# Title 57 — Taxation

## Chapter 57-39.2 — Sales Tax

### § 57-39.2-01. Definitions.

The following words, terms, and phrases, when used in this chapter, have the meaning
ascribed to them in this section, unless the context clearly indicates a different meaning:
1. "Bundled transaction" means the retail sale of two or more products, except real
property and services to real property, where the products are otherwise distinct and
identifiable, and the products are sold for one nonitemized price. A bundled transaction
does not include the sale of any products in which the sales price varies, or is
negotiable, based on the selection by the purchaser of the products included in the
transaction.
a. Distinct and identifiable products do not include:
(1) Packaging such as containers, boxes, sacks, bags, and bottles or other
materials such as wrapping, labels, tags, and instruction guides that
accompany the retail sale of the products and are incidental or immaterial to
the retail sale. Examples of packaging that are incidental or immaterial
include grocery sacks, shoeboxes, drycleaning garment bags, and express
delivery envelopes and boxes.
(2) A product provided free of charge with the required purchase of another
product. A product is provided free of charge if the sales price of the product
purchased does not vary depending on the inclusion of the product provided
free of charge.
(3) Items included in the definition of gross receipts.
b. The phrase "one nonitemized price" does not include a price that is separately
identified by product on binding sales or other supporting sales-related
documentation made available to the customer in paper or electronic form,
including an invoice, bill of sale, receipt, contract, service agreement, lease
agreement, periodic notice of rates and services, rate card, or price list.
c. A transaction that otherwise meets the definition of a bundled transaction as
defined in this section is not a "bundled transaction" if it is:
(1) The retail sale of tangible personal property and a service where the
tangible personal property is essential to the use of the service, and is
provided exclusively in connection with the service, and the true object of
the transaction is the service;
(2) The retail sale of services where one service is provided that is essential to
the use or receipt of a second service and the first service is provided
exclusively in connection with the second service and the true object of the
transaction is the second service;
(3) A transaction that includes taxable products and nontaxable products and
the purchase price or sales price of the taxable products is de minimis.
(a) "De minimis" means the seller's purchase price or sales price of the
taxable products is ten percent or less of the total purchase price or
sales price of the bundled products.
(b) Sellers shall use either the purchase price or the sales price of the
products to determine if the taxable products are de minimis. Sellers
may not use a combination of the purchase price and sales price of
the products to determine if the taxable products are de minimis.
(c) Sellers shall use the full term of a service contract to determine if the
taxable products are de minimis; or
(4) The retail sale of exempt tangible personal property and taxable tangible
personal property where:
(a) The transaction includes food and food ingredients, drugs, durable
medical equipment, mobility-enhancing equipment, over-the-counter
drugs, prosthetic devices, or medical supplies; and

(b) If the seller's purchase price or sales price of the taxable tangible
personal property is fifty percent or less of the total purchase price or
sales price of the bundled tangible personal property. Sellers may not
use a combination of the purchase price and sales price of the
tangible personal property when making the fifty percent determination
for a transaction.
2. "Business" includes any activity engaged in by any person or caused to be engaged in
by the person with the object of gain, benefit, or advantage, either direct or indirect.
3. "Certified automated system" means software certified under chapter 57-39.4 to
calculate the tax imposed by each jurisdiction on a transaction, determine the amount
of tax to remit to the state, and maintain a record of the transaction.
4. "Certified service provider" means an agent certified under the agreement adopted
under chapter 57-39.4 to perform all of the seller's sales and use tax functions, other
than the seller's obligation to remit taxes on its own purchases.
5. "Commissioner" means the tax commissioner of the state of North Dakota.
6. "Computer software maintenance contract" is a contract that obligates a vendor of
computer software to provide a customer with future updates or upgrades to computer
software, support services with respect to computer software, or both.
7. "Delivery charges" means charges by the seller for preparation and delivery to a
location designated by the purchaser of personal property or services. For purposes of
this subsection, "preparation and delivery" includes transportation, shipping, postage,
handling, crating, and packing. If shipment includes exempt property and taxable
property, the seller should allocate the delivery charge by using a percentage based
on:
a. The total sales price of the taxable property compared to the total sales price of
all property in the shipment; or
b. The total weight of the taxable property compared to the total weight of all
property in the shipment.
The seller must tax the percentage of the delivery charge allocated to the taxable
property but does not have to tax the percentage allocated to the exempt property.
8. "Direct mail" means printed material delivered or distributed by United States mail or
other delivery service to a mass audience or to addresses on a mailing list provided by
the purchaser or at the direction of the purchaser when the cost of the items are not
billed directly to the recipients. "Direct mail" includes tangible personal property
supplied directly or indirectly by the purchaser to the direct mail seller for inclusion in
the package containing the printed material. "Direct mail" does not include multiple
items of printed material delivered to a single address.
9. "Drug" means a compound, substance, or preparation and any component of a
compound, substance, or preparation, other than food and food ingredients, dietary
supplements, or alcoholic beverages:
a. Recognized in the official United States pharmacopoeia, official homeopathic
pharmacopoeia of the United States, or official national formulary, or any
supplement of any of these publications;
b. Intended for use in the diagnosis, cure, mitigation, treatment, or prevention of
disease; or
c. Intended to affect the structure or any function of the body.
10. "Farm machinery" means all vehicular implements and attachment units, designed and
sold for direct use in planting, cultivating, or harvesting farm products or used in
connection with the production of agricultural produce or products, livestock, or poultry
on farms, which are operated, drawn, or propelled by motor or animal power. "Farm
machinery" does not include vehicular implements operated wholly by hand or a motor
vehicle required to be registered under chapter 57-40.3. "Farm machinery" does not
include machinery that may be used for other than agricultural purposes, including
tires, farm machinery repair parts, tools, shop equipment, grain bins, feed bunks,
fencing materials, and other farm supplies and equipment. For purposes of this
subsection, "attachment unit" means any part or combination of parts having an

independent function, other than farm machinery repair parts, which when attached or
affixed to farm machinery is used exclusively for agricultural purposes.
11. "Farm machinery repair parts" means repair or replacement parts for farm machinery
that have a specific or generic part number assigned by the manufacturer of the farm
machinery. "Farm machinery repair parts" do not include tires, fluid, gas, grease,
lubricant, wax, or paint.
12. a. "Gross receipts" means the measure subject to sales tax and means the total
amount of consideration, including cash, credit, property, and services, for which
personal property or services are sold, leased, or rented, valued in money,
whether received in money or otherwise, without any deduction for the following:
(1) The seller's cost of the property sold;
(2) The cost of materials used, labor or service costs, interest, losses, all costs
of transportation to the seller, all taxes imposed on the seller, and any other
expense of the seller;
(3) Charges by the seller for any services necessary to complete the sale, other
than delivery and installation charges;
(4) Delivery charges; and
(5) Credit for any trade-in, as determined by state law.
b. "Gross receipts" also includes consideration received by the seller from third
parties if:
(1) The seller actually receives consideration from a party other than the
purchaser and the consideration is directly related to a price reduction or
discount on the sale;
(2) The seller has an obligation to pass the price reduction or discount through
to the purchaser;
(3) The amount of the consideration attributable to the sale is fixed and
determinable by the seller at the time of the sale of the item to the
purchaser; and
(4) One of the following criteria is met:
(a) The purchaser presents a coupon, certificate, or other documentation
to the seller to claim a price reduction or discount where the coupon,
certificate, or documentation is authorized, distributed, or granted by a
third party with the understanding that the third party will reimburse
any seller to whom the coupon, certificate, or documentation is
presented;
(b) The purchaser provides identification to the seller to show that the
purchaser is a member of a group or organization entitled to a price
reduction or discount, however, a "preferred customer" card that is
available to any patron does not constitute membership in such a
group; or
(c) The price reduction or discount is identified as a third-party price
reduction or discount on the invoice received by the purchaser or on a
coupon, certificate, or other documentation presented by the
purchaser.
c. "Gross receipts" also includes the total amount of sales of every clerk, auctioneer,
agent, or factor selling tangible personal property owned by any other retailer.
d. "Gross receipts" does not include:
(1) Discounts, including cash, term, or coupons that are not reimbursed by a
third party, which are allowed by a seller and taken by a purchaser on a
sale;
(2) Interest, financing, and carrying charges from credit extended on the sale of
personal property or services, if the amount is separately stated on the
invoice, bill of sale, or similar document given to the purchaser;
(3) Any taxes legally imposed directly on the consumer that are separately
stated on the invoice, bill of sale, or similar documents given to the
purchaser;

(4) The sale price of property returned by a customer when the full sale price is
refunded either in cash or credit. When tangible personal property is taken
in trade or in a series of trades as a credit or part payment of a retail sale
taxable under this chapter, if the tangible personal property traded in will be
subject to tax imposed by chapter 57-39.5 or 57-40.3 or if the tangible
personal property traded in is used farm machinery or used irrigation
equipment, the credit or trade-in value allowed by the retailer is not included
in gross receipts of the retailer; and
(5) The amount of compensation received from an insurance company for the
loss of a stolen or totally destroyed watercraft that has been previously
taxed under this chapter or chapter 57-40.2, if that compensation is used as
a trade-in on the purchase of a replacement watercraft. The trade-in credit is
not included in the gross receipts of the retailer.
(a) If a watercraft is purchased by an owner who has had a watercraft
stolen or totally destroyed, a trade-in credit must be allowed against
one or more replacement watercraft purchases in a cumulative
amount not to exceed the total amount of compensation from the
insurance company for the loss.
(b) The purchaser of a replacement watercraft shall provide the seller with
an original notarized statement from the insurance company verifying
the original watercraft was a total loss and indicating the date and
amount of compensation.
(c) If the full amount of trade-in credit under this section has not been
used, the seller shall record on the face of the notarized statement the
necessary information to identify partial use of the credit, retain a copy
of the notarized statement to verify the credit allowed, and return the
original notarized statement to the purchaser. If the full amount of the
credit has been used, the seller shall retain the original notarized
statement to verify the amount of trade-in credit allowed.
(d) Trade-in credit for a watercraft stolen or totally destroyed may be
applied to purchases of replacement watercraft made within three
years from the date of compensation by the insurance company.
13. "Irrigation equipment repair parts" means repair or replacement parts for irrigation
equipment which have a specific or generic part number assigned by the manufacturer
of the irrigation equipment. The term does not include tires, fluid, gas, grease,
lubricant, wax, or paint.
14. "Lease or rental" means any transfer of possession or control of tangible personal
property for a fixed or indeterminate term for consideration. A lease or rental may
include future options to purchase or extend. "Lease or rental" does not include:
a. A transfer of possession or control of property under a security agreement or
deferred payment plan, which requires the transfer upon completion of the
required payments;
b. A transfer of possession or control of property under an agreement that requires
the transfer of title upon completion of required payments and payment of an
option price that does not exceed the greater of one hundred dollars or one
percent of the total required payments; or
c. Providing tangible personal property with an operator for a fixed or indeterminate
period of time. A condition of this exclusion is that the operator is necessary for
the equipment to perform as designed. For the purpose of this subdivision, an
operator must do more than maintain, inspect, or set up the tangible personal
property.
This definition will be applied only prospectively from the date of adoption and will
have no retroactive impact on existing leases or rentals.
15. "Local governmental unit" means incorporated cities, counties, school districts, and
townships.

16. "Mandatory computer software maintenance contract" is a computer software
maintenance contract that the customer is obligated by contract to purchase as a
condition to the retail sale of computer software.
17. "Optional computer software maintenance contract" is a computer software
maintenance contract that the customer is not obligated to purchase as a condition to
the retail sale of computer software.
18. "Person" includes any individual, firm, partnership, joint venture, association,
corporation, limited liability company, estate, business trust, receiver, or any other
group or combination acting as a unit and the plural as well as the singular number.
19. "Prescription" means an order, formula, or recipe issued in any form of oral, written,
electronic, or other means of transmission by a person authorized by the laws of this
state to prescribe drugs.
20. "Relief agency" means the state, any county, city and county, city or district thereof, or
an agency engaged in actual relief work.
21. "Retail sale" or "sale at retail" means any sale, lease, or rental for any purpose other
than for resale, sublease, or subrental. "Retail sale" or "sale at retail" includes the sale,
including the leasing or renting, to a consumer or to any person for any purpose, other
than for processing or for resale, of tangible personal property; the sale of steam, gas,
and communication service, excluding internet access service, to retail consumers or
users; the sale of vulcanizing, recapping, and retreading services for tires; the
ordering, selecting, or aiding a customer to select any goods, wares, or merchandise
from any price list or catalog, which the customer might order, or be ordered for such
customer to be shipped directly to such customer; the sale or furnishing of hotel,
motel, or other accommodations, tickets, or admissions to any place of amusement,
athletic event, or place of entertainment; and the sales of magazines and other
periodicals. By the term "processing" is meant any tangible personal property,
including containers which it is intended, by means of fabrication, compounding,
manufacturing, producing, or germination shall become an integral or an ingredient or
component part of other tangible personal property intended to be sold ultimately at
retail. The sale of an item of tangible personal property for the purpose of incorporating
it in or attaching it to real property must be considered as a sale of tangible personal
property for a purpose other than for processing; the delivery of possession within the
state of North Dakota of tangible personal property by a wholesaler or distributor to an
out-of-state retailer who does not hold a North Dakota retail sales tax permit or to a
person who by contract incorporates such tangible personal property into, or attaches
it to, real property situated in another state may not be considered a taxable sale if
such delivery of possession would not be treated as a taxable sale in that state. As
used in this subsection, the word "consumer" includes any hospital, infirmary,
sanatorium, nursing home, home for the aged, or similar institution that furnishes
services to any patient or occupant. The sale of an item of tangible personal property
to a person under a finance leasing agreement over the term of which the property will
be substantially consumed must be considered a retail sale if the purchaser elects to
treat it as such by paying or causing the transferor to pay the sales tax thereon to the
commissioner on or before the last day on which payments may be made without
penalty as provided in section 57-39.2-12.
22. "Retailer" or "seller" includes every person engaged in the business of leasing or
renting hotel, motel, or other accommodations, and every person engaged in the
business of selling tangible goods, wares, or merchandise at retail, or furnishing of
steam, gas, and communication services, excluding internet access service, or tickets
or admissions to places of amusement, entertainment, and athletic events, or
magazines or other periodicals; and includes any person as herein defined who by
contract or otherwise agrees to furnish for a consideration a totally or partially finished
product consisting in whole or in part of tangible personal property subject to the sales
tax herein provided, and all items of tangible personal property entering into the
performance of such contract as a component part of the product agreed to be
furnished under said contract shall be subject to the sales tax herein provided and the

sales tax thereon shall be collected by the contractor from the person for whom the
contract has been performed in addition to the contract price agreed upon, and shall
be remitted to the state in the manner provided in this chapter; and shall include the
state or any municipality furnishing steam, gas, or communication service to members
of the public in its proprietary capacity. For the purpose of this chapter, retailer shall
also include every clerk, auctioneer, agent, or factor selling tangible personal property
owned by any other retailer.
23. "Sale" means any transfer of title or possession, exchange or barter, conditional or
otherwise, in any manner or by any means whatever, for a consideration, and includes
the furnishing or service of steam, gas, or communication, excluding internet access
service, the furnishing of hotel, motel, or other accommodations, the furnishing of
tickets or admissions to any place of amusement, athletic event, or place of
entertainment, and sales of magazines and other periodicals. Provided, the words
"magazines and other periodicals" as used in this subsection do not include
newspapers nor magazines or periodicals that are furnished free by a nonprofit
corporation or organization to its members or because of payment by its members of
membership fees or dues.
24. "Sales tax" means the tax levied under section 57-39.2-02.1 or a conforming tax
imposed under home rule authority by a city or county.
25. "Tangible personal property" means personal property that can be seen, weighed,
measured, felt, or touched or that is in any other manner perceptible to the senses.
"Tangible personal property" includes electricity, water, gas, steam, and prewritten
computer software.
### § 57-39.2-02. Sales tax imposed.

Repealed by I.M. approved November 2, 1976, S.L. 1977, ch. 593, § 6.
### § 57-39.2-02.1. Sales tax imposed.

1. Except as otherwise expressly provided in this chapter, there is imposed a tax of five
percent upon the gross receipts of retailers from all sales at retail, including the leasing
or renting of tangible personal property as provided in this section, within this state of
the following to consumers or users:
a. Tangible personal property, consisting of goods, wares, or merchandise, and
bundled transactions consisting entirely of tangible personal property.
b. The furnishing or service of communication services, excluding internet access
service but including one-way and two-way telecommunications services or
steam other than steam used for processing agricultural products.
c. Tickets or admissions to places of amusement or entertainment or athletic events,
including amounts charged for participation in an amusement, entertainment, or
athletic activity.
d. Magazines and other periodicals.
e. The leasing or renting of a hotel or motel room or other accommodations.
f. The leasing or renting of tangible personal property the transfer of title to which
has not been subjected to a retail sales tax under this chapter or a use tax under
chapter 57-40.2.
g. Sale, lease, or rental of a computer and prewritten computer software, including
prewritten computer software delivered electronically or by load and leave. For
purposes of this subdivision:
(1) "Computer" means an electronic device that accepts information in digital or
similar form and manipulates it for a result based on a sequence of
instructions.
(2) "Computer software" means a set of coded instructions designed to cause a
computer or automatic data processing equipment to perform a task.
(3) "Delivered electronically" means delivered from the seller to the purchaser
by means other than tangible storage media.

