# Title 57 — Taxation

## Chapter 57-38 — Income Tax

### § 57-38-01. Definitions.

As used in this chapter, unless the context or subject matter otherwise requires:
1. "Chronically mentally ill" means a person who, as a result of a mental disorder, exhibits
emotional or behavioral functioning which is so impaired as to interfere substantially
with the person's capacity to remain in the community without verified supportive
treatment or services of a long-term or indefinite duration. This mental disability must
be severe and persistent, resulting in a long-term limitation of the person's functional
capacities for primary activities of daily living such as interpersonal relationships,
homemaking, self-care, employment, and recreation.
2. "Corporation" includes associations, business trusts, joint stock companies, and
insurance companies.
3. "Developmental disability" has the same meaning as defined in section 25-01.2-01.
4. "Domestic" when applied to a corporation means created or organized under the laws
of North Dakota.
5. "Federal Internal Revenue Code of 1954, as amended", "United States Internal
Revenue Code of 1954, as amended", and "Internal Revenue Code of 1954, as
amended", mean the United States Internal Revenue Code of 1986, as amended.
Reference to the Internal Revenue Code of 1954, as amended, includes a reference to
the United States Internal Revenue Code of 1986, as amended, and reference to the
United States Internal Revenue Code of 1986, as amended, includes a reference to
the provisions of law formerly known as the Internal Revenue Code of 1954, as
amended.
a. Except that the provisions of section 168(f)(8) of the Internal Revenue Code of
1954, as amended, are not adopted in those instances when the minimum
investment by the lessor is less than one hundred percent for the purpose of
computing North Dakota taxable income for individuals, estates, trusts, and
corporations for taxable years beginning on or after January 1, 1983. Therefore,
federal taxable income must be increased, or decreased, as the case may be, to
reflect the adoption or nonadoption of the provisions of section 168(f)(8) of the
Internal Revenue Code of 1954, as amended, and such adjustments must be
made before computing income subject to apportionment.
b. Provided, that one-half of the amount not allowed as an accelerated cost
recovery system depreciation deduction for the taxable year beginning after
December 31, 1982, may be deducted from federal taxable income in each of the
next two taxable years beginning after December 31, 1985, and one-half of the
amount not allowed as an accelerated cost recovery system depreciation
deduction for the taxable year beginning after December 31, 1983, may be
deducted from federal taxable income in each of the next two years beginning
after December 31, 1987, and one-half of the amount not allowed as an
accelerated cost recovery system depreciation deduction for the taxable year
beginning after December 31, 1984, may be deducted from federal taxable
income in each of the next two taxable years beginning after December 31, 1989.
All such adjustments must be made before computing income subject to
apportionment.
c. Provided, that the depreciation adjustments allowed in subdivision b shall be
limited to those eligible assets acquired during taxable years beginning after
December 31, 1982. Acquisitions made before taxable years beginning
January 1, 1983, must be depreciated pursuant to the methods permissible under
Internal Revenue Code provisions in effect prior to January 1, 1981.
d. Except that for purposes of applying the Internal Revenue Code of 1954, as
amended, with respect to actual distributions made after December 31, 1984, by
a domestic international sales corporation, or former domestic international sales
corporation, which was a domestic international sales corporation on

December 31, 1984, any accumulated domestic international sales corporation
income of a domestic international sales corporation, or former domestic
international sales corporation, which is derived before January 1, 1985, may not
be treated as previously taxed income.
6. "Foreign" when applied to a corporation means created or organized outside of North
Dakota.
7. "Mental disorder" means a substantial disorder of the person's emotional processes,
thought, cognition, or memory. Mental disorder is distinguished from:
a. Conditions which are primarily those of drug abuse, alcoholism, or intellectual
disability, unless in addition to one or more of these conditions, the person has a
mental disorder.
b. The declining mental abilities that accompany impending death.
c. Character and personality disorders characterized by lifelong and deeply
ingrained antisocial behavior patterns, including sexual behaviors which are
abnormal and prohibited by statute, unless the behavior results from a mental
disorder.
8. "Passthrough entity" means a corporation that for the applicable tax year is treated as
an S corporation under the Internal Revenue Code, a limited liability company that for
the applicable tax year is not taxed as a corporation for federal income tax purposes, a
general partnership, limited partnership, limited liability partnership, limited liability
limited partnership, trust, or a similar entity that passes its income, deductions, and
credits through to its owners.
9. "Person" includes individuals, fiduciaries, partnerships, corporations, and limited
liability companies, and other entities recognized by the laws of this state.
10. "Qualified investment fund" means any regulated investment company as defined
under the Internal Revenue Code, which for the calendar year in which the distribution
is paid:
a. Has investments in interest-bearing obligations issued by or on behalf of this
state, any political subdivision of this state, or the United States government; and
b. Has provided the tax commissioner with a detailed schedule of the assets
contained in its investment portfolio and a schedule of the income attributable to
each asset in its investment portfolio for the calendar year.
11. "Resident" applies only to natural persons and includes, for the purpose of determining
liability for the tax imposed by this chapter upon or with reference to the income of any
income year, any person domiciled in the state of North Dakota and any other person
who maintains a permanent place of abode within the state and spends in the
aggregate more than seven months of the income year within the state. A full-time
active duty member of the armed forces assigned to a military installation in this state,
or the member's spouse, is not a "resident" of this state for purposes of this chapter
simply by reason of having voted in an election in this state.
12. "Tax commissioner" means the state tax commissioner.
13. "Taxable income" in the case of individuals, estates, trusts, and corporations means
the taxable income as computed for an individual, estate, trust, or corporation for
federal income tax purposes under the United States Internal Revenue Code of 1954,
as amended, plus or minus the adjustments as may be provided by this chapter or
other provisions of law. Except as otherwise expressly provided, "taxable income"
does not include any amount computed for federal alternative minimum tax purposes.
14. "Taxpayer" includes any individual, corporation, or fiduciary subject to a tax imposed
by this chapter.
15. Any term, as used in this code, as it pertains to the filing and reporting of income,
deductions, or exemptions or the paying of North Dakota income tax, has the same
meaning as when used in a comparable context in the laws of the United States
relating to federal income taxes, unless a different meaning is clearly required or
contemplated.

### § 57-38-01.1. Declaration of legislative intent.

It is the intent of the legislative assembly to simplify the state income tax laws and to
demonstrate that federal legislation is not necessary to deal with certain interstate tax problems,
by adopting the federal definition of taxable income as the starting point for the computation of
state income tax by all taxpayers and providing the necessary adjustments thereto to
substantially preserve and maintain existing exemptions and deductions. It is the further intent
of the legislative assembly to eliminate double taxation of the earnings of small corporations by
recognizing a subchapter S election when made for federal income tax purposes.
### § 57-38-01.2. Adjustments to taxable income for individuals and fiduciaries.

Repealed by S.L. 2009, ch. 545, § 32.
### § 57-38-01.3. Adjustments to taxable income for corporations.

