in the sales tax basis in North Dakota, and which are excluded.
- Are coupons and discounts included in the sales tax basis?
- Are excise taxes included in the included in the sales tax basis?
- How are installment-based sales taxed?
- Are installation fees included in the sales tax basis?
- Are finance charges included in the sales tax basis?
- Can I get a refund on sales taxes paid on returned or repossessed items?
- Can I get a refund on sales taxes paid on bad debts?
Inclusion in Sales Tax Basis
Are coupons and cash discounts included in the North Dakota sales tax basis?
What are not included are discounts and retailers coupons. Manufacturers coupons and manufacturers rebates are included only if the seller receives consideration from the manufacturer and other criteria is met.Top
Are excise taxes included in the North Dakota sales tax basis?
Excise taxes are separate levies added by many states to the price of commodity items such as alcohol, gasoline, etc. What is included are federal manufacturers excise taxes, with the exception of separately stated charges in a direct manufacturer to consumer sale.Top
How are installment-based sales taxed?
Many businesses offer customers payment plans that allow them to pay the full price for a product over time in installments, often leading to confusion about when and how much sales tax is collected and remitted to North Dakota. The state has implemented the following provisions regarding installment sales:
Payments reported as received
Are installation charges included in the North Dakota sales tax basis?
While the taxation of tangible goods is relatively straightforward, some states consider the installation costs associated with a tangible object (like carpeting, a home or vehicle fixture, etc) to be taxable. North Dakota policy states:
Installation charges are generally included in the taxable price of a tangible product.
Note: Must be separately stated
Are finance charges included in the North Dakota sales tax basis?
Many businesses offer customers financing on higher-value products, and include financing charges in the overall cost of the item. These finance charges may also be subject to sales taxes. North Dakota policy states:
Finance charges are generally included in the taxable price of a tangible product.
Note: Must be separately stated
How can I get reimbursed for sales taxes paid on items that are returned or repossessed?
If a taxable good for which sales tax has been collected is returned or reposessed by the merchant, the state may allow the amount of sales tax collected to be either deducted from the merchant's current sales tax balance or refunded to the merchant by the state. North Dakota's policies state that returns and repossessions are:
A credit is allowed, if the purchase price including tax is refunded to the purchaser
Note: A credit is allowed for tax paid on the unpaid balance of repossessed property
How can I get reimbursed for sales taxes paid on bad debts?
If a merchant offers goods to a consumer on credit and the payment for those goods becomes delinquent, the merchant may be eligible to be reimbursed any sales tax they paid to the state on the consumer's behalf when the transaction was made. The method of reimbursement varies state by state.
Tax paid on bad debts can generally be recovered by the merchant as a deduction.
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