(4) "Electronic" means relating to technology having electrical, digital, magnetic,
wireless, optical, electromagnetic, or similar capabilities.
(5) "Load and leave" means delivery to the purchaser by use of a tangible
storage media when the tangible storage media is not physically transferred
to the purchaser.
(6) "Prewritten computer software" means computer software, including
prewritten upgrades, which is not designed and developed by the author or
other creator to the specifications of a specific purchaser. The combining of
two or more "prewritten computer software" programs or prewritten portions
thereof does not cause the combination to be other than "prewritten
computer software". "Prewritten computer software" includes software
designed and developed by the author or other creator to the specifications
of a specific purchaser when it is sold to a person other than the purchaser.
If a person modifies or enhances "computer software" of which the person is
not the author or creator, the person is deemed to be the author or creator
only of such person's modifications or enhancements. "Prewritten computer
software" or a prewritten portion thereof that is modified or enhanced to any
degree, if such modification or enhancement is designed and developed to
the specifications of a specific purchaser, remains "prewritten computer
software". However, if there is a reasonable, separately stated charge or an
invoice or other statement of the price given to the purchaser for such
modification or enhancement, such modification or enhancement shall not
constitute "prewritten computer software".
h. A mandatory computer software maintenance contract for prewritten computer
software.
i. An optional computer software maintenance contract for prewritten computer
software that provides only software upgrades or updates or an optional
computer software maintenance contract for prewritten computer software that is
a bundled transaction and provides software upgrades or updates and support
services.
2. For purposes of manufactured homes, as defined in section 41-09-02, there is
imposed a tax of three percent upon the:
a. Gross receipts of retailers from all sales at retail of manufactured homes used for
residential or business purposes, except as provided in subsection 35 of section
57-39.2-04; or
b. Dealer's cost to purchase the manufactured home if the manufactured home is
sold in conjunction with installation in this state, and tax has not previously been
paid under subdivision a.
Installation of a manufactured home includes any method established under section
54-21.3-08.
### § 57-39.2-02.2. Certain sellers located outside this state required to collect and remit

sales taxes - Criteria.
Notwithstanding any other provision of law, any seller of tangible personal property or other
taxable product for delivery in this state, which does not have a physical presence in this state,
is subject to this chapter and chapter 57-40.2 and shall remit sales or use tax if the seller's
gross sales from the sale of tangible personal property and other taxable items delivered in this
state exceed one hundred thousand dollars in the previous calendar year, or the current
calendar year. A seller that exceeds this sales threshold shall obtain a permit under section
57-39.2-14, and begin collecting the tax on sales delivered during the following calendar year or
beginning sixty days after the threshold is met, whichever is earlier. The seller shall follow all
applicable procedures and requirements of law as if the seller has a physical presence in this
state.
### § 57-39.2-02.3. Marketplace facilitator tax collection requirement.

1. For the purposes of this section:

a. "Exemption certificate" means documentation furnished by a buyer to a seller to
claim an exemption from sales tax or use tax. The term includes a resale
certificate or other documentation authorized in section 57-39.2-10 furnished by a
buyer to a seller.
b. "Marketplace" means a physical or electronic place where one or more
marketplace sellers sell or offer for sale tangible personal property or other
products or services subject to tax under section 57-39.2-02.1, regardless of
whether the marketplace seller has a physical presence in this state. A physical or
electronic place includes a store, booth, internet website, catalog, television, radio
broadcast, or a dedicated sales software application.
c. (1) "Marketplace facilitator" means a person that:
(a) Contracts with sellers to facilitate for consideration, regardless of
whether deducted as fees from the transaction, the sale of the seller's
products through a physical or electronic marketplace operated by the
person;
(b) Engages directly or indirectly, through one or more affiliated persons,
in any of the following:
[1] Transmitting or otherwise communicating the offer or acceptance
between the buyer and seller;
[2] Owning or operating the infrastructure, electronic or physical, or
technology that brings buyers and sellers together;
[3] Providing a virtual currency that buyers are allowed or required to
use to purchase products from the seller; or
[4] Software development or research and development activities
related to any of the activities described in subparagraph a, if
such activities are directly related to a physical presence or
electronic marketplace operated by the person or an affiliated
person; and
(c) Engages in any of the following activities with respect to the seller's
products:
[1] Payment processing services;
[2] Fulfillment or storage services;
[3] Listing products for sale;
[4] Setting prices;
[5] Branding sales as those of the marketplace facilitator;
[6] Order taking;
[7] Advertising or promotion; or
[8] Providing customer service or accepting or assisting with returns
or exchanges.
(2) The term does not include a payment processor business appointed by a
merchant to handle payment transactions from various channels, such as
credit cards and debit cards, and whose sole activity with respect to
marketplace sales is to handle transactions between two parties.
d. "Marketplace seller" means a retailer that sells or offers for sale tangible personal
property or other products or services subject to tax under section 57-39.2-02.1,
through a marketplace that is owned, operated, or controlled by a marketplace
facilitator.
2. Notwithstanding any other provision of law, any marketplace facilitator facilitating sales
of tangible personal property or other products or services subject to tax under section
57-39.2-02.1, which does not have a physical presence in this state, is a retailer
subject to chapters 57-39.2 and 57-40.2 and shall remit sales or use tax if the
marketplace facilitator facilitates or makes sales through the marketplace that, when
the sales are combined, meet the threshold amount in section 57-39.2-02.2. A
marketplace facilitator exceeding the sales threshold shall obtain a permit under
section 57-39.2-14, and begin collecting the tax on sales during the following calendar
year or beginning sixty days after the threshold is met, whichever is earlier.

3. A marketplace facilitator shall be considered the retailer of each sale the facilitator
facilitates on its forum for a marketplace seller. Each marketplace facilitator shall:
a. Be required to collect and remit for each sale any tax imposed under chapters
57-39.2 and 57-40.2.
b. Be responsible for all obligations imposed under chapter 57-39.2 as if the
marketplace facilitator was the retailer of the sale.
c. In accordance with the provisions of section 57-39.2-10, keep such records and
information as may be required by the tax commissioner to ensure proper
collection and remittance of tax.
d. Certify to its marketplace sellers that it will collect and remit state and local sales
and use tax on sales of tangible personal property or other products or services
subject to tax under section 57-39.2-02.1 made through the marketplace. A
marketplace seller that accepts a marketplace facilitator's collection certificate in
good faith may exclude sales made through the marketplace from the
marketplace seller's return of gross receipts under section 57-39.2-11.
e. Be subject to audit by the tax commissioner with respect to all retail sales for
which it is required to collect and pay the tax imposed under chapters 57-39.2
and 57-40.2. If the tax commissioner audits the marketplace facilitator, the tax
commissioner is prohibited from auditing the marketplace seller for the same
retail sales unless the marketplace facilitator seeks relief under subsection 4.
4. A marketplace facilitator is not liable under this section for failure to collect and remit
sales and use tax if the marketplace facilitator demonstrates to the satisfaction of the
department that:
a. The marketplace facilitator has a system in place to require the seller to provide
accurate information and has made a reasonable effort to obtain accurate
information from the seller about a retail transaction;
b. The failure to collect and remit the correct tax was due to reliance upon incorrect
or insufficient information provided to the marketplace facilitator by the seller. If
the marketplace facilitator is relieved of liability under this subsection, the seller
and the purchaser are liable for any amount of uncollected, unpaid, or unremitted
tax; and
c. The marketplace facilitator and marketplace seller are not affiliated. A
marketplace facilitator and a marketplace seller are affiliated if:
(1) Either owns more than five percent of the other; or
(2) Both are subject to the control of a common entity that owns more than five
percent of each.
5. Notwithstanding any other provision of law, the tax imposed under this section may be
refunded under the following conditions:
a. A person qualifying for an exemption under subsection 5, 6, 24, 32, 43, 48, or 52
of section 57-39.2-04 may apply in writing to the tax commissioner on a form and
in the manner as the tax commissioner may prescribe reciting sufficient facts
establishing the exempt status of the sale.
b. The refund is five dollars or more. Qualifying sales may be accumulated for
periods not in excess of one calendar year in order to reach the five dollar limit.
6. A class action may not be brought against a marketplace facilitator on behalf of
purchasers arising from or in any way related to an overpayment of sales or use tax
collected by the marketplace facilitator, regardless of whether such action is
characterized as a tax refund claim.
7. No marketplace facilitator is required to collect or remit sales or use tax under this
section on any sale made before October 1, 2019.
### § 57-39.2-03. Separate and additional tax on retail sales.

Repealed by I.M. approved November 2, 1976, S.L. 1977, ch. 593, § 6.
### § 57-39.2-03.1. Separate and additional tax on retail sales.

Repealed by I.M. approved November 2, 1976, S.L. 1977, ch. 593, § 6.

### § 57-39.2-03.2. Sales tax on alcoholic beverages and tobacco products.

Expired under S.L. 2003, ch. 539, § 25; S.L. 2005, ch. 582, § 2.
### § 57-39.2-03.3. Sales tax on sales through vending machines.

Gross receipts from the sale of tangible personal property costing sixteen cents or more
sold through a coin-operated vending machine are subject to the sales tax imposed by chapter
57-39.2, and gross receipts from the sale of tangible personal property costing fifteen cents or
less sold through a coin-operated vending machine are specifically exempted from the
provisions of this chapter.
### § 57-39.2-03.4. Sales tax on carpet and drapes.

Repealed by S.L. 1995, ch. 571, § 1.
### § 57-39.2-03.5. Reduced rate for manufacturing machinery and equipment.

Repealed by S.L. 1991, ch. 680, § 2.
### § 57-39.2-03.6. Sales tax rate on natural gas sales.

Repealed by S.L. 2007, ch. 529, § 7.
### § 57-39.2-03.7. Surcharge on rental motor vehicles.

A company engaged in the business of renting motor vehicles for periods of fewer than
thirty days shall collect a three percent surcharge on each rental contract at the time a vehicle of
a gross vehicle weight of ten thousand pounds [4535.92 kilograms] or less is rented from the
company in this state. A vehicle is considered rented in this state if possession is obtained by
the renter in this state. The surcharge must be computed on the total dollar amount for the
rental as stated in the rental contract, excluding taxes, fuel collections, or other ancillary
products sold to customers such as collision damage waiver, supplemental liability protection,
personal accident insurance, and personal effects coverage.
1. A surcharge under this section must be noted in the rental contract and collected in
accordance with the terms of the contract.
2. On February fifteenth of each year, a company that collects surcharges under this
section shall file a report with the commissioner stating the total amount of excise
taxes paid under chapter 57-40.3 on the rental vehicles for the preceding calendar
year and the total amount of rental motor vehicle revenues earned on rentals in this
state for the preceding calendar year. All surcharge revenues collected during the
calendar year by the company in excess of the total amount of excise taxes paid under
chapter 57-40.3 during the calendar year by the company on rental motor vehicles
must be remitted to the commissioner with the report and considered sales tax
collections under this chapter.
3. For three years after filing the report under this section, the company shall retain
copies of rental contracts and the commissioner may require the company to furnish
copies of rental contracts for purposes of ensuring compliance with this section.
### § 57-39.2-03.8. Separate and additional sales tax on lodging.

Repealed by S.L. 2005, ch. 580, § 19.
### § 57-39.2-03.9. Sales tax on tobacco products.

Notwithstanding any other provision of law, the sales taxes imposed by this chapter apply to
the gross receipts of retailers from all sales at retail of cigarettes, cigars, and other tobacco
products. For purposes of this section, "gross receipts" from the sale of cigarettes, cigars, and
other tobacco products includes any other taxes imposed on such merchandise or its use or on
the retail or other sale of such merchandise.

### § 57-39.2-03.10. Bundled telecommunications services including exempt services.

In the case of a bundled transaction of services that includes telecommunications services,
if the price is attributable to services that are taxable and services that are nontaxable, the
portion of the price attributable to the nontaxable services is subject to tax under this chapter
and chapter 57-40.2 unless the provider can reasonably identify the nontaxable portion of the
services from its books and records kept in the regular course of business.
### § 57-39.2-04. Exemptions.

There are specifically exempted from the provisions of this chapter and from computation of
the amount of tax imposed by it the following:
1. Gross receipts from sales of tangible personal property which this state is prohibited
from taxing under the Constitution or laws of the United States or under the
Constitution of North Dakota.
2. Gross receipts from the sales, furnishing, or service of passenger transportation
service and gross receipts from the sales, furnishing, or service of freight
transportation service when provided by a common carrier.
3. Repealed by S.L. 1971, ch. 567, § 1.
4. a. Gross receipts from sales of tickets, or admissions to state, county, district, and
local fairs.
b. Gross receipts from educational, religious, or charitable activities when the entire
amount of net receipts is expended for educational, religious, or charitable
purposes. The exemption in this subdivision does not apply to:
(1) Gross receipts from taxable sales in excess of ten thousand dollars for an
event not otherwise exempt under subdivision c, d, or e if the activities are
held in a publicly owned facility for which fair market rent has not been paid;
or
(2) Gross receipts from activities if the seller competes with retailers by
maintaining inventory, conducting retail sales on a regular basis from a
permanent or seasonal location, or soliciting sales from a website prepared
for or maintained by the seller.
c. Gross receipts derived by an institution of higher education located in this state
from tickets or admissions to athletic, musical, dramatic, or scholastic events
held, sponsored, hosted, or controlled by the institution of higher education, in
which the primary performers or participants consist of students of an institution
of higher education.
d. Gross receipts derived by any public school district if such receipts are expended
in accordance with section 15.1-07-10 or 15.1-07-11.
e. Gross receipts of a nonprofit music or dramatic arts organization that is exempt
from federal income taxation and is organized and operated for the presentation
of live public performances of musical or theatrical works on a regular basis.
5. Gross receipts from sales of textbooks to regularly enrolled students of a private or
public school and from sales of textbooks, yearbooks, and school supplies purchased
by a private nonprofit elementary school, secondary school, or any other nonprofit
institution of higher learning conducting courses of study similar to those conducted by
public schools in this state.
6. Gross receipts from all sales otherwise taxable under this chapter made to the United
States, an Indian tribe, or to any state, including the state of North Dakota, or any of
the subdivisions, departments, agencies, or institutions of any state. A political
subdivision of another state is exempt under this subsection only if a sale to a North
Dakota political subdivision is treated as an exempt sale in that state. The
governmental units exempted by this subsection must be issued a certificate of
exemption by the commissioner and the certificate must be presented to each retailer
whenever this exemption is claimed. For purposes of this subsection, an Indian tribe
means a tribal government agency, instrumentality, or political subdivision that
performs essential government functions and does not include business entities or
agencies the primary purpose of which is to operate a business enterprise.

7. Gross receipts from the sale of drugs sold under a doctor's prescription.
8. Gross receipts from sales of adjuvants, agrichemical tank cleaners and foam markers,
commercial fertilizers, fungicides, seed treatments, inoculants and fumigants,
herbicides, and insecticides to agricultural or commercial vegetable producers and
commercial applicators; chemicals used to preserve agricultural crops being stored;
and seeds, roots, bulbs, and small plants to commercial users or consumers for
planting or transplanting for commercial vegetable gardens or agricultural purposes.
9. Gross receipts from sales of oxygen sold to any person who purchases it upon the
written order of a doctor for the person's own use for medical purposes.
10. Gross receipts from the sale of motor vehicles, farm machinery, alcoholic beverages,
gasoline, insurance premiums, gaming tickets, or any other article or product, except
as otherwise provided, upon which the state of North Dakota imposes a special tax.
11. Gross receipts from the sale of feed which is fed to poultry or livestock, including
breeding stock and wool-bearing stock, for the purpose of producing eggs, milk, meat,
fibers, or other products for human consumption and the gross receipts from the sale
of feed purchased for the purpose of being fed to draft or fur-bearing animals. The
word "feed" as used herein shall be construed to mean and include only salt, grains,
hays, tankage, oyster shells, mineral supplements, limestone, molasses, beet pulp,
meat and bone scraps, meal, drugs to be used as part of a feed ration, and other
generally recognized animal feeds. The term "feed" includes drugs used as part of a
feed ration, medicants, disinfectants, wormers, tonics, and like items.
12. Gross receipts from a sale otherwise taxable under this chapter made to a person from
an adjoining state which does not impose or levy a retail sales tax, under the following
conditions:
a. The person is in the state of North Dakota for the express purpose of making a
purchase.
b. The person furnishes to the North Dakota retailer a certificate signed by the
person in a form as the commissioner may prescribe reciting sufficient facts
establishing the exempt status of the sale. Unless the certificate is furnished it
must be presumed, until the contrary is shown, that the person was not in the
state of North Dakota for the express purpose of making a purchase.
c. The sale is fifty dollars or more.
13. Gross receipts from the sale of any motor vehicle taxable under the provisions of the
motor vehicle excise tax laws of North Dakota. However, gross receipts from the rental
of any motor vehicle for fewer than thirty days are not exempt but taxes imposed under
home rule authority do not apply to such rentals.
14. Repealed by S.L. 1969, ch. 528, § 24.
15. Gross receipts from sales in which a contractor furnishes to the retailer a certificate
which includes the contractor's license number assigned to the contractor under the
provisions of chapter 43-07. Such certificate shall be in the form prescribed by the
commissioner and shall be furnished by the contractor to the retailer each calendar
year prior to the making of any purchases during such calendar year from the retailer
without liability for paying the tax to the retailer. Any contractor furnishing such
certificate must report and remit the tax to the commissioner on purchases taxable
under this chapter made by the contractor in the same manner as retailers remit such
tax under this chapter.
16. Gross receipts from the sale of newsprint and ink used in the publication of a
newspaper.
17. Gross receipts from the sale of all services furnished by any hospital, infirmary,
sanatorium, nursing home, basic care facility, or similar institution to any patient or
occupant.
18. Repealed by S.L. 1973, ch. 480, § 6.
19. Repealed by S.L. 1971, ch. 555, § 3.
20. Gross receipts from the sale of food supplies to any public school, to any parochial or
private nonprofit school conducting courses of study similar to those conducted by
public schools in this state, or to any nonprofit organization, for use by the public,