1. The taxable income of a corporation as computed pursuant to the provisions of the
Internal Revenue Code of 1954, as amended, must be:
a. Reduced by any interest received from obligations of the United States that is
included in taxable income or in the computation thereof on the federal return.
b. Reduced by any other income included in the taxable income, or in the
computation thereof, on the federal return which is exempt from taxation by this
state because of the provisions of the Constitution of North Dakota or the
Constitution of the United States.
c. Increased by the amount of any income taxes, including income taxes of foreign
countries, or franchise or privilege taxes measured by income, to the extent that
such taxes were deducted to determine federal taxable income.
d. Increased by the amount of any interest and dividends from foreign securities and
from securities of state and their political subdivisions exempt from federal
income tax, provided that interest upon obligations of the state of North Dakota or
any of its political subdivisions may not be included.
e. Reduced by the amount of net income not allocated and apportioned to this state
under the provisions of chapter 57-38.1, but only to the extent that the amount of
net income not allocated and apportioned to this state under the provisions of that
chapter is not included in any adjustment made pursuant to the preceding
subdivisions.
f. Repealed by S.L. 2003, ch. 529, § 3.
g. Increased by the amount of any special deductions and net operating loss
deductions to the extent that these items were deducted in determining federal
taxable income.
h. Reduced by dividends paid, as defined in section 561 of the Internal Revenue
Code of 1986, as amended, by a regulated investment company or a fund of a
regulated investment company as defined in section 851(a) or 851(g) of the
Internal Revenue Code of 1986, as amended, except that the deduction for
dividends paid is not allowed with respect to dividends attributable to any income
that is not subject to taxation under this chapter when earned by the regulated
investment company. Sections 852(b)(7) and 855 of the Internal Revenue Code
of 1986, as amended, apply for computing the deduction for dividends paid. A
regulated investment company is not allowed a deduction for dividends received
as defined in sections 243 through 245 of the Internal Revenue Code of 1986, as
amended.
i. Except for a cooperative described in this subsection, increased by the amount of
the deduction allowable under section 199 of the Internal Revenue Code
[26 U.S.C. 199], but only to the extent of the deduction taken to determine federal
taxable income. For a cooperative that has elected to pass the deduction through
to its patrons under section 199(d)(3), of the Internal Revenue Code [26 U.S.C.
199(d)(3)], the increase under this subsection does not include the amount
passed through to its patrons.

j. For taxable years 2005 and 2006, increased by the amount of extraterritorial
income as defined in section 114 of the Internal Revenue Code [26 U.S.C. 114],
that is excluded under sections 101(d), 101(e), and 101(f) of Pub. L. 108-357
[118 Stat. 1418], but only to the extent the income was excluded in determining
federal taxable income.
k. Reduced, for an interest charge domestic international sales corporation without
economic substance owned by individuals or passthrough entities, by the amount
of actual or deemed distributions of the interest charge domestic international
sales corporation to its owners. For purposes of this subsection, "without
economic substance" means, in the case of an interest charge domestic
international sales corporation subject to Internal Revenue Code section 992, that
the interest charge domestic international sales corporation has elected to use
intercompany pricing rules of Internal Revenue Code section 994, rather than the
Internal Revenue Code section 482 method. For purposes of this subsection, a
passthrough entity means an entity that for the applicable tax year is treated as
an S corporation under this chapter or a cooperative, general partnership, limited
partnership, limited liability partnership, trust, or limited liability company that for
the applicable tax year is not taxed as a corporation under this chapter.
l. Increased by the amount of the dividends paid deduction otherwise allowed under
section 857 of the Internal Revenue Code of 1986, as amended, if the real estate
investment trust is a captive real estate investment trust.
(1) For purposes of this subdivision:
(a) "Captive real estate trust" means a real estate investment trust the
shares or beneficial interests of which are not regularly traded on an
established securities market, and more than fifty percent of the voting
power or value of the beneficial interests or shares of the real estate
investment trust are owned or controlled, directly, indirectly, or
constructively, by a single entity that is:
[1] Treated as an association taxable as a corporation under the
Internal Revenue Code of 1986, as amended; and
[2] Not exempt from federal income taxation under section 501(a) of
the Internal Revenue Code of 1986, as amended.
(b) "Listed Australian property trust" means an Australian unit trust
registered as a managed investment scheme under the Australian
Corporations Act in which the principal class of units is listed on a
recognized stock exchange in Australia, and is regularly traded on an
established securities market, or an entity organized as a trust,
provided that a listed Australian property trust owns or controls,
directly or indirectly, seventy-five percent or more of the voting power
or value of the beneficial interests or shares of such trust.
(c) "Qualified foreign entity" means a corporation, trust, association, or
partnership organized outside the laws of the United States, and
which satisfies all of the following criteria:
[1] At least seventy-five percent of the entity's total asset value at
the close of its taxable year is represented by real estate assets
as defined in section 856(c)(5)(B) of the Internal Revenue Code
of 1986, as amended, including shares or certificates of
beneficial interest in any real estate investment trust, cash and
cash equivalents, and United States government securities;
[2] The entity is not subject to tax on amounts distributed to its
beneficial owners or is exempt from entity level taxation;
[3] The entity distributes at least eighty-five percent of its taxable
income, as computed in the jurisdiction in which it is organized,
to the holders of its shares or certificates of beneficial interest on
an annual basis;

[4] Not more than ten percent of the voting power or value in the
entity is held directly or indirectly or constructively by a single
entity or individual, or the shares or beneficial interests of such
entity are regularly traded on an established securities market;
and
[5] The entity is organized in a country that has a tax treaty with the
United States.
(d) "Real estate investment trust" has the meaning ascribed in
section 856 of the Internal Revenue Code of 1986, as amended.
(2) For the purposes of applying subparagraph a of paragraph 1, the following
entities are not considered an association taxable as a corporation:
(a) A real estate investment trust other than a captive real estate
investment trust;
(b) A qualified real estate investment trust subsidiary under subsection i of
section 856 of the Internal Revenue Code of 1986, as amended, other
than a qualified real estate investment trust subsidiary of a captive real
estate investment trust;
(c) A listed Australian property trust; and
(d) A qualified foreign entity.
(3) A real estate investment trust that is intended to be regularly traded on an
established securities market and that satisfies the requirements of
sections 856(a)(5), 856(a)(6), and 856(h)(2) of the Internal Revenue Code of
1986, as amended, shall not be deemed a captive real estate investment
trust within the meaning of this subdivision.
(4) A real estate investment trust that does not become regularly traded on an
established securities market within one year of the date on which it first
became a real estate investment trust shall be deemed not to have been
regularly traded on an established securities market, retroactive to the date
it first became a real estate investment trust, and shall file an amended
return reflecting the retroactive designation for any tax year or part-year
occurring during its initial year of status as a real estate investment trust. For
purposes of this subdivision, a real estate investment trust becomes a real
estate investment trust on the first day that it has both met the requirements
of section 856 of the Internal Revenue Code of 1986, as amended, and has
elected to be treated as a real estate investment trust under section 856(c)
(1) of the Internal Revenue Code of 1986, as amended.
(5) For purposes of this subdivision, the constructive ownership rules of
section 318(a) of the Internal Revenue Code of 1986, as amended, as
modified by section 856(d)(5) of the Internal Revenue Code of 1986, as
amended, apply in determining the ownership of stock, assets, or net profits
of any person.
Provided, however, that each adjustment in the above subdivisions authorized under
law is allowed only to the extent that the adjustment is allocated and apportioned to
North Dakota income.
2. The tax commissioner is hereby authorized to prescribe rules and regulations to
prevent requiring income that had been previously taxed under this chapter from being
taxed again because of the provisions of this chapter and to prescribe rules and
regulations to prevent any income from becoming exempt from taxation because of the
provisions of this chapter if it would otherwise have been subject to taxation under the
provisions of this chapter.
3. The sum calculated pursuant to subsection 1 must be reduced by the amount of any
net operating loss that is attributable to North Dakota sources, including a net
operating loss calculated under chapter 57-35.3 for tax years beginning before
January 1, 2013. If the net operating loss that is attributable to North Dakota sources
exceeds the sum calculated pursuant to subsection 1, the excess may be carried
forward for the same time period that an identical federal net operating loss may be

carried forward. If a corporation uses an apportionment formula to determine the
amount of income that is attributable to North Dakota, the corporation must use the
same formula to determine the amount of net operating loss that is attributable to
North Dakota. In addition, no deduction may be taken for a carryforward when
determining the amount of net operating loss that is attributable to North Dakota
sources.
### § 57-38-01.4. Recognition of subchapter S election.

