North Dakota Sales Tax on Services, Installation, etc North Dakota: Sales Tax Handbook

North Dakota:

What purchases are taxable in North Dakota?

The taxability of various transactions (like services and shipping) can vary from state to state, as do policies on subjects such as whether excise taxes or installation fees included in the purchase price are also subject sales tax. This reference is here to help answer your questions about what is and is not subject to the North Dakota sales tax.

Section 1: Taxability of Goods and Services

What transactions are generally subject to sales tax in North Dakota?

In the state of North Dakota, sales tax is legally required to be collected from all tangible, physical products being sold to a consumer. Some examples of items that exempt from North Dakota sales tax are prescription medications, some types of groceries, some medical devices, and machinery and chemicals which are used in agriculture.

This means that an individual in the state of North Dakota who sells school supplies and books would be required to charge sales tax, but an individual who owns a store which sells groceries is not required to charge sales tax on all of its products.


Are services subject to sales tax in North Dakota?

In the state of North Dakota, many services are considered to be taxable. For example, transportation services, repair services, hospital and nursing home services, and furnishing services are considered to be taxable, and thus you would most likely have to pay sales tax on the service.

You can find a table describing the taxability of common types of services later on this page.

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Are shipping & handling subject to sales tax in North Dakota?

In the state of North Dakota, the laws regarding tax on shipping and handling costs are relatively simple. Essentially, the vast majority of items shipped in North Dakota have shipping costs which are taxed. If both exempt and non-taxable items are being shipped together, the percentage of the shipping charge that relates to the taxable items must be taxed.

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Are drop shipments subject to sales tax in North Dakota?

"Drop shipping" refers to the common business practice in which a vendor, often in a different state, makes a sale of a product which is shipped to the end-user by a third party supplier hired by the initial vendor. In North Dakota, drop shipments are generally subject to state sales taxes.

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Section 2: Taxability of Various Items in North Dakota

This table shows the taxability of various goods and services in North Dakota. If you are interested in the sales tax on vehicle sales, see the car sales tax page instead. Scroll to view the full table, and click any category for more details.

Category Exemption Status
Amazon Purchases
Products on Amazon.com TAXABLE
Clothing
General Clothing TAXABLE
Food and Meals
Catering TAXABLE *
Grocery Food EXEMPT
Leases and Rentals
Motor Vehicles EXEMPT *
Tangible Media Property TAXABLE
Manufacturing and Machinery
Machinery TAXABLE *
Raw Materials EXEMPT
Utilities & Fuel TAXABLE *
Medical Goods and Services
Medical Devices EXEMPT
Medical Services EXEMPT
Medicines TAXABLE
Newspapers and Magazines
Newspapers EXEMPT
Periodicals TAXABLE *
Occasional Sales
General Occasional Sales EXEMPT *
Motor Vehicles EXEMPT *
Optional Maintenance Contracts
General Optional Maintenance Contracts EXEMPT *
Parts Purchased for Use in Performing Service Under Optional Maintenance Contracts TAXABLE
Pollution Control Equipment
General Pollution Control Equipment TAXABLE *
Services
Janitorial Services EXEMPT
Transportation Services EXEMPT *
Software and Digital Products
Canned Software - Delivered on Tangible Media TAXABLE
Canned Software - Downloaded TAXABLE
Custom Software - Delivered on Tangible Media EXEMPT *
Custom Software - Downloaded EXEMPT
Customization of Canned Software TAXABLE *
Digital Products EXEMPT
Trade-Ins
General Trade-Ins EXEMPT *
Vending Machine Sales
Food TAXABLE *
Merchandise TAXABLE *

* See notes in category taxability page for details



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Source: http://www.salestaxhandbook.com/north-dakota/sales-tax-taxability