parochial, or private school or nonprofit organization in sponsoring or conducting a
lunch program or programs in and for any such public, parochial, or private nonprofit
school.
21. Gross receipts from the leasing or renting of motion picture film to motion picture
exhibitors for exhibition if the sale of tickets or admissions to the exhibition of the film is
subject to the sales tax imposed by this chapter.
22. Gross receipts from the leasing or renting of manufactured homes, modular living
units, or sectional homes, whether or not placed on a permanent foundation, for
residential housing for periods of thirty or more consecutive days and the gross
receipts from the leasing or renting of a hotel or motel room or other accommodations
occupied by the same person or persons for residential housing for periods of thirty or
more consecutive days.
23. Food purchased by a student under a boarding contract with a college, university,
fraternity, or sorority.
24. Gross receipts from all sales when made to an eligible facility or emergency medical
services provider for the use or benefit of its patient or occupant. For the purposes of
this subsection:
a. "Eligible facility" means any hospital, skilled nursing facility, intermediate care
facility, residential end-of-life facility, basic care facility, or any assisted living
facility licensed by the department of health and human services; and
b. "Emergency medical services provider" means an emergency medical services
operation licensed by the department of health and human services under
chapter 23-27.
25. Gross receipts from the sale of Bibles, hymnals, textbooks, and prayerbooks sold to
nonprofit religious organizations.
26. Gross receipts from sales of prosthetic devices, durable medical equipment,
mobility-enhancing equipment, or supplies for ostomy care or bladder dysfunction. For
purposes of this subsection:
a. "Durable medical equipment" means equipment, not including mobility-enhancing
equipment, for home use, including repair and replacement parts for such
equipment, which:
(1) Can withstand repeated use;
(2) Is primarily and customarily used to serve a medical purpose;
(3) Generally is not useful to a person in the absence of illness or injury; and
(4) Is not worn in or on the body.
"Durable medical equipment" includes equipment and devices designed or
intended for ostomy care and management and equipment and devices used
exclusively for a person with bladder dysfunction. An exemption certificate is not
required to obtain exemption. Repair and replacement parts as used in this
definition include all components or attachments used in conjunction with the
durable medical equipment. Repair and replacement parts do not include items
which are for single patient use only.
b. "Mobility-enhancing equipment" means equipment, not including durable medical
equipment sold under a doctor's written prescription, including repair and
replacement parts for mobility-enhancing equipment, which:
(1) Is primarily and customarily used to provide or increase the ability to move
from one place to another and which is appropriate for use either at home or
in a motor vehicle;
(2) Is not generally used by persons with normal mobility; and
(3) Does not include any motor vehicle or equipment on a motor vehicle
normally provided by a motor vehicle manufacturer.
"Mobility-enhancing equipment" includes crutches and wheelchairs for the use of
disabled persons, equipment, including manual control units, van lifts, van door
opening units, and raised roofs for attaching to or modifying a motor vehicle for
use by a permanently physically disabled person, equipment, including elevators,
dumbwaiters, chair lifts, and bedroom or bathroom lifts, whether or not sold for

attaching to real property, for use by a permanently physically disabled person in
that person's principal dwelling, and equipment, including manual control units,
for attaching to or modifying motorized implements of husbandry for use by a
permanently physically disabled person.
c. "Prosthetic device" means a replacement, corrective, or supportive device sold
under a doctor's written prescription, including repair and replacement parts for
such a device, worn on or in the body to:
(1) Artificially replace a missing portion of the body;
(2) Prevent or correct a physical deformity or malfunction; or
(3) Support a weak or deformed portion of the body.
"Prosthetic device" includes artificial devices individually designed, constructed,
or altered solely for the use of a particular disabled person so as to become a
brace, support, supplement, correction, or substitute for the bodily structure,
including the extremities of the individual, artificial limbs, artificial eyes, hearing
aids, and other equipment worn as a correction or substitute for any functioning
portion of the body, artificial teeth sold by a dentist, and eyeglasses when
especially designed or prescribed by an ophthalmologist, physician, oculist, or
optometrist for the personal use of the owner or purchaser.
d. "Supplies for ostomy care or bladder dysfunction" includes:
(1) Supplies designed or intended for ostomy care and management, including
collection devices, colostomy irrigation equipment and supplies, skin
barriers or skin protectors, and other supplies especially designed for use of
ostomates.
(2) Supplies to be used exclusively by a person with bladder dysfunction,
including catheters, collection devices, incontinent pads and pants, adult
diapers, and other items used for the care and management of bladder
dysfunction. For the purposes of this paragraph:
(a) "Adult diapers" means diapers other than children's diapers.
(b) "Children's diapers" means diapers marketed to be worn by children.
(c) "Diaper" means an absorbent garment worn by humans who are
incapable of, or have difficulty, controlling their bladder or bowel
movements.
27. Gross receipts from the sale of electricity.
28. Gross receipts from the leasing or renting of any tangible personal property upon
which a North Dakota sales tax or use tax has been paid or is payable and the retailer
has separately indicated on an invoice, contract, lease agreement, or other supporting
sale document that the retailer paid sales or use tax on the retailer's purchase of the
tangible personal property.
29. Gross receipts from all sales otherwise taxable under this chapter when made to any
nonprofit organization for meals, including the containers, packages, and materials
used for wrapping food items, for delivery to persons who are confined to their homes
by illness or incapacity, including senior citizens and disabled persons, for
consumption by such shut-ins in their homes.
30. Gross receipts from all sales of recreational travel trailers not exceeding eight feet
[2.44 meters] in width or thirty-two feet [9.75 meters] in length which are designed to
be principally used as temporary vacation dwellings when made to persons who are
residents of other states which impose excise taxes upon registration of such
recreational travel trailers.
31. Gross receipts from the sale of money, including all legal tender coins and currency,
and from the sale of precious metal bullion that has been refined to a purity of not less
than nine hundred ninety-nine parts per one thousand and is in such form or condition
that its value depends upon its precious metal content and not its form.
32. Gross receipts from sales to nonprofit voluntary health associations which are exempt
from federal income tax under section 501(c)(3) of the United States Internal Revenue
Code [26 U.S.C. 501(c)(3)]. As used in this subsection, a voluntary health association
is an organization recognized by the internal revenue service, the national health

council, the state tax commissioner, and the North Dakota secretary of state as a
nonprofit organization that is exempt under section 501(c)(3) of the United States
Internal Revenue Code and meets the following requirements: It has been organized
and operated exclusively in providing services for the purposes of preventing and
alleviating human illness and injury. Methods used to obtain these goals would include
education, research, community service, and direct patient services, income being
derived solely from private donations with some exceptions of a minimal membership
fee. Its members are not limited to only individuals, who themselves are licensed or
otherwise legally authorized to render the same professional services as the
organization. The disbursement of funds within a volunteer health association is to be
controlled by a board of directors who work voluntarily and without pay.
33. Repealed by S.L. 2005, ch. 580, § 19.
34. Gross receipts from the sale of byproducts, arising from the processing of agricultural
products, for use in the manufacture or generation of steam or electricity.
35. Gross receipts from the sale of a manufactured home that has been sold, bargained,
exchanged, given away, or transferred by the person who first acquired it from a
retailer in a sale at retail and upon which the North Dakota sales tax has previously
been imposed.
36. Gross receipts from all sales of insulin in all its forms dispensed pursuant to the
direction of a licensed physician, all sales of glucose usable for treatment of insulin
reactions, all sales of urine and blood testing kits and materials, and all sales of insulin
measuring and injecting devices, including insulin syringes and hypodermic needles.
37. Gross receipts from the sale of any aircraft taxable under the provisions of chapter
57-40.5.
38. Gross receipts from all sales of air carrier transportation property subject to ad valorem
property taxation pursuant to the provisions of chapters 57-06, 57-07, 57-08, 57-13,
and 57-32.
39. Gross receipts from sales of tangible personal property consisting of flight simulators
or mechanical or electronic equipment for use in association with a flight simulator.
40. Gross receipts from sales of tickets or admissions to, or sales made at, an annual
church supper or bazaar held in a publicly owned facility. For purposes of this
subsection, "annual" means occurring not more than once in any calendar year.
41. Gross receipts from the initial sale of beneficiated coal.
42. Gross receipts from electronic gaming devices licensed by the attorney general under
chapter 53-06.1.
43. Gross receipts from all sales made to a nonprofit medical research institute. For
purposes of this subsection, "nonprofit medical research institute" means an institute
that is a member of the association of independent research institutes, which is not a
private foundation, and which is recognized by the internal revenue service as having
exempt status under 26 U.S.C. 501(c)(3).
44. Gross receipts from all sales of coal that is exempt from the coal severance tax.
45. Gross receipts from the sale or lease of farm machinery, farm machinery repair parts,
irrigation equipment, or irrigation equipment repair parts used exclusively for
agricultural purposes.
46. Gross receipts from sales of tangible personal property purchased by a charitable
organization to be awarded as a prize in a raffle conducted in accordance with law if
the winner of the tangible personal property will be subject to sales or use taxes upon
receiving the property.
47. Gross receipts from the sale of lottery tickets under chapter 53-12.1.
48. Gross receipts from all sales of tangible personal property purchased by a commerce
authority and made a part of the infrastructure of a commerce authority, otherwise
taxable under this chapter, if the personal property is placed within the geographic
boundaries of the political subdivisions that created the commerce authority and is
necessary and directly services infrastructure needs of the commerce authority. The
commissioner shall issue a certificate of exemption to a political subdivision exempted

by this subsection, and the political subdivision shall present the certificate of
exemption to each retailer whenever the exemption is claimed.
49. Gross receipts from sales of carbon dioxide used for enhanced recovery of oil or
natural gas or secure geologic storage.
50. Gross receipts from the sale at retail of hydrogen to power an internal combustion
engine or fuel cell and equipment used directly and exclusively in production and
storage of the hydrogen by a hydrogen generation facility in this state. For purposes of
this subsection, "storage" means stationary and portable hydrogen containers or
pressure vessels, piping, tubing, fittings, gaskets, controls, valves, gauges, pressure
regulators, safety relief devices, and other accessories intended for hydrogen storage
containers or pressure vessels.
51. Gross receipts from the sale of equipment to a facility, licensed under section
57-43.2-05, to enable the facility to sell diesel fuel containing at least two percent
biodiesel or green diesel fuel as defined under section 57-43.2-01 by volume.
52. Gross receipts from sales within the boundaries of any reservation in this state to an
individual who resides within the boundaries of any reservation in this state and who is
an enrolled member of a federally recognized Indian tribe.
53. Gross receipts from sales of natural gas or sales of fuels used for heating purposes.
54. Gross receipts from the sale of items delivered electronically, including specified digital
products. For purposes of this subsection:
a. "Specified digital products" means:
(1) "Digital audio-visual works" which means a series of related images which,
when shown in succession, impart an impression of motion, together with
accompanying sounds, if any;
(2) "Digital audio works" which means works that result from the fixation of a
series of musical, spoken, or other sounds, including ringtones; and
(3) "Digital books" which means works that are generally recognized in the
ordinary and usual sense as books.
b. For purposes of the definition of "specified digital products", "transferred
electronically" means obtained by the purchaser by means other than tangible
storage media.
c. For purposes of the definition of "digital audio work", "ringtones" means digitized
sound files that are downloaded onto a device and which may be used to alert the
customer with respect to a communication.
d. "Specified digital products" may not be construed to include prewritten computer
software as that term is defined in subdivision g of subsection 1 of section
57-39.2-02.1.
55. Gross receipts from memberships, admissions, and entrance fees to activities and
events organized and operated by nonprofit social and recreation clubs organized
under section 501(c)(7) of the Internal Revenue Code [26 U.S.C. 501(c)(7)] and
operated solely by nonsalaried officers and staff.
56. Gross receipts from the sale of any potash or byproducts taxable under chapter 57-65.
57. Gross receipts from coin-operated amusement or entertainment machines.
58. (Contingent effective date - See note) Gross receipts from sales of liquefied natural
gas used for agricultural, industrial, or railroad purposes as defined in section
57-43.2-01.
59. Gross receipts from all sales of commemorative memorial coins under section
37-18-15.
60. a. Gross receipts from sales to a senior citizen organization that provides
informational, health, welfare, counseling, and referral services for senior citizens
in this state if the senior citizen organization:
(1) Is recognized by the internal revenue service as having exempt status under
26 U.S.C.501(c)(3);
(2) Is recognized by the secretary of state as a charitable organization; and
(3) Either:

(a) Provides services through the aging services division of the
department of health and human services;
(b) Receives grant funds through the department of transportation which
are used for enhanced mobility of seniors and individuals with
disabilities; or
(c) Provides services through a contract with the department of health
and human services as a program of all-inclusive care for the elderly.
b. The department of health and human services and the department of
transportation shall notify the tax commissioner if a senior citizen organization no
longer meets the criteria in paragraph 3 of subdivision a.
61. Gross receipts from sales of children's diapers as defined in subdivision d of
subsection 26 of section 57-39.2-04.
62. Gross receipts from sales when made to a fire department for the purpose of providing
fire protection services. For purposes of this subsection, "fire department" means a fire
department or fire district that has filed a certificate of existence under section
### § 57-39.2-04.1. Sales tax exemption for food and food ingredients.

Gross receipts from sales for human consumption of food and food ingredients are exempt
from taxes imposed under this chapter. Gross receipts from sales for human consumption of
food and food products given, or to be given, as samples to consumers for consumption on the
premises of a food store are exempt from the sales tax imposed by this chapter. For purposes of
this section, "food and food ingredients" means substances, whether in liquid, concentrated,
solid, frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and
are consumed for taste or nutritional value.
1. For purposes of this section, "food" and "food ingredients" do not include:
a. Alcoholic beverages.
b. Candy or chewing gum.
c. Dietary supplements.
d. Prepared food.
e. Soft drinks containing fifty percent or less fruit juice.
f. Tobacco.
2. For purposes of this section:
a. "Alcoholic beverages" means beverages that are suitable for human consumption
and contain one-half of one percent or more of alcohol by volume.
b. "Candy" means a preparation of sugar, honey, or other natural or artificial
sweeteners in combination with chocolate, fruits, nuts, or other ingredients or
flavoring in the form of bars, drops, or pieces. Candy does not include any
preparation containing flour and does not require refrigeration.
c. "Dietary supplement" means any product, other than tobacco, intended to
supplement the diet which contains one or more of the following dietary
ingredients: a vitamin; a mineral; an herb or other botanical; an amino acid; a
dietary substance for use by humans to supplement the diet by increasing the
total dietary intake; an oral concentrate, metabolite, constitute, extract, or
combination of any dietary ingredients described in this sentence and which is
intended for ingestion in tablet, capsule, powder, soft gel, gel cap, or liquid form,
or if not represented for use as a sole item of a meal or of a diet; and is required
to be labeled as a dietary supplement, identifiable by the supplemental facts box
found on the label and as required pursuant to 21 CFR section 101.36.
d. "Prepared food" means:
(1) Food sold in a heated state or heated by the seller;
(2) Two or more food ingredients mixed or combined by the seller for sale as a
single item; or
(3) Food sold with eating utensils provided by the seller, including plates,
knives, forks, spoons, glasses, cups, napkins, or straws. A plate does not
include a container or packaging used to transport the food.

e. "Prepared food" does not mean:
(1) Food that is only cut, repackaged, or pasteurized by the seller.
(2) Eggs, fish, meat, poultry, and foods containing these raw animal foods
requiring cooking by the consumer as recommended by the food and drug
administration in chapter 3, part 401.11, of its food code so as to prevent
foodborne illness.
(3) If sold without eating utensils provided by the seller:
(a) Food sold by a seller whose proper primary North American industry
classification system classification is manufacturing in sector 311,
except subsector 3118, bakeries.
(b) Food sold in an unheated state by weight or volume as a single item.
(c) Bakery items, including bread, rolls, buns, biscuits, bagels, croissants,
pastries, donuts, Danish, cakes, tortes, pies, tarts, muffins, bars,
cookies, and tortillas.
(d) Food sold that ordinarily requires additional cooking, as opposed to
just reheating, by the consumer prior to consumption.
f. "Soft drinks" means nonalcoholic beverages that contain natural or artificial
sweeteners. "Soft drinks" does not include beverages that contain milk or milk
products, soy, rice, or similar milk substitutes, or greater than fifty percent of
vegetable or fruit juice by volume.
g. "Tobacco" means cigarettes, cigars, chewing or pipe tobacco, or any other item
that contains tobacco.
3. For purposes of this section, "eating utensils provided by the seller" is determined as
follows:
a. Determine the prepared food ratio, where the numerator is the sum of food
defined in paragraphs 1 and 2 of subdivision d of subsection 2 plus food when
plates, bowls, glasses, or cups are necessary for the purchaser to receive the
food and the denominator is all sales of food and food ingredients, including
prepared food, candy, dietary supplements, and soft drinks. Alcoholic beverages
are not included in either the numerator or denominator.
b. If the prepared food ratio is seventy-five percent or less, utensils are provided by
the seller if the seller's practice is to physically give or hand them to the
purchaser, except plates, bowls, glasses, or cups necessary for the purchaser to
receive the food need only be made available.
c. If the prepared food ratio is greater than seventy-five percent, utensils are
provided by the seller if they are made available to the purchaser. When sellers
with a food ratio greater than seventy-five percent sell items that contain four or
more servings packaged as one item and sold for a single price, the item does
not become prepared food unless the seller's practice is to physically give or
hand the purchaser utensils as in subdivision b. Serving size is determined by the
label of the item sold. If no label is available, the seller will reasonably determine
the number of servings.
d. When a seller sells food items that have a utensil placed in a package by a
person other than the seller and that person's North American industry
classification system classification code is that of manufacturers (sector 311), the
seller shall not be considered to have provided the utensils except as in
subdivisions b and c. For any other packager with any other North American
industry classification system classification code, the seller shall be considered to
have provided the utensil.
e. The prepared food ratio is to be calculated by the seller for each calendar or fiscal
year not later than ninety days after the end of each year and based on the
seller's data from the previous year.
f. A single prepared food ratio will be determined annually and used for all of the
seller's locations in the state.