1. For the purposes of this chapter, any person as defined in section 57-38-01 and
required to file a North Dakota income tax return who makes an election under
subchapter S of the Internal Revenue Code of 1954, as amended, for federal income
tax purposes shall have such status recognized and such person's taxable income
must be computed as provided in subchapter S of the Internal Revenue Code of 1954,
as amended, with the adjustments allowed by this chapter or other provisions of law.
Income of a subchapter S corporation subject to tax for federal income tax purposes is
also subject to state income tax at the corporate income tax rates imposed by section
57-38-30.
2. The distributed and undistributed taxable income of an electing small business
corporation for federal and state income tax purposes derived from or connected with
sources in this state does constitute income derived from sources within this state for a
nonresident person who is a shareholder of such a corporation, and a net operating
loss of such corporation derived from or connected with sources in this state does
constitute a loss or deduction connected with sources in this state for such a
nonresident individual.
### § 57-38-01.5. Crop insurance proceeds - Option to postpone for income tax purposes.

Repealed by S.L. 1983, ch. 630, § 2.
### § 57-38-01.6. Deduction for contributions to retirement plans.

Repealed by S.L. 1983, ch. 630, § 2.
### § 57-38-01.7. Income tax credit for charitable contributions - Limitation.

1. At the election of the taxpayer, there must be allowed, subject to the applicable
limitations provided in this subsection, as a nonrefundable credit against the income
tax liability under section 57-38-30 or 57-38-30.3 for the taxable year, an amount equal
to fifty percent of the aggregate amount of charitable contributions made by the
taxpayer during the year to nonprofit private institutions of higher education located
within the state or to the North Dakota independent college fund. The amount
allowable as a credit under this subsection for any taxable year may not exceed fifty
percent of the taxpayer's total income tax under this chapter for the year, or two
thousand five hundred dollars, whichever is less.
2. At the election of the taxpayer, there must be allowed, subject to the applicable
limitations provided in this subsection, as a nonrefundable credit against the income
tax liability under section 57-38-30 or 57-38-30.3 for the taxable year, an amount equal
to fifty percent of the aggregate amount of charitable contributions made by the
taxpayer during the year directly to nonprofit private institutions of secondary
education, located within the state. The amount allowable as a credit under this
subsection for any taxable year may not exceed fifty percent of the taxpayer's total
income tax under this chapter for the year, or two thousand five hundred dollars,
whichever is less.
3. At the election of the taxpayer, there must be allowed, subject to the applicable
limitations provided in this subsection, as a nonrefundable credit against the income
tax liability under section 57-38-30 or 57-38-30.3 for the taxable year, an amount equal
to fifty percent of the aggregate amount of charitable contributions made by the
taxpayer during the year directly to nonprofit private institutions of primary education,

located within the state. The amount allowable as a credit under this subsection for
any taxable year may not exceed fifty percent of the taxpayer's total income tax under
this chapter for the year, or two thousand five hundred dollars, whichever is less.
4. A passthrough entity entitled to a credit under this section must be considered to be
the taxpayer for purposes of this section and the amount of the credit allowed must be
determined at the passthrough entity level. The amount of the total credit determined
at the entity level must be passed through to the partners, shareholders, or members
in proportion to their respective interests in the passthrough entity.
5. For purposes of this section, the term "nonprofit private institution of higher education"
means only a nonprofit private educational institution located in the state of North
Dakota which normally maintains a regular faculty and curriculum, which normally has
a regularly organized body of students in attendance at the place where its educational
activities are carried on, and which regularly offers education at a level above the
twelfth grade. The term "nonprofit private institution of secondary education" means
only a nonprofit private educational institution located in North Dakota which normally
maintains a regular faculty and curriculum approved by the state department of public
instruction, which normally has a regularly organized body of students in attendance at
the place where its educational activities are carried on, and which regularly offers
education to students in the ninth through the twelfth grades. The term "nonprofit
private institution of primary education" means only a nonprofit private educational
institution located in North Dakota which normally maintains a regular faculty and
curriculum approved by the state department of public instruction, which normally has
a regularly organized body of students in attendance at the place where its educational
activities are carried on, and which regularly offers education to students in
kindergarten through eighth grade.
6. For purposes of this section, a taxpayer may elect to treat a contribution as made in
the preceding taxable year if the contribution and election are made not later than the
time prescribed in section 57-38-34 for filing the return for that taxable year, including
extensions granted by the commissioner.
### § 57-38-01.8. Income tax credit for installation of geothermal, solar, wind, or biomass

energy devices.
1. A taxpayer filing a North Dakota income tax return pursuant to the provisions of this
chapter may claim a credit against the tax liability under section 57-38-30 for the cost
of a geothermal, solar, or biomass energy device installed before January 1, 2015, in a
building or on property owned or leased by the taxpayer in North Dakota. A wind
energy device on which construction was commenced before January 1, 2015, and
which is installed before January 1, 2017, is eligible for the credit provided in this
section. The credit for a device installed before January 1, 2001, must be in an amount
equal to five percent per year for three years, and for a device installed after
December 31, 2000, must be in an amount equal to three percent per year for five
years of the actual cost of acquisition and installation of the geothermal, solar, wind, or
biomass energy device and must be subtracted from any income tax liability of the
taxpayer as determined pursuant to the provisions of this chapter.
2. For the purposes of this section:
a. "Biomass energy device" means a system using agricultural crops, wastes, or
residues; wood or wood wastes or residues; animal wastes; landfill gas; or other
biological sources to produce fuel or electricity.
b. "Geothermal energy device" means a system or mechanism or series of
mechanisms designed to provide heating or cooling or to produce electrical or
mechanical power, or any combination of these, by a method which extracts or
converts the energy naturally occurring beneath the earth's surface in rock
structures, water, or steam.
c. "Solar or wind energy device" means a system or mechanism or series of
mechanisms designed to provide heating or cooling or to produce electrical or

mechanical power, or any combination of these, or to store any of these, by a
method which converts the natural energy of the sun or wind.
3. If a geothermal, solar, wind, or biomass energy device is a part of a system which uses
other means of energy, only that portion of the total system directly attributable to the
cost of the geothermal, solar, wind, or biomass energy device may be included in
determining the amount of the credit. The costs of installation may not include costs of
redesigning, remodeling, or otherwise altering the structure of a building in which a
geothermal, solar, wind, or biomass energy device is installed.
4. A partnership, subchapter S corporation, limited partnership, limited liability company,
or any other passthrough entity that installs a geothermal, solar, wind, or biomass
energy device in a building or on property owned or leased by the passthrough entity
must be considered to be the taxpayer for purposes of this section, and the amount of
the credit allowed with respect to the entity's investments must be determined at the
passthrough entity level. The amount of the total credit determined at the entity level
must be passed through to the corporate partners, shareholders, or members in
proportion to their respective interests in the passthrough entity.
5. If a taxpayer entitled to the credit provided by this section is a member of a group of
corporations filing a North Dakota consolidated tax return using the combined
reporting method, the credit may be claimed against the aggregate North Dakota tax
liability of all of the corporations included in the North Dakota consolidated return.
6. a. The credit allowed under this section may not exceed the liability for tax under
this chapter. If the amount of credit determined under this section exceeds the
liability for tax under this chapter, the excess may be used as a credit carryover to
each of the five succeeding taxable years.
b. Any excess tax credits earned for wind energy devices installed after
September 30, 2008, and before January 1, 2012, may be used as a credit
carryover to each of the thirty succeeding taxable years.
c. For any tax credits for geothermal, solar, or biomass energy devices installed
after September 30, 2008, and wind energy devices installed after December 31,
2011, the excess may be used as a credit carryover to each of the ten
succeeding taxable years.
7. For geothermal, solar, wind, or biomass energy devices installed after December 31,
2006, if ownership of a device is transferred at the time installation is complete and the
device is fully operational, the purchaser of the device is eligible for the tax credit
under this section. Subsequent purchasers of the device are not eligible for the tax
credit.
8. An individual taxpayer filing a North Dakota return pursuant to the provisions of this
chapter may claim a credit against the tax liability under section 57-38-30.3 for the cost
of a geothermal energy device installed after December 31, 2008, and before
January 1, 2015, in a building or on property owned or leased by the taxpayer in North
Dakota. The credit must be in an amount equal to three percent per year for five years
of the actual cost of acquisition and installation of the geothermal energy device.
### § 57-38-01.9. Deduction of contributions to individual retirement account.

