North Dakota: Sales Tax Handbook
What constitutes sales tax nexus in North Dakota?
One of the more complicated aspects of North Dakota sales tax law is sales tax nexus, the determination of whether a particular sale took place within the taxation jurisdiction of North Dakota, and is thus subject to state (and possibly local) sales taxes.
If a vendor's transactions are determined to have nexus in North Dakota, the vendor must register for a North Dakota sales tax license and collect appropriate sales taxes from the buyer for all transactions with nexus in the state. On this page, we have compiled some of the most commonly needed facts about what constitutes sales tax nexus in North Dakota.
Sales Tax Nexus in North Dakota
According to the law of North Dakota, all retailers who have tax nexus can be defined in several different ways.
If your business has an office or any other place of business in North Dakota(temporarily or permanently), leasing or renting personal property within the state's boundaries, any employee, agent, independent contractor, or any other representative within the state's boundaries, you have tax nexus in North Dakota.
For additional details on sales tax nexus law in North Dakota, see the nexus information page from the Office of State Tax Commissioner at https://www.nd.gov/tax/salesanduse/pubs/guide/gl-21928.pdf?20150806151840
Taxation of Internet-Based Sales in North Dakota
NOTE: 2018 Supreme Court Ruling Regarding Online Sales Taxes
In the 2018 Supreme Court case South Dakota vs. Wayfair Inc, Et Al., the court overturned a previous ruling that required a merchant to have physical nexus in order for a state to collect sales tax. This means that any state is now free to enforce collection of sales taxes on out-of-state online merchants. The information provided here may be subject to change, and many states are expected to begin collecting online sales taxes following this ruling.
Depending on the situation, North Dakota may or may not charge sales tax on Internet-based transactions. North Dakota's statute does indicate that it is possible for tax nexus to exist. However, in the case Quill Corp. v. North Dakota, the U.S. Supreme Court declared that due to the Commerce Clause, a seller must have a physical presence in the state for the state to legally require the seller to collect sales tax
The nexus status and taxability of Internet-based sales, by vendors and/or consumers within North Dakota, have been the subject of hot debate in recent years. You can learn more on our introduction to Internet-based sales taxes.
Does my business have tax nexus in North Dakota?
The folks at the sales tax compliance company Avalara are an approved North Dakota sales tax partner, and you can use their free North Dakota nexus wizard tool to determine whether or not your business has nexus, and is therefore required to pay North Dakota sales taxes. If you're interested in automating your sales tax collection and filing process, click here to get more information.
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