g. A new business shall make a good-faith estimate of the prepared food ratio for
the first year and shall adjust its good-faith estimate after the first three months if
the actual prepared food ratio is materially different than the estimate.
### § 57-39.2-04.2. Sales tax exemption for power plant construction, production,

environmental upgrade, and repowering equipment and oil refinery or gas processing
plant environmental upgrade equipment.
1. As used in this section, unless the context otherwise requires:
a. (1) "Environmental upgrade" means an investment greater than twenty-five
million dollars or one hundred thousand dollars per megawatt of installed
nameplate capacity, whichever is less, in machinery, equipment, and related
facilities for reducing emissions or increasing efficiency at an existing power
plant.
(2) "Environmental upgrade" for purposes of a process unit means an
investment greater than one hundred thousand dollars in machinery,
equipment, and related facilities for reducing emissions, increasing
efficiency, or enhancing reliability of the equipment at a new or existing
process unit.
b. "Operator" means any person owning, holding, or leasing a power plant or
process unit.
c. "Power plant" means:
(1) An electrical generating plant, and all additions to the plant, which
processes or converts coal in its natural form or beneficiated coal into
electrical power and which has at least one single electrical energy
generation unit with a capacity of fifty thousand kilowatts or more.
(2) A wind-powered electrical generating facility, on which construction is
completed before January 1, 2017, and all additions to the facility, which
provides electrical power through wind generation and which has at least
one single electrical energy generation unit with a nameplate capacity of
one hundred kilowatts or more.
(3) Any other type of electrical power generating facility excluding the types of
power plants identified in paragraphs 1 and 2 which has a capacity of one
hundred kilowatts or more and produces electricity for resale or for
consumption in a business activity.
d. "Process unit" means an oil refinery or gas processing plant and all adjacent units
that are utilized in the processing of crude oil or natural gas.
e. "Production equipment" means machinery and attachment units, other than
replacement parts, directly and exclusively used in the generation, transmission,
or distribution of electrical energy for sale by a power plant.
f. "Repowering" means an investment of more than two hundred million dollars or
one million dollars per megawatt of installed nameplate capacity, whichever is
less, in an existing power plant that modifies or replaces the process used for
converting coal in its natural form or beneficiated coal into electrical power.
2. Sales of production or environmental upgrade equipment that is delivered on or after
January 1, 2007, and used exclusively in power plants or repowering existing power
plants or in processing units are exempt from the tax imposed by this chapter.
3. Sales of tangible personal property, other than production or environmental upgrade
equipment, which is used in the construction of new power plants or to expand existing
power plants or to add environmental upgrades to existing power plants or repowering
existing power plants or to add environmental upgrades to existing process units are
exempt from the tax imposed by this chapter.
4. To receive the exemption at the time of purchase, the operator must receive from the
commissioner a certificate that the tangible personal property or production equipment
the operator intends to purchase qualifies for the exemption. If a certificate is not
received prior to the purchase, the operator shall pay the applicable tax imposed by
this chapter and apply to the commissioner for a refund.

5. If the tangible personal property or production equipment is purchased or installed by a
contractor subject to the tax imposed by this chapter, the operator may apply for a
refund of the difference between the amount remitted by the contractor and the
exemption imposed or allowed by this section.
### § 57-39.2-04.3. Sales tax exemption for manufacturing or recycling machinery and

equipment and primary sector business computer and telecommunications equipment.
1. Gross receipts from sales of machinery or equipment used directly in manufacturing of
tangible personal property for wholesale, retail, or lease are exempt from taxes under
this chapter. To be exempt, the machinery or equipment must be used in a new
manufacturing plant or in a physical or economic expansion of an existing
manufacturing plant. Purchase of replacement machinery or equipment is not exempt
unless it results in a physical or economic expansion of the plant.
2. Gross receipts from sales of machinery or equipment used directly in recycling of
tangible personal property are exempt from taxes under this chapter. To be exempt,
the machinery or equipment must be used in a new recycling facility or in physical or
economic expansion of an existing recycling facility. Purchase of replacement
machinery or equipment is not exempt unless it results in a physical or economic
expansion of the facility.
3. Gross receipts from sales of computer and telecommunications equipment that is an
integral part of a new primary sector business or a physical or economic expansion of
a primary sector business are exempt from taxes under this chapter. Purchase of
replacement equipment is not exempt under this subsection.
4. To qualify for exemption at the time of purchase, the customer, manufacturer, recycler,
or primary sector business must receive from the commissioner a certificate stating
that the machinery or equipment qualifies for the exemption. If a certificate is not
received before the purchase, the customer, manufacturer, recycler, or primary sector
business must pay the tax and apply to the commissioner for a refund.
5. If the machinery or equipment is purchased or installed by a contractor subject to tax
under this chapter, the manufacturer, recycler, or primary sector business must apply
for a refund of the amount remitted by the contractor.
6. For purposes of this section, the following definitions apply:
a. "Economic expansion" means an increase in production volume, employment, or
the types of products that can be manufactured or recycled.
b. "Equipment":
(1) For purposes of a customer, means a mold purchased by a customer and
used directly by a manufacturer in the manufacturing process;
(2) For purposes of a manufacturer or recycler, means any tangible personal
property other than machinery used directly in the manufacturing or
recycling process; and
(3) For purposes of a primary sector business other than manufacturing or
recycling, means telecommunications equipment and computer equipment,
printers, and software that are an integral part of the operations of the
primary sector business.
c. "Machinery" means mechanical devices purchased or constructed by the
manufacturer or recycler, or its agent, and used directly in manufacturing or
recycling operations at any time from the initial stage where the raw material is
first received at the plant site through the completion of the product, including
packaging and all processes prior to transportation of the product from the site.
The term includes electrical, mechanical, and electronic components that are part
of machinery and necessary for a machine to produce its effect or result and
environmental control equipment required to maintain certain levels of humidity or
temperature in a special and limited area of the manufacturing facility where the
regulation is essential for production to occur. The term includes computer
equipment that controls or monitors the functions of machinery used directly in
the manufacturing operations.

d. "Machinery" and "equipment":
(1) For purposes of a manufacturer or recycler, do not include handtools,
buildings, or transportation equipment not used directly in manufacturing or
recycling; machines and equipment used primarily in administrative,
accounting, sales, or other nonmanufacturing segments of the business; any
property that becomes a part of the manufactured or recycled product; or
any other equipment or machinery not used directly in manufacturing or
recycling; and
(2) For purposes of a primary sector business other than manufacturing or
recycling, do not include equipment that is not an integral part of the
operations of the primary sector business.
e. "Manufacturing", in addition to the meaning ordinarily ascribed to it, means the
processing of agricultural products, including registered and certified seed, but
does not include mining, refining, extracting oil and gas, or the generation of
electricity.
f. "Primarily" means more than fifty percent of the time the machinery or equipment
is used.
g. "Primary sector business" has the meaning provided in section 1-01-49.
h. "Recycling" means collecting or recovering material that would otherwise be solid
waste and performing all or part of the process in which the material becomes a
raw material for manufacturing or becomes a product for sale at retail or
wholesale.
i. "Used directly" with respect to manufacturing means used primarily in the actual
production, processing, fabrication, or assembly of raw materials, or partially
finished materials, into the form in which the product is finalized, packaged, and
ready for market. The term also means:
(1) To effect a direct physical change upon the tangible personal property.
(2) To guide or measure a direct physical change upon the property when the
function is an integral and essential part of tuning, verifying, or aligning the
component parts of the tangible personal property.
(3) To test or measure the property on the production line or at a site in the
location of production.
(4) To transport, convey, or handle the tangible personal property during the
manufacturing.
(5) To package the product for sale and shipment.
(6) To conduct research and development and design activities related to the
manufacturing process of the plant.
"Used directly" with respect to recycling means used solely in processing,
compacting, altering, transporting, or otherwise affecting material as a part of the
recycling process.
### § 57-39.2-04.4. Sales tax exemption for materials used to construct agricultural

commodity processing facility.
1. Gross receipts from sales of tangible personal property used to construct an
agricultural commodity processing facility in this state are exempt from taxes under
this chapter. To be exempt, the tangible personal property must be incorporated in the
structure of the facility or used in the construction process to the point of having no
residual economic value.
2. To receive the exemption at the time of purchase, the owner of the facility must receive
from the commissioner a certificate that the tangible personal property used to
construct an agricultural commodity processing facility which the owner intends to
purchase qualifies for the exemption. If a certificate is not received prior to the
purchase, the owner shall pay the applicable tax imposed by this chapter and apply to
the commissioner for a refund.
3. If the tangible personal property is purchased or installed by a contractor subject to the
tax imposed by this chapter, the owner may apply for a refund of the difference

between the amount remitted by the contractor and the exemption imposed or allowed
by this section.
4. For purposes of this section, the following definitions apply:
a. "Agricultural commodity processing facility" means buildings, structures, fixtures,
and improvements used or operated primarily for the processing or production of
marketable products from agricultural commodities. The term does not include a
facility that provides only storage, cleaning, drying, or transportation of
agricultural commodities.
b. "Facility" means each part of the facility which is used in a process primarily for
the processing of agricultural commodities, including receiving or storing
agricultural commodities; transporting the agricultural commodities or product
before, during, or after the processing; or packaging or otherwise preparing the
product for sale or shipment.
c. "Tangible personal property" does not include tools or machinery used to
construct an agricultural commodity processing facility and does not include
machinery or equipment exempted under section 57-39.2-04.3.
### § 57-39.2-04.5. Sales and use tax exemption for materials used in compressing,

processing, gathering, collecting, or refining of gas.
1. Gross receipts from sales of tangible personal property used to construct or expand a
system used to compress, process, gather, collect, or refine gas recovered from an oil
or gas well in this state or used to expand or build a gas processing facility in this state
are exempt from taxes under this chapter. To be exempt, the tangible personal
property must be incorporated into a system used to compress, process, gather,
collect, or refine gas. Tangible personal property used to replace an existing system to
compress, process, gather, collect, or refine gas does not qualify for exemption under
this section unless the replacement creates an expansion of the system.
2. To receive the exemption under this section at the time of purchase, the owner of the
gas compressing, processing, gathering, collecting, or refining system must receive
from the tax commissioner a certificate that the tangible personal property used to
construct or expand a system used to compress, process, gather, collect, or refine gas
recovered from an oil or gas well in this state or used to expand or build a gas
processing facility in this state which the owner intends to purchase qualifies for
exemption. If a certificate is not received before the purchase, the owner shall pay the
applicable tax imposed by this chapter and apply to the tax commissioner for a refund.
3. If the tangible personal property is purchased or installed by a contractor subject to the
tax imposed by this chapter, the owner of the gas compressing, processing, gathering,
collecting, or refining system may apply to the tax commissioner for a refund of the
difference between the amount remitted by the contractor and the exemption imposed
or allowed by this section. Application for a refund must be made at the times and in
the manner directed by the tax commissioner and must include sufficient information to
permit the tax commissioner to verify the sales and use taxes paid and the exempt
status of the sale or use.
4. For purposes of this section, a gas collecting system means a collection system
described in subdivision d of subsection 2 of section 38-08-06.4.
### § 57-39.2-04.6. Sales and use tax exemption for materials used in construction or

expansion of an oil refinery.
1. Gross receipts from sales of tangible personal property used in expanding or
constructing an oil refinery that has a nameplate capacity of processing at least five
thousand barrels of oil per day in this state are exempt from taxes under this chapter.
2. To receive the exemption at the time of purchase, the owner of the oil refinery must
receive from the tax commissioner a certificate that the tangible personal property
used to construct or expand an oil refinery qualifying under this section which the
owner intends to purchase qualifies for the exemption. If a certificate is not received

before the purchase, the owner shall pay the applicable tax imposed by this chapter
and apply to the tax commissioner for a refund.
3. If the tangible personal property is purchased or installed by a contractor subject to the
tax imposed by this chapter, the owner of the oil refinery may apply for a refund of the
difference between the amount remitted by the contractor and the exemption imposed
or allowed under this section. Application for a refund must be made at the times and
in the manner directed by the tax commissioner and must include sufficient information
to permit the tax commissioner to verify the sales and use taxes paid and the exempt
status of the sale or use.
4. This chapter and chapter 57-40.2 apply to the exemption under this section.
### § 57-39.2-04.7. Sales tax exemption for equipment used in telecommunications

infrastructure development.
Expired under S.L. 2011, ch. 470, § 1.
### § 57-39.2-04.8. Sales tax exemption for machinery or equipment used to produce coal

from a new mine.
1. Gross receipts from sales of machinery or equipment used to produce coal from a new
mine located in this state are exempt from the tax imposed by this chapter. The
exemption for each new mine under this section is limited to the first five million dollars
of sales and use tax paid.
2. Purchase of replacement machinery or equipment is exempt if the capitalized
investment in the new mine exceeds twenty million dollars using the United States
generally accepted accounting principles. Purchases of repair or replacement parts for
existing machinery or equipment are not exempt under this section.
3. The mine operator shall apply to the commissioner for a refund of sales and use taxes
paid for which the exemption is claimed under this section. A refund claim may not
exceed the limitation in subsection 1. If the machinery or equipment is used directly or
indirectly to produce coal, the interest provisions of section 57-39.2-25 do not apply to
purchases made before July 1, 2015. Application for the refund must be made at the
time and in the manner directed by the commissioner and must include sufficient
information to verify the correctness of the refund claim.
4. For purposes of this section:
a. "Machinery or equipment" means machinery or equipment purchased after
December 31, 2010, and used directly or indirectly to uncover, sever, crush,
handle, or transport coal removed from the earth. "Machinery or equipment"
includes draglines, excavators, rolling stock, conveyor equipment, reclamation
equipment, equipment to pulverize coal, water trucks, fuel trucks, low-boys,
cranes, lubrication trucks, motor graders, service trucks, light plants, and
dewatering equipment, but does not include rail spurs, office buildings,
workshops, or any component not used directly to uncover, sever, crush, handle,
or transport coal removed from the earth.
b. "New mine" means an area permitted under chapter 38-14.1 by the public service
commission after December 31, 2010.
c. "Produce coal" means mining operations to uncover, sever, crush, handle, or
transport coal from its natural location under the earth's surface to the mouth of
the mine and all activities necessary and incidental to the reclamation of that
location.
### § 57-39.2-04.9. Sales tax exemption for equipment used in telecommunications

infrastructure development.
Expired by S.L. 2013, ch. 457, §5.