Repealed by S.L. 1983, ch. 630, § 2.
### § 57-38-01.10. Deferral of crop disaster payments and proceeds of livestock sold on

account of drought.
Repealed by S.L. 1983, ch. 630, § 2.
### § 57-38-01.11. Reporting net operating loss.

Repealed by S.L. 1983, ch. 630, § 2.
### § 57-38-01.12. Reporting of investment credit carryback for prior taxable years.

Repealed by S.L. 1983, ch. 628, § 2.

### § 57-38-01.13. Taxation of the gain or loss resulting from the sale of a principal

residence.
Any gain or loss resulting from the sale or exchange of a principal residence in this state by
a taxpayer who reinvests in another principal residence outside of this state must be treated in
the same way for state income tax purposes as it is treated for federal income tax purposes.
### § 57-38-01.14. No gain recognized on property subject to eminent domain sale or

transfer.
If any private property, through the exercise of eminent domain, is involuntarily converted
into property of either like or unlike kind, no gain, either ordinary or capital, may be recognized
for corporate income tax purposes.
### § 57-38-01.15. Proration and itemization of deductions and exemptions.

Repealed by S.L. 1989, ch. 710, § 4.
### § 57-38-01.16. Income tax credit for employment of individuals with developmental

disabilities or severe mental illness.
1. A taxpayer filing an income tax return under this chapter may claim a credit against the
tax liability imposed under section 57-38-30 or section 57-38-30.3 for a portion of the
wages paid to an employee with a developmental disability or a severe mental illness.
2. The credit allowed under this section equals twenty-five percent of up to six thousand
dollars in wages paid annually by the taxpayer for each employee with a
developmental disability or severe mental illness, if the department of health and
human services' vocational rehabilitation division determines the individual has a most
significant disability, is eligible for services, and requires customized employment or
supported employment to obtain competitive integrated employment.
3. Only wages actually paid during the taxpayer's taxable year may be considered for
purposes of this section. An employee of a subcontractor is considered an employee
of the contractor to the extent of any wages paid under the contract.
4. The total of credits allowed under this section may not exceed fifty percent of the
taxpayer's liability under this chapter.
5. A taxpayer shall apply, on a form and in the manner prescribed by the department of
health and human services' vocational rehabilitation division, for a determination of
whether an employee meets the requirements under subsection 2. If an employee
meets the requirements, a letter of certification containing the names of the taxpayer
and the qualifying employee must be issued to the taxpayer.
6. A taxpayer claiming a credit under this section shall include a copy of the certification
letter received from the department of health and human services' vocational
rehabilitation division with the taxpayer's return filed under this chapter for each
taxable year the credit is claimed.
7. A passthrough entity entitled to the credit under this section must be considered to be
the taxpayer for purposes of calculating the credit. The amount of the allowable credit
must be determined at the passthrough entity level. The total credit determined at the
entity level must be passed through to the partners, shareholders, or members in
proportion to their respective interests in the passthrough entity. An individual taxpayer
may take the credit passed through under this section against the individual's state
income tax liability under section 57-38-30.3.
### § 57-38-01.17. Credit for investments in development corporations.

Repealed by S.L. 2017, ch. 85, § 2.
### § 57-38-01.18. Gain on stock sale or transfer when corporation has relocated to this

state.
Repealed by S.L. 2009, ch. 545, § 32.

### § 57-38-01.19. Income tax credit for alternative fuel motor vehicle conversion

equipment.
Expired under S.L. 1993, ch. 555, § 3.
### § 57-38-01.20. Credit for expenses of caring for certain family members.

1. An individual is entitled to a credit against the tax imposed under section 57-38-30.3 in
the amount of qualified care expenses under this section paid by the individual for the
care of a qualifying family member during the taxable year.
2. A qualifying family member is an individual who has taxable income of twenty
thousand dollars or less or a married individual with taxable income of thirty-five
thousand dollars or less, including that of the individual's spouse, for the taxable year.
A qualifying family member must be related to the taxpayer by blood or marriage and
either sixty-five years of age or older or is disabled as defined under title XVI of the
federal Social Security Act.
3. a. Qualified care expenses include payments by the taxpayer for home health
agency services, companionship services, personal care attendant services,
homemaker services, adult day care, respite care, and other expenses that are
deductible medical expenses under the Internal Revenue Code. A qualified care
expense must be:
(1) Provided to or for the benefit of the qualifying family member or to assist the
taxpayer in caring for the qualifying family member;
(2) Provided by an organization or individual not related to the taxpayer or the
qualifying family member; and
(3) Not compensated for by insurance or federal or state assistance programs.
b. For purposes of this subsection, "companionship services" means services that
provide fellowship, care, and protection for individuals who, because of advanced
age or physical or mental disabilities, cannot care for their own needs. Those
services may include household work related to the care of the aged or disabled
person, including meal preparation, bed making, washing of clothes, and other
similar services, and may include the performance of general household work if
that work does not exceed twenty percent of the total weekly hours worked.
"Companionship services" does not include services relating to the care and
protection of the aged or disabled which require and are performed by trained
personnel, including a registered or practical nurse, and does not include services
of individuals who provide care and protection for infants and young children who
are not physically or mentally disabled.
4. The percentage amount of credit allowable under this section is:
a. For a taxpayer whose taxable income does not exceed twenty-five thousand
dollars, or thirty-five thousand dollars for a joint return, thirty percent of qualified
elderly care expenses; or
b. For a taxpayer whose taxable income exceeds twenty-five thousand dollars, or
thirty-five thousand dollars for a joint return, the greater of:
(1) Twenty percent of qualified elderly care expenses; or
(2) Thirty percent of qualified elderly care expenses, minus one percent of
those expenses for each two thousand dollars or fraction of two thousand
dollars by which the taxable income of the taxpayer for the taxable year
exceeds twenty-five thousand dollars, or thirty-five thousand dollars for a
joint return.
5. The dollar amount of credit allowable under this section is:
a. Reduced by one dollar for each dollar of the taxable income over fifty thousand
dollars for a taxpayer whose taxable income exceeds fifty thousand dollars, or for
a joint return, reduced by one dollar for each dollar of the taxable income over
seventy thousand dollars for taxpayers whose taxable income exceeds seventy
thousand dollars; and

b. Limited to two thousand dollars per qualifying family member in a taxable year
and to four thousand dollars total for two or more qualifying family members in a
taxable year.
6. A deduction or credit is not allowed under any other provision of this chapter with
respect to any amount for which a credit is allowed under this section. The credit
allowed under this section may not be claimed as a carryback or carryforward and may
not be refunded if the taxpayer has no tax liability.
7. In the case of a married individual filing a separate return, the percentage amount of
credit under subsection 4 and the dollar amount of credit under subsection 5 are
limited to one-half of the amounts indicated in those subsections.
### § 57-38-01.21. Charitable gifts, planned gifts, and qualified endowments credit -

