North Dakota: Sales Tax Handbook
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.
Contents1.) Taxability of Goods and Services
- General North Dakota taxability guidelines
- Are services subject to sales tax?
- Is shipping & handling subject to sales tax?
- Are drop shipped items taxable?
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.Top
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.Top
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.
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.
|Products on Amazon.com||TAXABLE *|
|Food and Meals|
|Leases and Rentals|
|Motor Vehicles||EXEMPT *|
|Tangible Media Property||TAXABLE|
|Manufacturing and Machinery|
|Utilities & Fuel||TAXABLE *|
|Medical Goods and Services|
|Newspapers and Magazines|
|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 *|
|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 *|
|General Trade-Ins||EXEMPT *|
|Vending Machine Sales|
* See notes in category taxability page for details
Back to North Dakota Sales Tax Handbook Top