### § 57-39.2-04.10. Sales tax exemption for materials used to construct a processing

facility to produce liquefied natural gas.
1. Gross receipts from sales of tangible personal property used to construct or expand a
processing facility in this state to produce liquefied natural gas are exempt from taxes
under this chapter. To be exempt, the tangible personal property must be incorporated
in the structure of the facility or used in the construction process to the point of having
no residual economic value.
2. To receive the exemption at the time of purchase, the owner of the processing facility
must receive from the commissioner a certificate that the tangible personal property
used to construct the processing facility which the owner intends to purchase qualifies
for the exemption. If a certificate is not received prior to the purchase, the owner shall
pay the applicable tax imposed by this chapter and apply to the commissioner for a
refund.
3. If the tangible personal property is purchased or installed by a contractor subject to the
tax imposed by this chapter, the owner may apply for a refund of the difference
between the amount remitted by the contractor and the exemption imposed or allowed
by this section.
### § 57-39.2-04.11. Sales tax exemption for materials used to construct a facility for coal

gasification byproducts.
1. Gross receipts from sales of tangible personal property used to construct or expand a
facility in this state to extract or process byproducts associated with coal gasification
are exempt from taxes under this chapter. To be exempt, the tangible personal
property must be incorporated in the structure of the facility or used in the construction
process to the point of having no residual economic value.
2. To receive the exemption at the time of purchase, the owner of the facility must receive
from the commissioner a certificate that the tangible personal property used to
construct the processing facility which the owner intends to purchase qualifies for the
exemption. If a certificate is not received prior to the purchase, the owner shall pay the
applicable tax imposed by this chapter and apply to the commissioner for a refund.
3. If the tangible personal property is purchased or installed by a contractor subject to the
tax imposed by this chapter, the owner may apply for a refund of the difference
between the amount remitted by the contractor and the exemption imposed or allowed
by this section.
4. For purposes of this section, "coal gasification" and "byproducts" have the same
meaning as defined in chapter 57-60.
### § 57-39.2-04.12. Sales tax rebate for certain purchases of replacement property for

property damaged or destroyed by 2011 flooding.
Expired under S.L. 2013, ch. 462, § 2.
### § 57-39.2-04.13. Sales and use tax exemption for enterprise information technology

equipment and computer software used in a qualified data center.
Expired under S.L. 2015, ch. 456, § 3.
### § 57-39.2-04.14. Sales and use tax exemption for materials used in compressing,

gathering, collecting, storing, transporting, or injecting carbon dioxide for secure
geologic storage or use in enhanced recovery of oil or natural gas.
1. Gross receipts from sales of tangible personal property used to construct or expand a
system used to compress, gather, collect, store, transport, or inject carbon dioxide for
secure geologic storage or use in enhanced recovery of oil or natural gas in this state
are exempt from taxes under this chapter. To be exempt, the tangible personal
property must be incorporated into a system used to compress, gather, collect, store,
transport, or inject carbon dioxide for secure geologic storage or use in enhanced
recovery of oil or natural gas. Tangible personal property used to replace an existing

system to compress, gather, collect, store, transport, or inject carbon dioxide for
secure geologic storage or use in enhanced recovery of oil or natural gas does not
qualify for exemption under this section unless the replacement creates an expansion
of the system.
2. To receive the exemption under this section at the time of purchase, the owner of the
gas compressing, gathering, collecting, storing, transporting, or injecting system must
receive from the tax commissioner a certificate that the tangible personal property
used to construct or expand a system used to compress, gather, collect, store,
transport, or inject carbon dioxide for secure geologic storage or use in enhanced
recovery of oil or natural gas qualifies for the exemption. If a certificate is not received
before the purchase, the owner shall pay the applicable tax imposed by this chapter
and apply to the tax commissioner for a refund.
3. If the tangible personal property is purchased or installed by a contractor subject to the
tax imposed by this chapter, the owner of the gas compressing, gathering, collecting,
storing, transporting, or injecting system may apply to the tax commissioner for a
refund of the difference between the amount remitted by the contractor and the
exemption imposed or allowed by this section. Application for a refund must be made
at the time and in the manner directed by the tax commissioner and must include
sufficient information to permit the tax commissioner to verify the sales and use taxes
paid and the exempt status of the sale or use.
4. This chapter and chapter 57-40.2 apply to the exemption under this section.
### § 57-39.2-04.15. Sales and use tax exemption for materials used to construct a fertilizer

or chemical processing facility.
1. Gross receipts from sales of tangible personal property used to construct a fertilizer or
chemical processing facility in this state, and any component integral to the fertilizer or
chemical processing plant, are exempt from taxes under this chapter. To be exempt,
the tangible personal property must be incorporated in the structure of the facility or
used in the construction process to the point of having no residual economic value.
The exemption provided in this section applies to all phases of construction under the
permit or application for permit required by subsection 2. An integral component to the
fertilizer or chemical processing plant:
a. May be owned directly or indirectly by the fertilizer or chemical processing facility,
or by an unrelated third party;
b. Must be located at the facility site; and
c. Must be necessary for the plant's processing of fertilizer or chemicals.
2. The owner of the fertilizer or chemical processing plant must receive from the
department of environmental quality an air quality permit or a notice that the air quality
permit application is complete. The owner shall provide this documentation to the tax
commissioner to qualify for the exemption under this section. Denial, expiration, or
revocation of a permit terminates the exemption under this section.
3. To receive the exemption under this section at the time of purchase, the owner of the
processing facility must receive from the tax commissioner a certificate that the
tangible personal property used to construct the processing facility which the owner
intends to purchase qualifies for exemption. If a certificate is not received before the
purchase, the owner shall pay the applicable tax imposed by this chapter and apply to
the tax commissioner for a refund.
4. If the tangible personal property is purchased or installed by a contractor subject to the
tax imposed by this chapter, the owner may apply for a refund of the difference
between the amount remitted by the contractor and the exemption imposed or allowed
by this section. Application for refund must be made at the times and in the manner
directed by the tax commissioner and must include sufficient information to permit the
tax commissioner to verify the sales and use taxes paid and the exempt status of the
sale or use.

5. For purposes of this section, a fertilizer or chemical processing facility means a
processing plant that produces for retail or wholesale a fertilizer, chemical, or chemical
derivative from natural gas, natural gas liquids, or crude oil components.
### § 57-39.2-04.16. Sales tax exemption for materials used to construct a qualified

straddle plant, a qualified fractionator, or qualified associated infrastructure.
1. Gross receipts from sales of tangible personal property used to construct or expand a
qualified straddle plant, a qualified fractionator, or qualified associated infrastructure in
this state are exempt from the tax imposed under this chapter. To qualify for the
exemption, the tangible personal property must be incorporated into a qualifying
straddle plant or a qualifying fractionator plant, or used in the construction process to
the point of having no residual economic value. Replacement of tangible personal
property does not qualify for the exemption under this section unless the replacement
creates an expansion of the plant or qualified associated infrastructure.
2. To receive the exemption at the time of purchase, the owner of the plant or qualified
associated infrastructure must receive from the tax commissioner a certificate that the
tangible personal property used to construct the plant qualifies for the exemption. If a
certificate is not received prior to the purchase, the owner shall pay the applicable tax
imposed by this chapter and apply to the tax commissioner for a refund.
3. If the tangible personal property is purchased or installed by a contractor subject to the
tax imposed by this chapter, the owner may apply for a refund of the difference
between the amount remitted by the contractor and the exemption allowed by this
section. Application for a refund must be made at the time and in the manner directed
by the tax commissioner, and must include sufficient information to permit the tax
commissioner to verify the sales and use taxes paid and the exempt status of the sale
or use.
4. For purposes of this section:
a. "Deep cut fractionator" means a plant that processes a mixed natural gas liquids
stream into purity natural gas liquids, including ethane, propane, butane, and
C-five plus.
b. "Expansion" means an increase in production volume, employment, or the type of
products produced.
c. "Qualified associated infrastructure" means:
(1) Natural gas liquid pipelines built to supply mixed natural gas liquids to the
qualified fractionator;
(2) Storage facilities for mixed natural gas liquids that will be processed by the
qualified fractionator;
(3) Storage facilities for purity natural gas liquids, including ethane, propane,
butane, and C-five plus, that are produced by the qualified fractionator;
(4) Disposal facilities built for the qualified fractionator and for onsite purchasers
of the fractionator's processed end-product;
(5) Rail upgrades required for the qualified fractionator and onsite purchasers to
access rail transportation; and
(6) Roads developed for the qualified fractionator, storage facilities, and onsite
customers.
d. "Qualified fractionator" means a deep cut fractionator located in this state with a
daily design capacity of at least forty-five thousand barrels of ethane, fifteen
thousand barrels of propane, thirteen thousand barrels of butane, and three
thousand barrels of C-five plus.
e. "Qualified straddle plant" means a straddle plant located in this state that is either
connected to a qualified fractionator or produces Y-grade liquids that are
dedicated for use by a qualified fractionator.
f. "Straddle plant" means a gas processing plant located on or near a gas
transmission line, which removes residual natural gas liquids from the gas stream
and returns the residue gas to the transmission line.

### § 57-39.2-04.17. Sales and use tax exemption for enterprise information technology

equipment and computer software used in a qualified data center. (Retroactive
application - See note)
1. Gross receipts from sales of enterprise information technology equipment and
computer software purchased for use by a qualifying business in a qualified data
center are exempt from the tax imposed by this chapter. To qualify for the exemption,
the enterprise information technology equipment or computer software must be
incorporated into or physically located within the qualified data center. Purchases of
upgraded or replacement enterprise information technology equipment and computer
software for use in a qualified data center also are exempt.
2. The future owner of a proposed data center shall apply to the tax commissioner to be
certified as a qualified data center. An applicant shall respond to a request for
additional information from the tax commissioner within thirty days of the request or
the application may no longer be considered.
3. To receive the exemption at the time of purchase, the qualified business shall obtain
from the tax commissioner a certificate that the enterprise information technology
equipment or computer software the qualified business intends to purchase qualifies
for the exemption. If a certificate is not received before the purchase, the qualified
business shall pay the applicable tax imposed by this chapter and apply to the tax
commissioner for a refund.
4. If the enterprise information technology equipment is purchased or installed by a
contractor subject to the tax imposed by this chapter, the qualified business may apply
for a refund of the difference between the amount remitted by the contractor and the
exemption imposed or allowed by this section. Application for a refund must be made
at the times and in the manner directed by the tax commissioner and must include
sufficient information to permit the tax commissioner to verify the sales and use taxes
paid and the exempt status of the sale or use.
5. For purposes of this section:
a. "Computer software" includes software used or loaded at a qualified data center,
software maintenance, software licensing, and software customization.
b. "Data center" means a centralized repository for the storage, management, and
dissemination of electronic data and information organized around a particular
body or bodies of knowledge.
c. "Enterprise information technology equipment" includes:
(1) Computer hardware, servers, routers, cooling systems, and cooling towers.
(2) Temperature control infrastructure and power infrastructure used for
transformation, distribution, or management of electricity used for the
maintenance and operation of a qualified data center.
(3) Exterior dedicated business-owned substations, backup power generation
systems, battery systems, or other related infrastructure.
(4) Racking systems, raised flooring, cabling, or trays necessary for the
maintenance and operation of a qualified data center.
d. "Qualified business" means the owner, operator, or tenants of a qualified data
center.
e. "Qualified data center" means a newly constructed or substantially refurbished
facility located in this state:
(1) Comprised of one or more buildings, the primary purpose of which is to
contain a data center, consisting of an aggregate amount of fifteen thousand
square feet [1394 square meters] or more, no fewer than fifty percent of
which is used for data processing;
(2) Located on a single parcel or on contiguous parcels;
(3) On which construction is completed or which is substantially refurbished
after December 31, 2020;
(4) Having the following attributes:
(a) Sophisticated fire suppression and prevention systems; and

(b) Enhanced security with security features, including video camera
surveillance; an electronic system requiring pass codes, key cards, or
biometric scans, such as hand scans or retinal or fingerprint
recognition to restrict access to selected personnel; or other similar
security features; and
(5) Certified by the tax commissioner as a qualified data center.
f. "Substantially refurbished" means a data center used to house enterprise
information technology equipment in which fifteen thousand square feet [1394
square meters] or more has been rebuilt, modified, or improved through methods,
including energy efficiency improvements, building improvements, and the
installation of enterprise information technology equipment, environmental
controls, and computer software.
6. In determining the total square footage of a qualified data center, the square footage of
office space, meeting space, mechanical space, and other support facility spaces must
be included if those spaces are used to support the operation of enterprise information
technology equipment.
7. Qualified data center owners that intend to collocate operators or tenants within the
center shall provide the operators or tenants with documentation from the tax
commissioner that the center meets the definition of a qualified data center under this
section. Operators or tenants shall obtain and submit a copy of the documentation with
all applications for sales tax exemption on information technology equipment and
computer software purchased for use in the qualified data center.
8. By January thirty-first of each year, a qualified data center owner shall file with the tax
commissioner, on forms and in the manner prescribed by the tax commissioner, a
report showing for the previous calendar year:
a. The amount of the exemption claimed under this section;
b. The number of jobs created or retained by the qualified data center; and
c. The type and value of any local incentives provided to the qualified data center.
9. Upon receipt of a written request from the chairman of the legislative management or
the chairman of a standing committee of the legislative assembly, the tax
commissioner shall disclose any information described under subsection 8. This
subsection does not authorize disclosure of the qualified data center owner's name,
social security number, federal employer identification number, address, or any other
information prohibited from disclosure under chapter 57-38.
### § 57-39.2-04.18. Sales and use tax exemption for materials used to construct, expand,

or upgrade a facility that refines renewable feedstock into sustainable aviation fuel.
Expired under S.L. 2023, ch. 38, § 9.
### § 57-39.2-04.19. Sales tax exemption for raw materials, single-use product contact

systems, and reagents used for biologic manufacturing - Report. (Expired effective
June 30, 2029)
1. Gross receipts from sales of raw materials, single-use product contact systems, and
reagents used directly for discovery, testing, screening, and production for biologic
manufacturing in this state are exempt from taxes under this chapter.
2. To receive the exemption at the time of purchase, the taxpayer must receive from the
tax commissioner a certificate that the raw materials, single-use product contact
systems, or reagents qualify for the exemption.
3. For purposes of this section:
a. "Biologic manufacturing" means the manufacturing process used to support
biologic product discovery, development, generation, product impurity removal,
chemical or physical product alteration, and analysis of in-process products to
final deliverable products which occurs exclusively within this state.
b. "Single-use product contact systems" means tubing, capsule filters, ion exchange
membrane chromatography devices, mixers, bioreactors, sterile fluid containment
bags, connection devices, and sampling receptacles.

4. a. By April first of each year, each taxpayer that received the exemption under this
section in the preceding calendar year shall file with the tax commissioner, on
forms and in the manner prescribed by the tax commissioner, a report showing
for the calendar year preceding the reporting deadline in this subdivision, the
taxpayer's:
(1) Total sales and use tax liability exempted under this section;
(2) Total gross payroll;
(3) Total property taxes paid and square footage of buildings owned by the
taxpayer;
(4) Total North Dakota workforce safety and insurance premiums paid;
(5) North Dakota unemployment taxes paid; and
(6) Total state income tax withheld by the taxpayer.
b. Failure to file the report required under subdivision a is cause to disallow the
exemption due to noncompliance. The tax commissioner shall provide notice of
the disallowed exemption to the taxpayer and assess any sales and use tax due.
An assessment of tax made under this subsection is final and irrevocably fixed.
c. By June first of each year, the tax commissioner shall submit to the legislative
management a written report summarizing the information received under
subdivision a, including a comparison of information received in the current
calendar year with data received in the preceding calendar year.
### § 57-39.2-04.20. Sales and use tax exemption for materials used in construction,

expansion, or environmental upgrade of a renewable feedstock refinery.
1. As used in this section:
a. "Environmental upgrade" means an investment of more than one hundred
thousand dollars in machinery, equipment, and related facilities for reducing
emissions, increasing efficiency, or enhancing reliability of the equipment at a
new or existing renewable feedstock refinery.
b. "Renewable feedstock" means "renewable biomass" as defined in 40 CFR
section 80.1401.
c. "Renewable feedstock refinery" means a facility in this state which creates
gasoline, jet fuel, or other transportation fuels by refining renewable feedstock
through deoxygenation and has a nameplate capacity of processing of no fewer
than five thousand barrels of renewable feedstock per day, and all adjacent units
that are used in the processing of renewable feedstock.
2. Gross receipts from sales of tangible personal property used in constructing,
expanding, or making an environmental upgrade to a renewable feedstock refinery are
exempt from taxes under this chapter.
3. The exemption may be received only at the time of purchase. To receive the
exemption, the owner of the renewable feedstock refinery must receive a certificate
from the tax commissioner indicating the tangible personal property used to construct,
expand, or make environmental upgrades to a renewable feedstock refinery that the
owner intends to purchase qualifies for the exemption under this section.
4. This chapter and chapter 57-40.2 apply to an exemption under this section.
### § 57-39.2-04.21. Sales and use tax exemption for materials used to construct or expand

a coal processing facility that utilizes coal as a feedstock.
1. Gross receipts from sales of tangible personal property used to construct or expand a
coal processing facility that utilizes coal as a feedstock in this state are exempt from
taxes under this chapter. To be exempt, the tangible personal property must be
incorporated in the structure of the facility or used in the construction process to the
point of having no residual economic value.
2. For purposes of this section:
a. "Coal processing facility that utilizes coal as a feedstock" means a facility that:
(1) Extracts critical minerals or rare earth elements from lignite coal; or

(2) Creates tangible personal property other than electricity, water, gas, or
steam from lignite coal, including lignite coal from which critical minerals or
rare earth elements have been extracted.
b. "Critical mineral" means a nonfuel mineral or mineral material essential to the
economic or national security of the United States and which has a supply chain
vulnerable to disruption. The term includes aluminum, antimony, arsenic, barite,
bauxite, beryllium, bismuth, cesium, chromium, cobalt, fluorspar, gallium,
germanium, graphite, hafnium, helium, indium, lithium, magnesium, manganese,
niobium, platinum group metals, potash, the rare earth elements group, rhenium,
rubidium, scandium, strontium, tantalum, tellurium, tin, titanium, tungsten,
uranium, vanadium, and zirconium.
c. "Rare earth elements" means any of a series of metallic elements of which the
oxides are classed as rare earths and which include the elements of the
lanthanide series, yttrium and scandium.
3. The owner of the facility must receive from the tax commissioner a certificate that the
tangible personal property used to construct or expand a facility qualifying under this
section which the owner intends to purchase qualifies for the exemption.
### § 57-39.2-05. Credit or refund for taxes paid on worthless accounts and repossessions.

1. Taxes paid on gross receipts represented by accounts found to be worthless and
actually charged off for income tax purposes may be credited upon subsequent
payment of the tax herein provided; provided, that if such accounts are hereafter
collected by the retailer, a tax must be paid upon the amount so collected. If a retailer's
filing responsibility has been assumed by a certified service provider, the certified
provider may claim on behalf of the retailer any bad debt allowance provided under
this section. The certified service provider shall credit or refund to the retailer the full
amount of any bad debt allowance or refund received under this section.
2. If a retailer has remitted the sales tax due on the full amount of an installment sales
contract rather than on only the installment payments received, the retailer may deduct
as a credit against the retailer's sales tax liability on the next return that the retailer is
required to file the amount of sales tax the retailer paid on the installment contract
payments which were not made by the purchaser of the merchandise sold under such
contract; such credit may be deducted by the retailer regardless of whether or not said
retailer has assigned the contract, provided, however, that if the retailer has assigned
the contract the retailer must have assigned it subject to an agreement to repurchase
the contract in the event of default by the purchaser under the contract or subject to a
guarantee that the payments under the contract would be made. In the event such
deduction exceeds the amount of sales tax due the state by the retailer in the next
regular return, such excess must be allowed as credit against future sales tax due
from the retailer. If in any case the credit, or any part of it, cannot be utilized by the
retailer because of a discontinuance of a business or for other valid reasons, the
amount thereof may be refunded to the retailer.
### § 57-39.2-06. Credit to relief agency and local governmental units.