Definitions.
1. For purposes of this section:
a. "Permanent, irrevocable fund" means a fund comprising cash, securities, mutual
funds, or other investment assets established for a specific charitable, religious,
educational, or eleemosynary purpose and invested for the production or growth
of income, or both, which may either be added to principal or expended.
b. "Planned gift" means an irrevocable charitable gift to a North Dakota qualified
nonprofit organization or qualified endowment held by or for a North Dakota
qualified nonprofit organization, when the charitable gift uses any of the following
techniques that are authorized under the Internal Revenue Code:
(1) Charitable remainder unitrusts, as defined by 26 U.S.C. 664;
(2) Charitable remainder annuity trusts, as defined by 26 U.S.C. 664;
(3) Pooled income fund trusts, as defined by 26 U.S.C. 642(c)(5);
(4) Charitable lead unitrusts qualifying under 26 U.S.C. 170(f)(2)(B);
(5) Charitable lead annuity trusts qualifying under 26 U.S.C. 170(f)(2)(B);
(6) Charitable gift annuities undertaken pursuant to 26 U.S.C. 1011(b);
(7) Deferred charitable gift annuities undertaken pursuant to 26 U.S.C. 1011(b);
(8) Charitable life estate agreements qualifying under 26 U.S.C. 170(f)(3)(B); or
(9) Paid-up life insurance policies meeting the requirements of 26 U.S.C. 170.
"Planned gift" does not include a charitable gift using a charitable remainder
unitrust or charitable remainder annuity trust unless the agreement provides that
the trust may not terminate and beneficiaries' interest in the trust may not be
assigned or contributed to the qualified nonprofit organization or qualified
endowment sooner than the earlier of the date of death of the beneficiaries or five
years from the date of the planned gift.
"Planned gift" does not include a deferred charitable gift annuity unless the
payment of the annuity is required to begin within the life expectancy of the
annuitant or of the joint life expectancies of the annuitants, if more than one
annuitant, as determined using the actuarial tables used by the internal revenue
service in determining federal charitable income tax deductions on the date of the
planned gift.
"Planned gift" does not include a charitable gift annuity or deferred charitable
gift annuity unless the annuity agreement provides that the interest of the
annuitant or annuitants in the gift annuity may not be assigned to the qualified
nonprofit organization or qualified endowment sooner than the earlier of the date
of death of the annuitant or annuitants or five years after the date of the planned
gift.
"Planned gift" does not include a charitable gift annuity or deferred charitable
gift annuity unless the annuity is a qualified charitable gift annuity for federal
income tax purposes.
c. "Qualified endowment" means a permanent, irrevocable fund held by:
(1) A North Dakota incorporated or established organization that is:
(a) A qualified nonprofit organization; or

(b) A bank or trust company holding the fund on behalf of a qualified
nonprofit organization; or
(2) An organization incorporated or established in a state bordering North
Dakota that is:
(a) A tax-exempt organization under 26 U.S.C. 501(c) to which
contributions qualify for federal charitable income tax deductions
which was incorporated or established for the support and benefit of a
hospital, nursing home, or medical center, or a facility providing any
combination of those services, which is located outside North Dakota
but within five miles of a North Dakota city of five thousand or more
population in which there is no hospital; or
(b) A bank or trust company holding the fund on behalf of an organization
that meets the conditions of subparagraph a.
d. "Qualified nonprofit organization" means a North Dakota incorporated or
established tax-exempt organization under 26 U.S.C. 501(c) to which
contributions qualify for federal charitable income tax deductions with an
established business presence or situs in North Dakota.
2. a. An individual is allowed a tax credit against the tax imposed by section
aggregate amount of the charitable gift portion of planned gifts made by the
taxpayer during the taxable year to a qualified nonprofit organization or qualified
endowment. The maximum credit that may be claimed under this subsection for
planned gifts made in a taxable year is ten thousand dollars for an individual, or
twenty thousand dollars for married individuals filing a joint return. The credit
allowed under this section may not exceed the taxpayer's income tax liability.
b. An individual is allowed a tax credit against the tax imposed by section
equal to forty percent of the charitable gift. If an individual makes a single
charitable gift to a qualified endowment, the charitable gift must be five thousand
dollars or more to qualify for the credit. If an individual makes more than one
charitable gift to the same qualified endowment, the aggregate amount of the
charitable gifts made to that qualified endowment must be five thousand dollars
or more to qualify for the credit. The maximum credit that may be claimed under
this subsection for charitable gifts made in a taxable year is ten thousand dollars
for an individual or twenty thousand dollars for married individuals filing a joint
return. The tax credit allowed under this section may not exceed the taxpayer's
income tax liability.
3. A corporation is allowed a tax credit against the tax imposed by section 57-38-30 in an
amount equal to forty percent of a charitable gift to a qualified endowment. The
maximum credit that may be claimed by a corporation under this subsection for
charitable gifts made in a taxable year is ten thousand dollars. The credit allowed
under this section may not exceed the corporate taxpayer's income tax liability.
4. An estate or trust is allowed a tax credit in an amount equal to forty percent of a
charitable gift to a qualified endowment. The maximum credit that may be claimed
under this subsection for charitable gifts made in a taxable year is ten thousand
dollars. The allowable credit must be apportioned to the estate or trust and to its
beneficiaries on the basis of the income of the estate or trust allocable to each, and
the beneficiaries may claim their share of the credit against the tax imposed by section
taxable year in which the taxable year of the estate or trust ends. Subsections 6 and 7
apply to the estate or trust and its beneficiaries with respect to their respective shares
of the apportioned credit.
5. A passthrough entity is entitled to a credit in an amount equal to forty percent of a
charitable gift to a qualified endowment by the entity during the taxable year. The
maximum credit that may be claimed by the entity under this subsection for charitable
gifts made in a taxable year is ten thousand dollars. The credit determined at the entity

level must be passed through to the partners, shareholders, or members in the same
proportion that the charitable contributions attributable to the charitable gifts under this
section are distributed to the partners, shareholders, or members. The partner,
shareholder, or member may claim the credit only in the partner's, shareholder's, or
member's taxable year in which the taxable year of the passthrough entity ends.
Subsections 6 and 7 apply to the partner, shareholder, or member.
6. The amount of the charitable gift upon which an allowable credit is computed must be
added to federal taxable income in computing North Dakota taxable income in any
taxable year in which the charitable gift reduces federal taxable income, but only to the
extent that the charitable gift reduced federal taxable income.
7. The unused portion of a credit under this section may be carried forward for up to
three taxable years.
8. If a charitable gift for which a credit was claimed is recovered by the taxpayer, an
amount equal to the credit claimed in all taxable years must be added to the tax due
on the income tax return filed for the taxable year in which the recovery occurs. For
purposes of subsection 4, this subsection applies if the estate or trust recovers the
charitable gift and the estate or trust and its beneficiaries are liable for the additional
tax due with respect to their respective shares of the apportioned credit. For purposes
of subsection 5, this subsection applies if the partnership, subchapter S corporation, or
limited liability company recovers the charitable gift, and the partner, shareholder, or
member is liable for the additional tax due.
9. A charitable gift used as the basis for a credit claimed under this section may not be
used as the basis for the claim of a credit under any other provision of this chapter.
### § 57-38-01.22. Income tax credit for blending of biodiesel fuel or green diesel fuel.

A fuel supplier licensed pursuant to section 57-43.2-05 who blends biodiesel fuel or green
diesel fuel in this state is entitled to a credit against tax liability determined under section
green diesel fuel of at least five percent blend, otherwise known as B5. For purposes of this
section, "biodiesel" and "green diesel" mean fuel as defined in section 57-43.2-01. The credit
under this section may not exceed the taxpayer's liability as determined under this chapter for
the taxable year and each year's unused credit amount may be carried forward for up to five
taxable years.
A passthrough entity entitled to the credit under this section must be considered to be the
taxpayer for purposes of this section, and the amount of the credit allowed must be determined
at the passthrough entity level. The amount of the total credit determined at the entity level must
be passed through to the partners, shareholders, or members in proportion to their respective
interests in the passthrough entity.
### § 57-38-01.23. Income tax credit for biodiesel or green diesel sales equipment costs.

A seller of biodiesel fuel or green diesel fuel is entitled to a credit against tax liability
determined under section 57-38-30 or 57-38-30.3 in the amount of ten percent per year for five
years of the biodiesel or green diesel fuel seller's direct costs incurred to adapt or add
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 fuel or green diesel fuel by volume. For purposes of
this section, "biodiesel fuel" and "green diesel fuel" mean fuel as defined in section 57-43.2-01.
The credit under this section may not exceed a taxpayer's liability as determined under this
chapter for the taxable year and each year's unused credit amount may be carried forward for
up to five taxable years. A biodiesel or green diesel fuel seller is limited to fifty thousand dollars
in the cumulative amount of credits under this section for all taxable years. A biodiesel or green
diesel fuel seller may not claim a credit under this section for any taxable year before the
taxable year in which the facility begins selling biodiesel or green diesel fuel containing at least
two percent biodiesel or green diesel fuel by volume, but eligible costs incurred before the
taxable year sales begin may be claimed for purposes of the credit under this section for taxable
years on or after the taxable year sales of biodiesel or green diesel fuel begin.

A passthrough entity entitled to the credit under this section must be considered to be the
taxpayer for purposes of this section, and the amount of the credit allowed must be determined
at the passthrough entity level. The amount of the total credit determined at the entity level must
be passed through to the partners, shareholders, or members in proportion to their respective
interests in the passthrough entity.
### § 57-38-01.24. Internship employment tax credit.

1. A taxpayer that is an employer within this state is entitled to a credit as determined
under this section against state income tax liability under section 57-38-30 or
taxpayer. To qualify for the credit under this section, the internship program must meet
the following qualifications:
a. The intern must be an enrolled student in an institution of higher education or
vocational technical education program who is seeking a degree or a certification
of completion in a major field of study closely related to the work experience
performed for the taxpayer;
b. The internship must be taken for academic credit or count toward the completion
of a vocational technical education program;
c. The intern must be supervised and evaluated by the taxpayer; and
d. The internship position must be located in this state.
2. The amount of the credit to which a taxpayer is entitled is ten percent of the stipend or
salary paid to a college intern employed by the taxpayer. A taxpayer may not receive
more than three thousand dollars in total credits under this section for all taxable years
combined.
a. The tax credit under this section applies to a stipend or salary for not more than
five interns employed at the same time.
b. A passthrough entity that is entitled to the credit under this section must be
considered to be the taxpayer for purposes of calculating the credit. The amount
of the allowable credit must be determined at the passthrough entity level. The
total credit determined at the entity level must be passed through to the partners,
shareholders, or members in proportion to their respective interests in the
passthrough entity.
### § 57-38-01.25. Workforce recruitment credit for hard-to-fill employment positions.

A taxpayer that is an employer in this state is entitled to a credit as determined under this
section against state income tax liability under section 57-38-30 or 57-38-30.3 for costs the
taxpayer incurred during the tax year to recruit and hire employees for hard-to-fill employment
positions within this state for which the annual salary for the position meets or exceeds the state
average wage.
1. The amount of the credit to which a taxpayer is entitled is five percent of the salary
paid for the first twelve consecutive months to the employee hired for the hard-to-fill
employment position. To qualify for the credit under this section, the employee must be
employed by the taxpayer in the hard-to-fill employment position for twelve
consecutive months.
2. For purposes of this section:
a. "Extraordinary recruitment methods" means using all of the following:
(1) A person with the exclusive business purpose of recruiting employees and
for which a fee is charged by that recruiter.
(2) An advertisement in a professional trade journal, magazine, or other
publication, the main emphasis of which is providing information to a
particular trade or profession.
(3) A website, the sole purpose of which is to recruit employees and for which a
fee is charged by the website.
(4) Payment of a signing bonus, moving expenses, or nontypical fringe benefits.
b. "Hard-to-fill employment position" means a job that requires the employer to use
extraordinary recruitment methods and for which the employer's recruitment

efforts for the specific position have been unsuccessful for six consecutive
calendar months.
c. "State average wage" means one hundred twenty-five percent of the state
average wage published annually by job service North Dakota and which is in
effect at the time the employee is hired.
3. The taxpayer may claim the credit in the first tax year beginning after the employee
hired for the hard-to-fill position has completed the employee's first twelve consecutive
months of employment in the hard-to-fill position with the taxpayer.
4. The credit under this section may not exceed a taxpayer's liability for the taxable year
as determined under this chapter. Any amount of unused credit may be carried forward
for up to four taxable years after the taxable year in which the credit could initially be
claimed.
5. A passthrough entity that is entitled to the credit under this section must be considered
to be the taxpayer for purposes of this section and the amount of the credit allowed
must be determined at the passthrough entity level. The amount of the total credit
determined at the passthrough entity level must be allowed to the partners,
shareholders, or members in proportion to their respective interests in the passthrough
entity.
### § 57-38-01.26. Angel investor tax credit.

1. For investments made after June 30, 2017, an angel investor is entitled to a credit
against the income tax liability under section 57-38-30.3 for investments made by a
certified angel fund into an in-state qualified business or an out-of-state qualified
business. The credit is equal to thirty-five percent of the amount invested by the angel
fund on behalf of the angel investor in an in-state qualified business during the taxable
year and twenty-five percent of the amount invested by the angel fund on behalf of the
angel investor in an out-of-state qualified business during the taxable year.
a. The aggregate amount of credits allowed to an angel investor in a taxable year is
limited to forty-five thousand dollars. The aggregate amount of credits allowed to
an angel investor for investments made in all taxable years is five hundred
thousand dollars. The limitation under this subdivision does not apply to the angel
fund but applies to each angel investor.
b. The credit must be claimed in the taxable year in which the investment is made in
an in-state qualified business or an out-of-state qualified business. The credit
allowed may not exceed the liability for tax under this chapter. If the amount of the
credit determined under this section exceeds the liability for tax under this
chapter, the excess may be carried forward to each of the five succeeding taxable
years.
c. The investment used to calculate the credit under this section may not be used to
calculate any other income tax deduction or credit allowed by law.
d. Angel investors may not receive more than five million dollars in aggregate
credits under this section during the life of an angel fund but this provision may
not be interpreted to limit additional investments in that angel fund.
e. Investments placed in escrow do not qualify for the credit.
f. A passthrough entity entitled to the credit under this section must be considered
to be the taxpayer for purposes of calculating the credit. The amount of the
allowable credit must be determined at the passthrough entity level. The total
credit determined at the entity level must be passed through to the partners,
shareholders, or members in proportion to their respective interests in the
passthrough entity. An individual taxpayer may take the credit passed through
under this section against the individual's state income tax liability under section
57-38-30.3.
2. For purposes of this section:
a. "Early-stage entity" means an entity with annual revenues of up to two million
dollars.

b. "In-state qualified business" means an early-stage or mid-stage private,
nonpublicly traded enterprise that:
(1) Is created, or its satellite operation is created, as a for-profit entity under the
laws of this state.
(2) Has its principal office in this state and has the majority of its business
activity performed in this state, except sales activity, or has a significant
operation in this state that has or is projected to have more than ten
employees in this state.
(3) Relies on research or the development of new products and processes in its
plans for growth and profitability.
(4) Is in compliance with state and federal securities laws.
(5) Is not an entity or enterprise which is engaged in real estate development, is
a real estate holding company, derives income from the selling or leasing of
residential or commercial real estate, or carries on operations in the hotel,
restaurant, convention, or hospitality industries, or makes any other similar
use of real estate.
(6) Is certified as an in-state qualified business that meets the requirements of
this section by the department of commerce.
c. "Investment" means a cash investment in an in-state qualified business or
out-of-state qualified business that is made in exchange for common stock, a
partnership or membership interest, preferred stock, debt with a mandatory
conversion to equity, or an equivalent ownership interest as determined by the tax
commissioner.
d. "Mid-stage entity" means an entity with annual revenues over two million dollars
not to exceed ten million dollars.
e. "Out-of-state qualified business" means an early-stage or mid-stage private,
nonpublicly traded enterprise that:
(1) Is created as a for-profit entity.
(2) Relies on research or the development of new products and processes in its
plans for growth and profitability.
(3) Is in compliance with state and federal securities laws.
(4) Is not an entity or enterprise engaged in real estate development, is a real
estate holding company, derives income from the selling or leasing of
residential or commercial real estate, or carries on operations in the hotel,
restaurant, convention, or hospitality industries, or makes any other similar
use of real estate.
(5) Is certified as an out-of-state qualified business that meets the requirements
of this section by the department of commerce.
3. An angel fund must:
a. Be a passthrough entity organized after June 30, 2017, as a domestic for-profit
entity under the laws of this state, and have its headquarters in this state.
b. Not have invested, or intend on investing during its certification period, in real
estate or real estate activities as described under subdivision e of subsection 2.
c. Consist of at least six accredited investors as defined in regulation D, rule 501 of
the federal Securities Act of 1933.
d. Not have more than twenty-five percent of its capitalized investment assets
owned by any one investor.
e. Have at least five hundred thousand dollars in commitments from accredited
investors which are subject to call to be invested over an unspecified number of
years to build a portfolio of investments in enterprises.
f. Be member-managed or a manager-managed limited liability company and the
investor members or a designated board that includes investor members must
make decisions as a group on which enterprises are worthy of investments.
g. Be certified as an angel fund that meets the requirements of this subsection by
the department of commerce.