A relief agency may apply to the commissioner for refund of the amount of tax imposed
under this chapter and paid upon sales to it of any goods, wares, or merchandise used for free
distribution to the poor and needy. Such refunds may be obtained only in the following amount
and in the manner and only under all of the following conditions:
1. On forms furnished by the commissioner, and during the time herein provided for the
filing of quarterly tax returns by retailers, the relief agency shall report to the
commissioner the total amount or amounts, valued in money, expended directly or
indirectly for goods, wares, or merchandise used for free distribution to the poor and
needy.
2. On these forms the relief agency shall separately list the persons making the sales to it
or to its order, together with the dates of the sales, and the total amount so expended
by the relief agency.

3. The relief agency must prove to the satisfaction of the commissioner that the person
making the sales has included the amount thereof in the computation of the gross
receipts of such person and that such person has paid the tax levied by this chapter,
based upon such computation of gross receipts.
If the commissioner is satisfied that the foregoing conditions and requirements have been
complied with, the commissioner shall refund the amount claimed by the relief agency.
### § 57-39.2-07. Sales tax to be added to purchase price and be a debt.

Repealed by I.M. approved November 2, 1976, S.L. 1977, ch. 593, § 6.
### § 57-39.2-08. Separate and additional tax on retail sales to be added to purchase price

and be a debt.
Repealed by I.M. approved November 2, 1976, S.L. 1977, ch. 593, § 6.
### § 57-39.2-08.1. Separate and additional tax on retail sales to be added to purchase price

and be a debt.
Repealed by I.M. approved November 2, 1976, S.L. 1977, ch. 593, § 6.
### § 57-39.2-08.2. Sales tax to be added to purchase price and be a debt.

1. Except as otherwise provided in subsection 2, retailers shall add the tax imposed
under this chapter, or the average equivalent thereof, to the sales price or charge, and
when added, such tax constitutes a part of such price or charge, is a debt from the
consumer or user to the retailer until paid, and is recoverable at law in the same
manner as other debts.
A retailer shall determine the amount of tax charged to and received from each
purchaser by use of a formula that applies the applicable tax rate to each taxable item
or total purchase and the product must be carried to the third decimal place. Amounts
of tax less than one-half of one cent must be disregarded and amounts of tax of
one-half of one cent or more must be considered an additional cent of tax. When a
local sales tax applies, the determination of tax charged to and received from each
customer will be applied to the aggregated state and local taxes.
2. On retail sales of manufactured homes used for residential or business purposes,
except as provided in subsection 35 of section 57-39.2-04, retailers shall add the tax
imposed under this chapter, or the average equivalent thereof, to the sales price or
charge, and when added, such tax constitutes a part of such price or charge, is a debt
from the consumer or user to the retailer until paid, and is recoverable at law in the
same manner as other debts. In adding such tax to the price or charge, retailers shall
add to it three percent of such price or charge.
### § 57-39.2-08.3. Sales tax on alcoholic beverages may be included in purchase price.

Expired under S.L. 2003, ch. 539, § 25; S.L. 2005, ch. 582, § 2.
### § 57-39.2-09. Unlawful act.

No retailer may advertise or hold out or state to the public or to any consumer, directly or
indirectly, that the tax or any part thereof imposed by this chapter shall be assumed or absorbed
by the retailer or that it will not be considered as an element in the price to the consumer or, if
added, that it or any part thereof will be refunded.
### § 57-39.2-10. Records required - Sales for resale exempt.

1. Every retailer required to make a report and pay any tax under this chapter shall
preserve such records of the gross proceeds of sale as the commissioner may require
and every retailer shall preserve for a period of three years and three months all
invoices and other records of goods, wares, or merchandise purchased for resale. All
such books, invoices, and other records must be open to examination at any time by
the commissioner or any of the commissioner's duly authorized agents.

2. Whenever a retailer accepts a resale certificate at the time of making a sale, which
sale would otherwise be subject to the sales tax, and such resale certificate contains
the sales tax permit number of the purchaser, such retailer making the sale is relieved
from submitting the sales tax upon the purchase price of the merchandise sold.
Whenever a person submits a false resale certificate to a retailer, the person
submitting the certificate is personally liable for the tax on the sale.
### § 57-39.2-10.1. Responsibilities of special events promoters - Penalty.

1. A promoter or organizer of a special event at which twenty-five or more special event
vendors participate shall, within twenty days following a special event, provide to the
tax commissioner a list identifying each participating special event vendor. The list
must be in the form and manner prescribed by the tax commissioner and must contain
the name and sales tax permit number of each special vendor. Records must be
retained by the promoter or organizer to the same extent as all transactions involving
sales or use tax as provided in section 57-39.2-10. For purposes of this section:
a. "Promoter" or "organizer" means a person or entity that organizes or promotes a
special event that results in the rental, occupation, or use of a structure, lot, tract
of land, motor vehicle, sample or display case, table, or any other similar items for
the provision of displays, promotional activities, or sale of tangible personal
property or services by special event vendors.
b. "Special event" means an entertainment, amusement, recreation, or marketing
event that occurs at a single location on a recurring or irregular basis and where
sales, displays, or promotional activities occur. Special events include auto
shows, boat shows, gun shows, sport shows, knife shows, home shows, craft
shows, flea markets, carnivals, circuses, bazaars, fairs, and art or other
merchandise displays or exhibits.
c. "Special event vendor" means a person or entity making sales, providing
displays, or otherwise engaging in promotional activities at a special event.
2. A special event does not include an event that is organized for the exclusive benefit of
a nonprofit organization if all of the net proceeds of the retail sales of all vendors at the
event inure to the benefit of a nonprofit organization.
3. A promoter or organizer of a special event who fails or refuses to comply with this
section may be subject to a penalty of two hundred fifty dollars per event, which
amount may be waived by the tax commissioner for good cause shown.
4. Except as otherwise provided in subsection 1, if a promoter or organizer includes a
special event vendor in a list previously submitted to the tax commissioner under
subsection 1, the promoter or organizer is not required to include the same special
event vendor in a list submitted to the tax commissioner for a subsequent special
event held within six months of the first event.
### § 57-39.2-11. Return of gross receipts.

1. Except as provided in section 57-39.2-12 for monthly reports and payments, on or
before the last day of the month following the close of the first quarterly period, and on
or before the last day of the month following each subsequent quarterly period of three
months, the retailer shall make out a return for the preceding quarterly period in the
form and manner as may be prescribed by the commissioner, showing the gross
receipts of the retailer, the amount of the tax for the period covered by the return, and
any further information as the commissioner may require to enable the retailer
correctly to compute and collect the tax herein levied. The commissioner, upon request
by any retailer and a proper showing of the necessity therefor, may grant unto the
retailer an extension of time not to exceed thirty days for making a return. If the
extension is granted to any retailer, the time in which the retailer is required to make
payment as provided for in section 57-39.2-12 must be extended for the same period
but interest must be charged upon the amount of the deferred payment at the rate of
twelve percent per annum from the date the tax would have been due if the extension
had not been granted to the date the tax is paid.

2. The commissioner may require the filing of returns and payment of tax on a monthly,
quarterly, annual, or other basis when the commissioner deems it necessary to ensure
payment of the tax imposed by this chapter. If the retailer's filing responsibility has
been assumed by a certified service provider, the retailer may authorize the certified
service provider to claim on behalf of the retailer all or part of the compensation to
which the retailer is entitled under sections 57-39.2-12.1 and 57-40.2-07.1.
3. Returns must be signed by the retailer or a duly authorized agent of the retailer and
must contain a written declaration that they are made and subscribed under the
penalties of this chapter. The tax commissioner may prescribe alternative methods for
signing, subscribing, or verifying a return filed by electronic means, including
telecommunications, that shall have the same validity and consequence as the actual
signature and written declaration for a paper return.
### § 57-39.2-12. Payment of tax - Bond - Creation of lien.

1. The tax levied under this chapter is due and payable in quarterly installments on or
before the last day of the month next succeeding each calendar quarterly period,
except that if total sales subject to sales and use taxes for the preceding calendar year
for any business which has been issued a sales tax permit equal or exceed three
hundred thirty-three thousand dollars, the tax levied under this chapter is payable
monthly on or before the last day of the next succeeding month. The tax commissioner
may, upon request and for good cause shown, waive the requirement to file and remit
monthly. The retailer shall pay the total tax due in the manner prescribed by the tax
commissioner. Penalties and interest for failure to file a return, for filing an incorrect
return, or for failure to pay the tax due are those prescribed in section 57-39.2-18. If
the total of sales subject to the tax decreases below three hundred thirty-three
thousand dollars for any succeeding year, the retailer may return to quarterly filing and
payments. When there is a sale of any business by any retailer or when any business
is discontinued by a retailer, the tax becomes due immediately prior to the sale or
discontinuance of the business and if not paid within fifteen days thereafter it becomes
delinquent and subject to the penalties provided in section 57-39.2-18. In the event of
a business reorganization in which the ownership of the business organization remains
in the same person or persons as prior to the reorganization, the total sales subject to
sales and use taxes for the preceding calendar year for the business that was
reorganized must be used to determine whether the tax is payable monthly under this
subsection.
2. Every retailer, at the time of making the return required hereunder, shall compute and
pay to the commissioner the tax due for the preceding period.
3. The commissioner, when in the commissioner's judgment it is necessary and advisable
to do so in order to secure the collection of the tax levied under this chapter, may
require any person subject to such tax to file with the commissioner a bond, issued by
a surety company authorized to transact business in this state and approved by the
insurance commissioner as to solvency and responsibility in such amount as the
commissioner may fix, to secure the payment of any tax and penalties due or which
may become due from such person. In lieu of such bond, securities approved by the
commissioner in such amounts as the commissioner prescribes, may be deposited
with the commissioner, which securities must be kept in the custody of the
commissioner and may be sold by the commissioner at public or private sale, without
notice to the depositor thereof, if it becomes necessary so to do in order to recover any
tax and penalties due. All moneys deposited as security with the commissioner under
the provisions of this subsection must be paid by the commissioner to the state
treasurer and must be credited by the state treasurer into a special fund to be known
as the retail sales and use tax security trust fund. If any tax, penalty, or costs imposed
by this chapter are not paid when due, by the person depositing moneys with the
commissioner as security for the payment of tax, penalty, or costs imposed by this
chapter, the commissioner shall certify that information to the director of the office of
management and budget who shall transmit the money to the commissioner who shall

apply the money deposited by the person or so much thereof as is necessary to satisfy
the tax and penalties due. The commissioner, when in the commissioner's judgment it
is no longer necessary to require the deposit to be maintained by the person, shall
certify that information to the director of the office of management and budget who
shall pay the unused money to the person entitled thereto.
4. Remittances on account of tax due under this chapter may not be deemed or
considered payment thereof unless or until the commissioner has collected or received
the amount due for such tax in cash or equivalent credit.
5. A retailer required to file monthly returns under subsection 1 shall file the returns by an
electronic method approved by the commissioner. A retailer that does not comply with
the requirement to file reports electronically is deemed to have failed to file the sales
and use tax returns as provided in section 57-39.2-15 and is subject to the penalties
provided in section 57-39.2-18. The commissioner may, for good cause shown, waive
the filing requirements of this subsection.
### § 57-39.2-12.1. Deduction to reimburse retailer for administrative expenses.

1. A retailer registered to report and remit sales, use, or gross receipts tax imposed under
chapter 57-39.2, 57-39.5, 57-39.6, or 57-40.2 may deduct and retain one and one-half
percent of the tax due. The aggregate of deductions allowed by this section and
section 57-40.2-07.1 may not exceed one hundred ten dollars per return. Retailers that
receive compensation under this subsection may not receive additional compensation
under subsection 2 or 3 for the same period.
2. A certified service provider that contracts with retailers to calculate, collect, and remit
tax due on behalf of retailers may deduct and retain from the tax remitted to the tax
commissioner compensation or a monetary allowance up to the amount approved by
the streamlined sales and use tax governing board effective June 1, 2006. The
compensation provided in this subsection applies only to tax remitted by certified
service providers on behalf of retailers that are remote sellers registered to collect
sales and use tax in this state under chapter 57-39.4. Certified service providers that
receive compensation under this subsection may not receive additional compensation
under subsection 1 or 3 for the same period.
3. A retailer that is a remote seller registered to collect sales and use tax under
chapter 57-39.4 and that uses a certified automated system to calculate, report, and
remit tax due under chapters 57-39.2, 57-39.4, and 57-40.2 may deduct and retain
compensation or a monetary allowance up to the amount approved by the streamlined
sales and use tax governing board during its December 2006 meeting. Retailers that
receive compensation under this subsection may not receive additional compensation
under subsection 1 or 2 for the same period.
4. For purposes of this section, "remote seller" means a retailer that does not have an
adequate physical presence to establish nexus in this state for sales and use tax
purposes.
5. Compensation may not be deducted and retained under this section unless the tax
due is paid within the time limitations under section 57-39.2-12 or 57-40.2-07 or
chapter 57-39.4. If a retailer fails to timely file a return or pay the tax due, the tax
commissioner may, for good cause shown, allow the retailer to deduct and retain the
compensation under this section.
6. The deduction allowed retailers or certified service providers by this section is to
reimburse retailers directly or indirectly for expenses incurred in keeping records,
preparing and filing returns, remitting the tax, and supplying information to the tax
commissioner upon request.
### § 57-39.2-13. Lien of tax - Collection - Action authorized.

1. Whenever any taxpayer liable to pay a tax or penalty imposed refuses or neglects to
pay the same, the amount, including any interest, penalty, or addition to such tax,
together with the costs that may accrue in addition thereto, is a lien in favor of the state
of North Dakota upon all property and rights to property, whether real or personal,

belonging to said taxpayer, and in the case of property in which a deceased taxpayer
held an interest as joint tenant or otherwise with right of survivorship at the time of
death, the lien continues as a lien against the property in the hands of the survivor or
survivors to the extent of the deceased taxpayer's interest therein, which interest must
be determined by dividing the value of the entire property at the time of the taxpayer's
death by the number of joint tenants or persons interested therein.
2. The lien aforesaid attaches at the time the tax becomes due and payable and
continues until the liability for such amount is satisfied. For the purposes of this
provision the words "due" and "due and payable" mean the first instant at which the tax
becomes due.
3. Any mortgagee, purchaser, judgment creditor, or lien claimant acquiring any interest in,
or lien on, any property situated in the state, prior to the commissioner filing in the
central indexing system maintained by the secretary of state, a notice of the lien
provided for in section 57-39.2-12, takes free of, or has priority over, the lien.
4. The commissioner shall index in the central indexing system the following data:
a. The name of the taxpayer.
b. The name "State of North Dakota" as claimant.
c. The date and time the notice of lien was indexed.
d. The amount of the lien.
e. The internal revenue service taxpayer identification number or social security
number of the taxpayer.
The notice of lien is effective as of eight a.m. next following the indexing of the notice.
Any notice of lien filed by the commissioner may be indexed in the central indexing
system without changing its original priority as to property in the county where the lien
was filed.
5. The commissioner is exempt from the payment of the filing fees as otherwise provided
by law for the indexing of the notice of lien, or for its satisfaction.
6. Upon payment of the tax as to which the commissioner has indexed notice in the
central indexing system, the commissioner shall index a satisfaction of the lien in the
central indexing system.
7. The attorney general, upon the request of the commissioner, shall bring an action at
law or in equity, as the facts may justify, without bond to enforce payment of any taxes
and any penalties, or to foreclose the lien therefor in the manner provided for
mortgages on real or personal property, and in such action shall have the assistance of
the state's attorney of the county in which the action is pending.
8. It is expressly provided that the foregoing remedies of the state are cumulative and
that no action taken by the commissioner or attorney general may be construed to be
an election on the part of the state or any of its officers to pursue any remedy
hereunder to the exclusion of any other remedy provided by law.
9. The technical, legal requirements outlined in this section relating to tax liens on all real
and personal property of the taxpayer to ensure payment of the taxes, including
penalties, interest, and other costs, are self-explanatory.
### § 57-39.2-14. Permits - Application fee for reissuance.

1. A person may not engage in or transact business as a retailer within this state unless a
permit or permits shall have been issued to that person as hereinafter prescribed.
Every person desiring to engage in or conduct business as a retailer within this state
shall file with the commissioner an application for a permit or permits. Every
application for such a permit shall be made upon a form prescribed by the
commissioner and shall set forth the name under which the applicant transacts or
intends to transact business, the location of the applicant's place or places of
business, and such other information as the commissioner may require. The
application shall be signed by the owner if a natural person; in the case of an
association, partnership, or limited liability company, by a member or partner thereof;
and in the case of a corporation, by an executive officer thereof or some person
specifically authorized by the corporation to sign the application, to which shall be

attached the written evidence of that person's authority. Any person registering under
the agreement adopted under chapter 57-39.4 shall register in this state. Any person
who is registered under the agreement is not required to sign the application and may
register through an agent. Any person who is registered under such agreement may
cancel its registration at any time but is liable for remitting any sales taxes collected
before cancellation. Registration under the agreement and collection of tax does not in
and of itself create nexus for other taxes or fees imposed by this state.
2. Upon determining that each applicant for a sales tax permit is a bona fide retailer, the
commissioner shall grant and issue to each applicant a permit for each place of
business within the state. A permit is not assignable and shall be valid only for the
person in whose name it is issued and for the transaction of business at the place
designated therein. It shall at all times be conspicuously displayed at the place for
which issued. Any transient merchant who is in the business of soliciting or making
sales at retail to consumers shall, before soliciting such a sale from a consumer,
exhibit to the consumer or prospective consumer the retail sales tax permit required by
this section; for the purposes of this sentence the term "transient merchant" shall
include any person, individual, copartnership, corporation, or limited liability company,
either as principal or agent, who solicits, engages in, does, or transacts any temporary
or transient business in this state, either in one locality, or in traveling from place to
place in this state, selling goods, wares, and merchandise, who does not intend to
become and does not become a permanent merchant of such place, and who, for the
purpose of carrying on such business, hires, leases, occupies, or uses, a building,
structure, lot, tract, railroad car, motor vehicle, or display case or sample case of any
kind for the exhibition and sale of such goods, wares, and merchandise.
3. Permits issued under the provisions of this section shall be valid and effective until
revoked by the commissioner.
4. Whenever the holder of a permit fails to comply with any of the provisions of this
chapter or any rules or regulations prescribed by the commissioner and adopted under
this chapter, or whenever the holder of a permit shall file returns showing no tax due
for four consecutive quarters, the commissioner, upon hearing after giving ten days'
notice of the time and place of the hearing to show cause why the holder's permit
should not be revoked, may revoke the permit. The commissioner also shall have the
power to restore licenses after such revocation.
5. Whenever the holder of a permit has had such a permit revoked for failure to comply
with the provisions of this chapter or any rules and regulations prescribed by the
commissioner and adopted under this chapter, the commissioner shall charge a fee of
fifty dollars for the issuance or reissuance of such permit. However, if a permit was
revoked for filing returns showing no tax due for four consecutive quarters, the
commissioner shall charge only a fee of five dollars for the issuance or reissuance of
such permit.
6. All permits in effect at the time this chapter takes effect are hereby continued and shall
remain in full force and effect unless revoked as herein provided. However, the
commissioner may issue a new form of permit to replace, at no charge to the
permitholders, all permits previously granted and issued that have not been revoked or
surrendered.
7. Whenever the holder of a permit is convicted of violating section 12.1-23-16, the
commissioner shall revoke the permit and the holder is not eligible to receive another
permit for a period of ten years from the date of conviction. Any person convicted of
violating section 12.1-23-16 who is not a holder of a permit at the time of conviction is
not eligible to receive a permit for a period of ten years from the date of conviction.
### § 57-39.2-14.1. Commissioner may authorize direct payment of sales and use tax.

Upon application by any person, the commissioner may issue to the applicant, subject to
such terms and conditions as the commissioner deems reasonable and necessary, a permit to
be known as a direct payment permit authorizing such applicant to make direct payment to the
commissioner of any sales or use tax imposed on any purchase, use, storage, or consumption

in this state of tangible personal property or services by such applicant. Such applicant may
elect to pay any such taxes directly to the commissioner and for that purpose may issue to the
retailer selling or furnishing the tangible personal property or services subject to such taxes a
direct payment certificate in the form prescribed by the commissioner, assuming the obligation
to pay all such taxes, and the receipt of such certificate discharges such retailer from any duty
to collect or liability for such taxes. Such direct payment permit may be revoked by the
commissioner, with or without cause, at any time.
### § 57-39.2-15. Failure to file return - Incorrect return.

If a return required by this chapter is not filed, or if a return when filed is incorrect or
insufficient, the commissioner shall determine the amount of tax due from any information as the
commissioner may be able to obtain, and, if necessary, may estimate the tax on the basis of
external indices, such as number of employees of the person concerned, rentals paid by the
person, the person's stock on hand, and other factors. The commissioner shall give notice of the
determination to the person liable for the tax. If the determination of tax due relates to an
incorrect or insufficient return filed by a taxpayer, notice of the determination must be given not
later than three years after the last day on which the return was due or three years after the
return was filed, whichever period expires later; if it is determined upon audit that the tax due
was twenty-five percent or more above the amount reported on a return, notice of determination
of tax due must be given not later than six years after the last day on which the return was due
or six years after the return was filed, whichever is later. Notice of determination of tax due for
any reporting period for which a taxpayer failed to file a return must be given not later than six
years after the due date of the return but if fraudulent information is given in a return or the
failure to file a return is due to the fraudulent intent or willful attempt of the taxpayer in any
manner to evade the tax, the time limitation herein provided for giving notice of the
determination of tax due does not apply. The determination of tax due fixes the tax finally and
irrevocably unless the person against whom it is assessed, within thirty days after the giving of
notice of the determination, protests the determination under rules adopted by the commissioner
and under chapter 28-32.
### § 57-39.2-15.1. Extensions of time to perform sales tax audits.

1. Before the expiration of time prescribed in section 57-39.2-15 for the assessment of
tax, the commissioner and the taxpayer may agree in writing to an extension of time
for the assessment of the tax. The tax may be assessed at any time prior to the
expiration of the period agreed upon. The period agreed upon may be extended by
subsequent agreements in writing made before the expiration of the period previously
agreed upon. No extension may be for more than one year from the date of the
extension agreement.
2. If a taxpayer agrees to an extension of time for assessment of tax, the period of time
for refund claims will be similarly extended.
### § 57-39.2-15.2. Governor and manager liability.

1. If a limited liability company required to hold a permit under this chapter fails for any
reason to file the required returns or to pay the taxes due under this chapter, the
governors, managers, or members of a member-controlled limited liability company,
jointly or severally, charged with the responsibility of supervising the preparation of the
returns and payments are personally liable for the failure. The dissolution of a limited
liability company does not discharge a governor's, manager's, or member's liability for
a prior failure of the limited liability company to file a return or remit the tax due. The
taxes, penalty, and interest may be assessed and collected under the provisions of this
chapter.
2. If the governors, managers, or members elect not to be personally liable for the failure
to file the required returns or to pay the tax due, the limited liability company must be
required to make a cash deposit or post and maintain with the tax commissioner a
bond or undertaking executed by a surety company authorized to do business in this

state. The cash deposit, bond, or undertaking provided for in this section must be in an
amount equal to the estimated annual sales tax liability of the limited liability company.
### § 57-39.2-15.3. Liability of a general partner in a limited liability limited partnership.

1. If a limited liability limited partnership required to hold a permit under this chapter fails
for any reason to file the required returns or to pay the tax due under this chapter, the
general partners, jointly or severally, charged with the responsibility of supervising the
preparation of the returns and payment of the tax are personally liable for the
partnership's failure. The dissolution of a limited liability limited partnership does not
discharge a general partner's liability for a prior failure of the partnership to file a return
or remit the tax due. The taxes, penalty, and interest may be assessed and collected
pursuant to the provisions of this chapter.
2. If the general partners elect not to be personally liable for the failure to file the required
returns or to pay the tax due, the limited liability limited partnership must make a cash
deposit or post and maintain with the commissioner a bond or undertaking executed
by a surety company authorized to do business in this state. The cash deposit, bond,
or undertaking must be in an amount equal to the estimated annual sales tax liability of
the limited liability limited partnership.
### § 57-39.2-16. Appeals.

An appeal may be taken by the taxpayer to the district court of the county in which the
taxpayer resides, or in which the taxpayer's principal place of business is located, within thirty
days after the taxpayer has received notice from the commissioner of the commissioner's
determination as provided for in section 57-39.2-15. The appeal must be taken pursuant to and
in accordance with chapter 28-32.
### § 57-39.2-17. Service of notice.

Any notice authorized or required under the provisions of this chapter may be given by
mailing the notice to the person for whom it is intended by first-class mail with proof of mailing
addressed to the person at the address given in the last return filed by that person under the
provisions of this chapter, or if no return has been filed, then by mailing the notice to the
person's last known address with proof of mailing. Mailing of the notice in the manner
prescribed by this section is presumptive evidence the notice was received by the person to
whom the notice is addressed.
### § 57-39.2-18. Penalties - Offenses.

1. a. If any person fails to file a return or corrected return or to pay any tax within the
time required by this chapter or, if upon audit, is found to owe additional tax, the
person is subject to interest of one percent of the tax per month or fraction of a
month of delay except the first month after the return or the tax became due.
b. In addition to the tax and interest prescribed in this chapter, a taxpayer is subject
to penalties as follows:
(1) If any taxpayer, without intent to evade any tax imposed by this chapter, fails
to file a return, on or before the prescribed or extended due date, a penalty
equal to five percent of the tax required to be reported, or five dollars,
whichever is greater, must be added if the failure is for not more than one
month, counting each fraction of a month as an entire month, with an
additional five percent for each additional month or fraction of a month
during which the failure continues, not exceeding twenty-five percent in the
aggregate.
(2) If any taxpayer, without intent to evade any tax imposed by this chapter, fails
to pay the amount shown as tax due on any return, filed on or before the
prescribed or extended due date, a penalty of five percent of the tax due, or
five dollars, whichever is greater, must be added to the tax.

(3) If upon audit of a taxpayer's return an additional tax is found to be due,
penalty as prescribed in subdivision a or b must be added to the tax.
(4) The commissioner, if satisfied that the delay was excusable, may waive, and
if paid, refund all or any part of the penalty and interest. The penalty and
interest must be paid to the commissioner and disposed of in the same
manner as other receipts under this chapter. Unpaid penalties and interest
may be enforced in the same manner as the tax imposed by this chapter.
2. Any person who sells tangible personal property, tickets or admissions to places of
amusement, and athletic events, or steam, gas, and communication service at retail in
this state after that person's permit shall have been revoked, or without procuring a
permit as provided in section 57-39.2-14, or who violates section 57-39.2-09, and the
officers of any corporation or the managers of any limited liability company who so
acts, is guilty of a class A misdemeanor.
3. Repealed by S.L. 1975, ch. 106, § 673.
4. The certificate of the commissioner to the effect that a tax has not been paid, that a
return has not been filed, or that information has not been supplied pursuant to the
provisions of this chapter, shall be prima facie evidence thereof.
5. Any person failing to comply with any of the provisions of this chapter, or failing to
remit within the time herein provided to the state the tax due on any sale or purchase
of tangible personal property subject to said sales tax, shall be guilty of a class A
misdemeanor.
### § 57-39.2-18.1. Corporate officer liability.

1. If a corporation required to hold a permit issued under this chapter fails for any reason
to file the required returns or to pay the tax due, the president, vice president,
secretary, or treasurer of the corporation, jointly or severally, having control, or
supervision of, or charged with the responsibility for making the returns and payments
are personally liable for the failure. The dissolution of a corporation shall not discharge
an officer's liability for a prior failure of the corporation to make a return or remit the tax
due. The sum due for the liability may be assessed and collected pursuant to the
provisions of this chapter for the assessment and collection of other liabilities.
2. If the corporate officers elect not to be personally liable for the failure to file the
required returns or to pay the tax due, the corporation must be required to make a
cash deposit or post and maintain with the tax commissioner a bond or undertaking
executed by a surety company authorized to do business in this state. The cash
deposit, bond, or undertaking provided for in this section must be in an amount equal
to the estimated annual sales tax liability of the corporation.
### § 57-39.2-19. Commissioner to administer chapter.

The commissioner is hereby charged with the administration of this chapter and the taxes
imposed thereby. Such commissioner may prescribe all rules and regulations not inconsistent
with the provisions of this chapter, necessary and advisable for its detailed administration and to
effectuate the purposes, including the right to provide for the issuance and sale by the state of
coupons covering the amount of tax or taxes to be paid under this chapter, if such method is
deemed advisable by said commissioner.
### § 57-39.2-20. Tax, penalties, and other charges paid to commissioner - Disposition.

All fees, taxes, penalties, and other charges imposed and collected under this chapter must
be paid to the commissioner in the form of a remittance payable to the commissioner, who shall
transmit each payment monthly to the state treasurer to be deposited in the state treasury to the
credit of the general fund.
### § 57-39.2-21. General powers.

1. The commissioner, for the purpose of ascertaining the correctness of any return or for
the purpose of making an estimate of the taxable income and receipts of any taxpayer,

has power to examine or cause to be examined by any agent or representative
designated by the commissioner books, papers, records, or memoranda; to require by
subpoena the attendance and testimony of witnesses; to issue and sign subpoenas; to
administer oaths; to examine witnesses and receive evidence; and to compel
witnesses to produce for examination books, papers, records, and documents relating
to any matter which the commissioner has the authority to investigate or determine.
2. If the commissioner finds the taxpayer has made a fraudulent return, the costs of said
hearing must be taxed to the taxpayer. In all other cases the cost must be paid by the
state.
3. The fees and mileage to be paid witnesses and taxed as costs must be the same as
prescribed by law in proceedings in the district court of this state in civil cases. All
costs must be taxed in the manner provided by law in proceedings in civil cases. When
the costs are taxed to the taxpayer, they must be added to the taxes assessed against
said taxpayer and must be collected in the same manner. Costs taxed to the state
must be certified by the commissioner to the state treasurer, who shall issue warrants
for the amount of said costs.
4. In cases of disobedience to a subpoena, the commissioner may invoke the aid of any
court of competent jurisdiction in requiring the attendance and testimony of witnesses
and production of records, books, papers, and documents, and such court may issue
an order requiring the person to appear before the commissioner and give evidence or
produce records, books, papers, and documents, as the case may be, and any failure
to obey such order of court may be punished by the court as contempt thereof.
5. Testimony on hearings before the commissioner may be taken by a deposition as in
civil cases, and any person may be compelled to appear and depose in the same
manner as witnesses may be compelled to appear and testify as hereinbefore
provided.
### § 57-39.2-22. Commissioner may appoint agents and employees - Compensation -

Bond.
1. The commissioner may appoint such agents, auditors, clerks, and employees as the
commissioner deems necessary, fix their salaries and compensation and prescribe
their duties and powers, and may remove such persons so appointed. Each auditor
appointed by the commissioner must have had at least three years' experience, or the
education equivalent thereof, in the auditing and checking of books of account.
2. All such agents and employees must be allowed such reasonable and other necessary
traveling expenses as may be incurred in the performance of their duties not to
exceed, however, such amounts as are now or may hereafter be fixed by law.
3. The commissioner may require such of the officers, agents, and employees as the
commissioner designates to give bond for the faithful performance of the duties in
such sum and such sureties as the commissioner determines and the state shall pay
the premiums on such bonds.
4. The commissioner may utilize the office of the treasurer of the various counties in
order to administer this chapter and effectuate its purposes and may appoint the
treasurers of the various counties as the commissioner's agents to collect any or all of
the taxes imposed by this chapter. No additional compensation may be paid to said
treasurer by reason thereof.
### § 57-39.2-23. Information deemed confidential - Certain releases of information

authorized.
Except as provided by law:
1. a. The commissioner or an individual having an administrative duty under this
chapter may not divulge or make known in any manner whatever the business
affairs, operations, or information obtained from any person under any reporting
requirement of this chapter, or by an investigation of any person in the discharge
of official duty, or the amount or sources of income, profits, losses, expenditures,
or any particulars set forth or disclosed in any return, or permit any return or copy

or any book containing any abstract of particulars to be seen or examined by any
individual.
b. A court of competent jurisdiction may issue an order or subpoena directing the tax
commissioner to disclose state tax return information to a local, state, or federal
law enforcement official conducting a criminal investigation if the court determines
that the facts submitted by the applicant satisfy the following:
(1) There is probable cause to believe that a specific criminal act has been
committed and that the return or return information constitutes evidence of a
criminal offense or may be relevant to a matter relating to the commission of
the criminal offense;
(2) The return or return information is sought exclusively for use in a criminal
investigation or proceeding concerning such act; and
(3) The information sought to be disclosed cannot reasonably be obtained
under the circumstances, from another source.
c. Before obtaining an order under this subsection, a law enforcement official may
request information from the tax commissioner as to whether a taxpayer, which is
the subject of a criminal investigation for which a return or return information is or
may be relevant to the commission of a criminal offense, has complied with the
requirements of this chapter. For purposes of this request, the tax commissioner
is limited to stating that the taxpayer has or has not complied with these
requirements.
d. Except as required during court proceedings, tax return information disclosed to
law enforcement under this section remains confidential during an active criminal
investigation, after the investigation, after prosecution concludes, or until the time
period for appeals has expired, whichever is later.
2. The commissioner may authorize examination of those returns by other state officers
and at the commissioner's discretion furnish to the tax officials of other states, the
multistate tax commission, and the United States any information contained in the tax
returns and reports and related schedules and documents filed under this chapter, and
in the related report of an audit or investigation, if the information is furnished solely for
tax purposes. The multistate tax commission may make the information available to
the tax officials of any other state and the United States for tax purposes.
3. The commissioner may furnish to workforce safety and insurance, the job insurance
division of job service North Dakota, and the secretary of state, upon request of the
respective agency, a list or lists of holders of permits issued under this chapter or
chapter 57-40.2, together with the addresses and tax department file identification
numbers of those permitholders. The agency may use the list or lists only for the
purpose of administering the duties of the agency. The commissioner may furnish to
the unclaimed property division of the board of university and school lands, upon its
request, the name, address, and the permitholder's federal identification number for
the sole purpose of identifying the owner of an unclaimed voucher authorized by the
commissioner.
4. The commissioner may furnish to a state agency or private entity a list of names and
addresses of holders of permits issued under this chapter or chapter 57-40.2 for the
purpose of jointly publishing or distributing publications or other information under
section 54-06-04.3. Any information provided may only be used for the purpose of
jointly publishing or distributing publications or other information as provided in section
54-06-04.3.
5. The commissioner may make information pertaining to county lodging taxes, county
lodging and restaurant taxes, city lodging taxes, city lodging and restaurant taxes, or
city or county sales and use taxes, contained in tax returns, reports, related schedules
and documents, and reports of an audit or investigation available upon request to no
more than two duly elected or appointed members of the governing body of a city or
county for which collection and administration of the tax is required by statute or a tax
collection agreement administered under section 57-01-02.1. The governing body of
the city or county or its members may not divulge or make known in any manner the

business affairs, operations, or other information acquired from the commissioner
under this subsection concerning any person, corporation, limited liability company, or
other entity unless the disclosure is by judicial order and for tax administration
purposes only.
6. The commissioner or any person having an administrative duty under this chapter may
announce that a permit has been revoked.
7. The tax commissioner, upon written request from the director of the North Dakota
lottery, may provide a written statement to the director, employees, or agents of the
North Dakota lottery, in which the tax commissioner is limited to stating that the lottery
retailer applicant has complied or not complied with the requirements of this chapter.
The information obtained under this subsection is confidential and may be used for the
sole purpose of determining whether the applicant meets the requirements of
subsections 3, 4, and 5 of section 53-12.1-07.
8. Upon request, the commissioner may furnish to the unclaimed property division of the
board of university and school lands, a taxpayer's name, address, and federal
identification number for identifying the owner of an unclaimed voucher authorized by
the commissioner or to locate the apparent owner of unclaimed property as provided
under chapter 47-30.2.
9. The commissioner may provide the department of commerce information obtained
through the administration of the sales tax under this chapter or the use tax under
chapter 57-40.2. A request by the department of commerce for information must be in
writing and must be limited to information necessary to evaluate the degree of success
and compliance with statutory or contractual performance standards established for
employers who received economic development assistance from this state. A request
under this subsection does not require the commissioner to compile or create a record,
including compiling or creating a record that does not exist from electronically stored
information. Information received by the department of commerce under this
subsection is not subject to section 44-04-18 and section 6 of article XI of the
Constitution of North Dakota and may not be disclosed by the department of
commerce except in an aggregate format that does not allow the identification of a
taxpayer and does not contain any information in the returns or reports filed by a
taxpayer.
### § 57-39.2-24. Correction of errors.