h. Be in, and remain in, compliance with state and federal securities laws, and
invest only in in-state qualified businesses or an out-of-state qualified business
that are issuing securities in compliance with state and federal securities laws.
4. On or before December 31, 2019, and every two calendar years thereafter, a minimum
of fifty percent of an angel fund's investments, as defined under subdivision c of
subsection 2, must be invested into an in-state qualified business.
5. An angel fund shall hold the investment in an in-state qualified business or an
out-of-state qualified business for at least three years from the date of investment. The
three-year period does not apply if, before the end of the three-year period:
a. The investment becomes worthless;
b. Eighty percent or more of the assets of the in-state qualified business or
out-of-state qualified business are sold;
c. The in-state qualified business or out-of-state qualified business is sold;
d. The common stock of the in-state qualified business or out-of-state qualified
business begins trading on a public exchange; or
e. A partner, shareholder, or member of the angel fund dies, in which case the
exception to the three-year holding period only applies to the deceased
individual's portion of the investment and related credit.
6. Within thirty days after the date on which an angel fund makes an investment in an
in-state qualified business or an out-of-state qualified business, the angel fund shall
report the investment to the tax commissioner on forms and in the manner prescribed
by the tax commissioner. The report must contain:
a. The name, address, and federal employer identification number of the angel fund;
b. The total amount of the investment from all angel investors investing in the
in-state qualified business or out-of-state qualified business;
c. The name, address, and social security or federal identification number of each
angel investor investing in the in-state qualified business or out-of-state qualified
business;
d. The amount invested by each angel investor in the in-state qualified business or
out-of-state qualified business;
e. The type of security received by the angel fund in exchange for the investment;
f. The name, address, and federal employer identification number of the in-state
qualified business or out-of-state qualified business;
g. The type of industry in which the in-state qualified business or out-of-state
qualified business is engaged; and
h. Any other information the tax commissioner determines is necessary for
administration of this section.
7. An angel fund is subject to a penalty of one thousand dollars per month for each
month, or fraction thereof, the report under subsection 6 is not filed. The tax
commissioner, for good cause shown, may waive all or part of the penalty imposed
under this subsection.
8. By January thirty-first of each year, the angel fund shall file with the tax commissioner
a report showing:
a. The name and address of each in-state qualified business or out-of-state qualified
business in which the angel fund has made an investment;
b. The principal place of business for each in-state qualified business or out-of-state
qualified business reported under subdivision a;
c. The total amount invested in each in-state qualified business or out-of-state
qualified business; and
d. Any other information the tax commissioner determines is necessary for
administration of this section.
9. For an angel fund certified before July 1, 2017, within thirty days after the end of each
calendar year, the angel fund shall file with the tax commissioner a report showing the
name and principal place of business of each enterprise in which the angel fund has
an investment and the amount of the investment.

10. 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 subsections 6, 8, and 9.
This subsection does not authorize disclosure of the angel investor's name, social
security number or federal employer identification number, address, or any other
information prohibited from disclosure under this chapter.
11. Angel investors may be actively involved in the in-state qualified businesses or
out-of-state qualified businesses in which the angel fund invests but the angel fund
may not invest in any in-state qualified business or out-of-state qualified business if
any one angel investor owns directly or indirectly more than forty-nine percent of the
ownership interests in the in-state qualified business or out-of-state qualified business.
The angel fund may not invest in an in-state qualified business or an out-of-state
qualified business if any one angel investor is a partner, shareholder, or member of
another passthrough entity that directly or indirectly owns more than forty-nine percent
of the ownership interests in the in-state qualified business or out-of-state qualified
business.
12. Failure to comply with any provision of this section is cause to revoke the certification
of an angel fund or an in-state qualified business or an out-of-state qualified business,
or disallow the credit attributable to the noncompliance.
a. Notice of the revocation of the angel fund or an in-state qualified business's or
out-of-state qualified business's certification must be provided to the angel fund
or the in-state qualified business or out-of-state qualified business by the tax
commissioner, department of commerce, or securities commissioner. Within thirty
days of receipt of the notice, the angel fund shall provide a copy of the notice to
each of its angel investors.
b. The angel fund's investors shall file an amended return for each taxable year in
which the disallowed credit reduced the investor's income tax liability and pay the
amount due. The amended return, if required, must be filed within ninety days
after the date of the written notice given to the angel fund.
c. If the amended return is not timely filed, the tax commissioner shall disallow the
credit and assess any tax due. An assessment of tax made under this subsection
is final and irrevocably fixed.
d. If an amended return is filed as required under subdivision b, the tax
commissioner has two years after the amended return is filed in which to audit
and assess any tax due attributable to the revocation of the credit, even though
other time periods for assessment under this chapter have expired. This
subdivision does not limit or restrict any other time period for assessment under
this chapter that has not expired.
13. An angel fund or a representative of the fund that knowingly makes, or causes to be
made, any material false statement or representation in any application, report, or
other document required to be filed under any provision of this section, or omits to
state any material statement or fact in any such application, report, or other document
required to be filed under any provision of this section, or fails to file the report required
in subsection 8 or 9, and after thirty days' notice to file is given by the tax
commissioner, is subject to a penalty of ten thousand dollars.
14. Notwithstanding any other provision of law, the tax commissioner, securities
commissioner, and the department of commerce may exchange any information
obtained under this section to the extent necessary to administer this section.
### § 57-38-01.27. Microbusiness income tax credit.

Repealed by S.L. 2017, ch. 389, § 3.
### § 57-38-01.28. Marriage penalty credit.

1. A married couple filing a joint return under section 57-38-30.3 is allowed a credit of not
to exceed three hundred dollars per couple as determined under this section. The tax
commissioner shall adjust the maximum amount of the credit under this subsection

each taxable year at the time and rate adjustments are made to rate schedules under
subdivision g of subsection 1 of section 57-38-30.3.
2. The credit under this section is the difference between the tax on the couple's joint
North Dakota taxable income under the rates and income levels in subdivision b of
subsection 1 of section 57-38-30.3 and the sum of the tax under the rates and income
levels of subdivision a of subsection 1 of section 57-38-30.3 on the qualified income of
the lesser-earning spouse, and the tax under the rates and income levels of
subdivision a of subsection 1 of section 57-38-30.3 on the couple's joint North Dakota
taxable income, minus the qualified income of the lesser-earning spouse.
3. For a nonresident or part-year resident, the credit under this section must be adjusted
based on the percentage calculated under subdivision f of subsection 1 of section
57-38-30.3.
4. For purposes of this section:
a. "Qualifying income" means the sum of the following, to the extent included in
North Dakota taxable income:
(1) Earned income as defined in section 32(c)(2) of the Internal Revenue Code;
and
(2) Income received from a retirement pension, profit-sharing, stock bonus, or
annuity plan.
b. "Qualifying income of the lesser-earning spouse" means the qualifying income of
the spouse with the lesser amount of qualifying income for the taxable year minus
the sum of:
(1) The amount for one exemption under section 151(d) of the Internal Revenue
Code; and
(2) One-half of the amount of the standard deduction under section 63(c)(2)(A)
(4) of the Internal Revenue Code.
### § 57-38-01.29. Homestead income tax credit - Rules.

Repealed by S.L. 2017, ch. 57, § 20.
### § 57-38-01.30. Commercial property income tax credit - Rules.