Repealed by S.L. 2017, ch. 409, § 9.
### § 57-39.2-24.1. Claim for refund.

1. A taxpayer may file a claim for refund of tax that was not due, or for which a refund is
authorized under this chapter or chapter 57-40.2. A refund claim must be filed in the
manner provided in this section.
2. A taxpayer shall file a claim for refund with the tax commissioner within three years
after the due date of the return or the date the return was filed, whichever is later.
3. For purposes of this section, "taxpayer" means a person who is required under this
chapter or chapter 57-40.2 to file a return and who has remitted to the tax
commissioner the tax for which a refund is claimed.
### § 57-39.2-25. Payment of refund.

1. Whenever by any provisions of this chapter a refund is authorized, the commissioner
shall certify the amount of the refund, the reason therefor, and the name of the payee
to the office of management and budget, who shall thereupon draw a warrant on the
general fund in the amount specified payable to the named payee. Interest of ten
percent per annum must be allowed and paid upon any overpayment of tax from sixty
days after the due date of the return or after the date the return was filed or after the
date the tax due was fully paid, whichever comes later, to the date of the refund.

2. If the tax commissioner disallows a claim for credit or refund, the tax commissioner
shall notify the taxpayer accordingly. The decision of the tax commissioner to deny a
claim is final and irrevocable thirty days after the date of notice unless within the
thirty-day period the taxpayer files a written protest. A written protest must be filed
under rules adopted by the tax commissioner under chapter 28-32.
### § 57-39.2-26. Allocation of revenue.

(Effective through June 30, 2027)
Except as provided by sections 57-39.2-26.1, 57-39.2-26.2, 57-39.2-26.3, 57-39.2-26.4, and
57-39.2-26.5, all moneys collected and received under this chapter must be paid into the state
treasury and must be credited by the state treasurer to the general fund. Moneys deposited with
the commissioner as security for the payment of tax, penalties, or costs due must be deposited
and accounted for as provided in subsection 3 of section 57-39.2-12.
Allocation of revenue. (Effective after June 30, 2027, and through June 30, 2029)
Except as provided by sections 57-39.2-26.1, 57-39.2-26.2, and 57-39.2-26.5, all moneys
collected and received under this chapter must be paid into the state treasury and must be
credited by the state treasurer to the general fund. Moneys deposited with the commissioner as
security for the payment of tax, penalties, or costs due must be deposited and accounted for as
provided in subsection 3 of section 57-39.2-12.
Allocation of revenue. (Effective after June 30, 2029) Except as provided by sections
paid into the state treasury and must be credited by the state treasurer to the general fund.
Moneys deposited with the commissioner as security for the payment of tax, penalties, or costs
due must be deposited and accounted for as provided in subsection 3 of section 57-39.2-12.
### § 57-39.2-26.1. State aid distribution fund - State treasurer - Continuing appropriation.

Notwithstanding any other provision of law, a portion of sales, gross receipts, use, and
motor vehicle excise tax collections, equal to forty-three and one-half percent of an amount
determined by multiplying the quotient of one percent divided by the general sales tax rate, that
was in effect when the taxes were collected, times the net sales, gross receipts, use, and motor
vehicle excise tax collections under chapters 57-39.2, 57-39.5, 57-39.6, 57-40.2, and 57-40.3
must be deposited by the state treasurer in the state aid distribution fund. The state tax
commissioner shall certify to the state treasurer the portion of sales, gross receipts, use, and
motor vehicle excise tax net revenues that must be deposited in the state aid distribution fund
as determined under this section. Revenues deposited in the state aid distribution fund are
appropriated to the state treasurer on a continuing basis and must be allocated monthly as
follows:
1. Fifty-three and seven-tenths percent of the revenues must be allocated to counties as
provided in this subsection.
a. Sixty-four percent of the amount must be allocated among the seventeen
counties with the greatest population, in the following manner:
(1) Thirty-two percent of the amount must be allocated equally among the
counties; and
(2) The remaining amount must be allocated based upon the proportion each
such county's population bears to the total population of all such counties.
b. Thirty-six percent of the amount must be allocated among all counties, excluding
the seventeen counties with the greatest population, in the following manner:
(1) Forty percent of the amount must be allocated equally among the counties;
and
(2) The remaining amount must be allocated based upon the proportion each
such county's population bears to the total population of all such counties.
A county shall deposit all revenues received under this subsection in the county
general fund. Each county shall reserve a portion of its allocation under this subsection
for further distribution to, or expenditure on behalf of, townships, rural fire protection
districts, rural ambulance districts, soil conservation districts, county recreation service
districts, county hospital districts, the Garrison Diversion Conservancy District, the
southwest water authority, and other taxing districts within the county, excluding school

districts, cities, and taxing districts within cities. The share of the county allocation
under this subsection to be distributed to a township must be equal to the percentage
of the county share of state aid distribution fund allocations that township received
during calendar year 1996. The governing boards of the county and township may
agree to a different distribution.
2. Forty-six and three-tenths percent of the revenues must be allocated to cities based
upon the proportion each city's population bears to the total population of all cities.
A city shall deposit all revenues received under this subsection in the city general
fund. Each city shall reserve a portion of its allocation under this subsection for further
distribution to, or expenditure on behalf of, park districts and other taxing districts
within the city, excluding school districts. The share of the city allocation under this
subsection to be distributed to a park district must be equal to the percentage of the
city share of state aid distribution fund allocations that park district received during
calendar year 1996, up to a maximum of thirty percent. The governing boards of the
city and park district may agree to a different distribution.
3. The state treasurer, for the purpose of making revenue allocations to counties and
cities for each month of the fiscal year under this section, shall determine the
population of counties and cities before the first day of the fiscal year using the most
recent actual or estimated census data published by the United States census bureau.
### § 57-39.2-26.2. Allocation of revenues to senior citizen services and programs

matching fund - Continuing appropriation.
Notwithstanding any other provision of law, a portion of sales, use, and motor vehicle excise
tax collections equal to the amount of revenue that would have been generated by a levy of
eighty-seven and one-half percent of one mill on the taxable valuation of all property in the state
subject to a levy under section 57-15-56 in the previous taxable year must be deposited by the
state treasurer in the senior citizen services and programs fund during the period from July first
through December thirty-first of each year. The state tax commissioner shall certify to the state
treasurer the portion of sales, use, and motor vehicle excise tax revenues which must be
deposited in the fund as determined under this section. Revenues deposited in the senior citizen
services and programs fund are provided as a standing and continuing appropriation for
allocation as provided in subsection 5 of section 57-15-56. Any unexpended and unobligated
amount in the senior citizen services and programs fund at the end of any biennium must be
transferred by the state treasurer to the state general fund.
### § 57-39.2-26.3. County aid distribution fund - State treasurer - Continuing appropriation.

(Effective through June 30, 2027)
1. There is created in the state treasury the county aid distribution fund. The fund
consists of all moneys transferred to the fund under subsection 2. All moneys in the
fund are appropriated to the state treasurer on a continuing basis for the purpose of
providing allocations to an eligible county.
2. Notwithstanding any other provision of law, a portion of sales, gross receipts, use, and
motor vehicle excise tax collections, equal to one-fourth of one percent of an amount
determined by multiplying the quotient of one percent divided by the general sales tax
rate, that was in effect when the taxes were collected, times the net sales, gross
receipts, use, and motor vehicle excise tax collections under chapters 57-39.2,
57-39.5, 57-39.6, 57-40.2, and 57-40.3 must be deposited by the state treasurer in the
county aid distribution fund. The tax commissioner shall certify to the state treasurer
the portion of sales, gross receipts, use, and motor vehicle excise tax net revenues
that must be deposited in the county aid distribution fund as determined under this
subsection.
3. At least quarterly, the state treasurer shall allocate the moneys in the fund to the
county with the lowest ratio of taxable property values per capita and a population of
more than ten thousand.
4. The county treasurer shall deposit all revenues received under this section in the
county general fund.

5. For purposes of determining taxable property values under this section, the state
treasurer shall use the most recent data published by the tax commissioner in the tax
levy report.
6. For purposes of determining the county's population under this section, the state
treasurer shall use the most recent actual or estimated census data published by the
United States census bureau.
### § 57-39.2-26.4. Large facility development fund - State treasurer - Continuing

appropriation - Report. (Effective through June 30, 2027)
1. There is created in the state treasury the large facility development fund. The fund
consists of all moneys transferred to the fund under subsection 2. All moneys in the
fund are appropriated to the state treasurer on a continuing basis for the purpose of
providing distributions to an eligible county or city.
2. Notwithstanding any other provision of law, after the allocations under sections
57-39.2-26.1, 57-39.2-26.2, and 57-39.2-26.3, a portion of sales, gross receipts, and
use tax collections equal to the amount under subsection 3 must be deposited by the
state treasurer in the large facility development fund as needed. The tax commissioner
shall calculate the amount needed for distribution under subsection 3 and shall certify
to the state treasurer the portion of sales, gross receipts, and use tax net revenues
that must be deposited in the fund to provide for the distribution.
3. Within thirty days after construction begins on the large facility, the state treasurer shall
distribute to a county or city an amount equal to one percent of up to two billion dollars
of estimated cost of tangible property eligible for a tax exemption under section
a. The county or city is levying a local sales tax for infrastructure, public safety, or
economic development; and
b. The county in which the large facility is located has a hub city and received at
least thirty million dollars of oil and gas gross production tax revenue allocations
under section 57-51-15 from September 1, 2021, through August 31, 2022.
4. To qualify for the distribution under subsection 3, the large facility must:
a. Be a new fertilizer or chemical processing plant that is eligible for a tax exemption
under section 57-39.2-04.15;
b. Begin construction after July 1, 2023; and
c. Have an estimated total cost of at least one billion dollars.
5. A county or city may receive only one distribution under subsection 3.
6. If the large facility is within city limits, only a city is eligible to receive a distribution
under subsection 3.
7. The owner of the large facility shall provide information and documentation to the tax
commissioner to determine the estimated cost of the tangible property and the
estimated total cost of the large facility for calculations under this section.
8. If a county or city receives a distribution from the fund, the county or city shall provide
at least one report to the legislative management on the use of the funding. The report
must include the amount of funding received and spent by the county or city, including
an itemized list of the amounts spent and a description of how the funding was used
by the county or city.
### § 57-39.2-26.5. Animal agriculture facility infrastructure fund - State treasurer -

Continuing appropriation. (Expired effective July 1, 2029)
1. The animal agriculture facility infrastructure fund is created as a special fund in the
state treasury. The fund consists of all moneys transferred to the fund under
subsection 2. All moneys in the fund are appropriated to the state treasurer on a
continuing basis for the purpose of providing distributions to counties.
2. Notwithstanding any other provision of law, after the allocations under sections
57-39.2-26.1, 57-39.2-26.2, 57-39.2-26.3, and 57-39.2-26.4, a portion of sales, gross
receipts, and use tax collections equal to the combined total of the amounts certified
under subsection 4, not to exceed five hundred thousand dollars per year, must be

deposited by the state treasurer in the animal agriculture facility infrastructure fund as
needed.
3. Once per year, the state treasurer shall distribute to each county the amount certified
by the tax commissioner under subsection 4. If the amount certified for a year exceeds
five hundred thousand dollars, the state treasurer shall distribute the funding on a
pro rata basis.
4. The amount certified by the tax commissioner for each county is the sum of the state
portion of sales, gross receipts, and use tax due under this title on eligible tangible
personal property purchased to construct new or to expand, upgrade, or replace
existing animal agriculture facilities located in the county, including the purchase of
new equipment used in animal agriculture facilities, based on documentation
submitted to the tax commissioner by the facility owner, facility operator, or a
contractor.
5. Documentation, including any required supporting documentation, must be submitted
in the form and manner prescribed by the tax commissioner. The documentation for
eligible tangible personal property submitted under this section must equal a taxable
value of at least three hundred thousand dollars purchased during the calendar year
and must be submitted by March thirty-first of the subsequent year. For purposes of
this section, "animal agriculture facility" means a building or structure where an animal
is kept, handled, housed, or bred.
6. Upon receipt of the funding distributed under this section, the county treasurer shall
deposit the funding into an infrastructure development fund. The infrastructure
development fund consists only of the funding distributed under this section and may
be used only for infrastructure projects near animal agriculture facilities located in the
county or for other county expenses. Pursuant to section 11-23-02, the cash reserve in
the county's infrastructure development fund may exceed the limit for the fund.
7. An organized township within the county may request a portion of the funding from the
county's infrastructure development fund for township road projects near animal
agriculture facilities located in the township, and the county treasurer may distribute
the requested funding to the organized township upon approval by the board of county
commissioners.
### § 57-39.2-27. Disposition of excess tax collections.

Whenever a retailer has collected a sales tax from a customer in excess of the amount
prescribed or due under this chapter, and if the retailer does not refund the excessive tax
collected to the customer, the amount so collected by the retailer must be paid by the retailer to
the tax commissioner in the return filed for the period in which the excessive collection occurred.
If the excessive collection is subsequently refunded by the retailer to the customer, the retailer
may file an amended return with the tax commissioner for the period the excess tax was
collected and file a claim for refund.
### § 57-39.2-28. Refunds for Canadian residents.

The tax imposed under this chapter on gross receipts from sales made to a person who is a
resident of Canada may be refunded under the following conditions:
1. The Canadian resident was in North Dakota for the express purpose of making a
purchase, and not as a tourist.
2. The goods will be removed from North Dakota within thirty days of purchase and will
be used permanently outside North Dakota.
3. The Canadian resident applies in writing to the commissioner on a form as the
commissioner may prescribe reciting sufficient facts establishing the exempt status of
the sale.
4. The qualifying sale is one in which the total gross receipts from each individual
transaction, which may involve one or more items, equals twenty-five dollars or more.
5. The refund is fifteen dollars or more. Qualifying sales may be accumulated for periods
not in excess of one calendar year in order to reach the fifteen dollar limit.

6. Notwithstanding section 57-39.2-23, the commissioner may provide names and
addresses of Canadian residents claiming a North Dakota sales tax refund to the
director of the department of commerce division of tourism.
### § 57-39.2-29. Sourcing - Multiple points of use exemption.

Repealed by S.L. 2007, ch. 528, § 24.
### § 57-39.2-30. Conditional sales contract.

For purposes of the tax imposed by this chapter, on any sale made under a conditional
sales contract or under other forms of sale in which the payment of the principal sum is
extended over a period longer than sixty days from the date of sale, only the portion of the sale
amount that has actually been received in cash by the retailer during each reporting period is
subject to the tax imposed by this chapter during that reporting period.
### § 57-39.2-31. Seller and certified service provider limited immunity.

A seller or certified service provider is immune from civil liability for charging and collecting
the incorrect amount of sales or use tax in reliance on incorrect information provided by the tax
commissioner regarding tax rates, boundaries, or taxing jurisdiction assignments. The tax
commissioner will not be required to provide liability relief for errors resulting from the reliance
on an address-based system for assigning tax jurisdictions as provided under the agreement
adopted under chapter 57-39.4.
### § 57-39.2-32. Confidentiality of information obtained by certified service providers.

A certified service provider or any agent, employee, or other person acting under the
authority of a certified service provider may not divulge or make known in any manner
whatsoever the business affairs, operations, or information obtained by the certified service
provider in the discharge of its duties under this chapter.