Repealed by S.L. 2017, ch. 57, § 20.
### § 57-38-01.31. Employer tax credit for salary and related retirement plan contributions

for mobilized employees.
1. A taxpayer who is an employer in this state is entitled to a credit against tax liability as
determined under sections 57-38-30 and 57-38-30.3 equal to twenty-five percent of
the reduction in compensation that the taxpayer continues to pay during the taxable
year to, or on behalf of, each employee of the taxpayer during the period that the
employee is mobilized under title 10 of the United States Code as a member of a
reserve or national guard component of the armed forces of the United States. The
maximum credit allowed for each eligible employee is one thousand dollars. The
amount of the tax credit may not exceed the amount of the taxpayer's state tax liability
for the tax year and an excess credit may be carried forward for up to five taxable
years. For the purposes of this subsection:
a. "Reduction in compensation" means the amount by which the pay received
during the taxable year by the employee for service under title 10 of the United
States Code is less than the total amount of salary and related retirement plan
contributions that would have been paid by the taxpayer to the employee for the
same time period had the employee not been mobilized.
b. "Related retirement plan contributions" means the portion of voluntary or
matching contributions paid by the taxpayer into a defined contribution plan
maintained by the taxpayer for the employee.
2. A passthrough entity that is an employer in this state must be considered to be a
taxpayer for purposes of this section. The amount of the credit determined at the

passthrough entity level must be passed through to the partners, shareholders, or
members in proportion to their respective interests in the passthrough entity.
### § 57-38-01.32. Housing incentive fund tax credit.

Expired by S.L. 2015, ch. 14, § 20.
### § 57-38-01.33. Income tax credit for purchases of manufacturing machinery and

equipment for the purpose of automating manufacturing processes.
Expired by S. L. 2015, ch. 445, §1.
### § 57-38-01.34. Corporate credit for contributions to rural leadership North Dakota.

There is allowed a credit against the tax imposed by section 57-38-30 in an amount equal to
fifty percent of the aggregate amount of contributions made by the taxpayer during the taxable
year for tuition scholarships for participation in rural leadership North Dakota conducted through
the North Dakota state university extension service. Contributions by a taxpayer may be
earmarked for use by a designated recipient.
### § 57-38-01.35. Financial institutions - Net operating losses - Credit carryovers.

1. A subchapter S corporation that was a financial institution under chapter 57-35.3 may
elect to be treated as a taxable corporation under chapter 57-38. If an election is made
under this section, the election:
a. Must be made in the form and manner prescribed by the tax commissioner on the
return filed for the tax year beginning on January 1, 2013, or the return filed for
the short period required under subsection 8 of section 57-38-34; and
b. Is binding until the earlier of:
(1) The end of the tax year for which the taxpayer reports a tax liability after tax
credits; or
(2) The beginning of the tax year for which the taxpayer elects to be recognized
as a subchapter S corporation under section 57-38-01.4.
2. If an election is made under this section, the following apply:
a. A subchapter S corporation may not file a consolidated return.
b. Any unused credit carryovers earned by a financial institution under chapter
57-35.3 for tax years beginning before January 1, 2013, may be carried forward
for the same number of years the financial institution would have been entitled
under chapter 57-35.3.
c. Any unused net operating losses incurred by a financial institution under chapter
57-35.3 for tax years beginning before January 1, 2013, may be carried forward
for the same number of years the financial institution would have been entitled
under chapter 57-35.3.
### § 57-38-01.36. Twenty-first century manufacturing workforce incentive.

Expired under S.L. 2019, ch. 437, § 3.
### § 57-38-01.37. Individual income tax credit.

Expired under S.L. 2021, ch. 565, § 3.
### § 57-38-01.38. Adoption tax credit.

1. A taxpayer is entitled to a credit against the income tax liability under section
2. The credit is equal to ten percent of the federal adoption credit allowed under
section 23 of the Internal Revenue Code [26 U.S.C. 23] claimed by the taxpayer in the
current taxable year.
3. The credit allowed under this section may not exceed fifty percent of the taxpayer's
liability for tax under this chapter. Any credit amount exceeding fifty percent of the

taxpayer's liability for the taxable year may be carried forward to each of the three
succeeding taxable years, subject to the limitation in this subsection.
### § 57-38-01.39. Tax credit for contributions to a maternity home, child-placing agency, or

pregnancy help center.
1. A taxpayer is entitled to a credit against the income tax liability under section 57-38-30
or 57-38-30.3 for contributions made to a maternity home, child-placing agency, or
pregnancy help center.
2. Subject to the limitations in subsection 3, the credit is equal to the aggregate amount
of charitable contributions made by the taxpayer during the taxable year to a maternity
home, child-placing agency, or pregnancy help center.
3. The credit allowed under this section may not exceed fifty percent of the taxpayer's
liability for tax under this chapter or two thousand five hundred dollars, whichever is
less. Any credit amount exceeding the limitation in this subsection for the taxable year
may not be claimed as a carryback or carryforward.
4. A passthrough entity entitled to the credit under this section must be considered to be
the taxpayer for purposes of this section and the amount of the credit allowed must be
determined at the passthrough entity level. The amount of the total credit determined
at the passthrough entity level must be allowed to the partners, shareholders, or
members in proportion to their respective interests in the passthrough entity.
5. For purposes of this subsection:
a. "Child-placing agency" means a child-placing agency under chapter 50-12.
b. "Maternity home" means a nonprofit facility operating for the purpose of providing
shelter and care to a pregnant woman or parent of a child twelve months of age
or younger.
c. "Pregnancy help center" means a nongovernmental entity eligible for
disbursements pursuant to section 50-06-26.
### § 57-38-01.40. Apprenticeship tax credit.

1. A taxpayer is entitled to a credit as determined under this section against the income
tax liability under section 57-38-30 or 57-38-30.3 for qualified compensation paid to an
individual who is an apprentice in an apprenticeship program as provided in title 29,
Code of Federal Regulations, subtitle a, part 29 or an apprentice electrician registered
under chapter 43-09 and is employed in this state by the taxpayer.
2. To qualify for the credit under this section, a taxpayer shall:
a. Directly employ, supervise, and evaluate a qualified apprentice in an
apprenticeship position located in this state.
b. For a taxpayer that employs an individual who is an apprentice in an
apprenticeship program as provided in title 29, Code of Federal Regulations,
subtitle a, part 29, obtain a certification from the United States department of
labor, bureau of apprenticeship and training, stating the taxpayer has met all the
requirements and qualifications of the apprenticeship program as provided in
title 29, Code of Federal Regulations, subtitle a, part 29 and submit to the tax
commissioner proof of the certification.
c. Submit any other information prescribed by the tax commissioner.
3. Subject to the limitations provided in this subsection, the amount of the credit to which
a taxpayer is entitled is ten percent of the stipend or salary paid to a qualified
apprentice employed by the taxpayer.
a. The aggregate amount of credits allowed to a taxpayer under this section may not
exceed three thousand dollars in total credits for all taxable years combined.
b. The tax credit under this section applies to a stipend or salary for not more than
five apprentices employed by the taxpayer at the same time.
c. The credit allowed under this section may not exceed a taxpayer's liability for tax
under this chapter. Any credit amount exceeding a taxpayer's liability for the
taxable year may not be claimed as a carryback or carryforward.

4. A passthrough entity entitled to the credit under this section must be considered to be
the taxpayer for purposes of this section and the amount of the credit allowed must be
determined at the passthrough entity level. The amount of the total credit determined
at the passthrough entity level must be allowed to the partners, shareholders, or
members in proportion to their respective interests in the passthrough entity.
5. The tax commissioner shall prescribe, design, and make available all forms necessary
to effectuate this section.
### § 57-38-01.41. Twenty-first century manufacturing and animal agricultural workforce

incentive.
1. A taxpayer that is a primary sector business is allowed a nonrefundable credit against
the tax imposed under section 57-38-30 or 57-38-30.3 for purchases of qualifying
machinery and equipment in this state to improve job quality or increase productivity.
The amount of the credit under this section is fifteen percent of the cost of the
qualifying machinery and equipment purchased in the taxable year. Qualified
expenditures under this section may not be used in the calculation of any other income
tax deduction or credit allowed under this chapter.
2. For purposes of this section:
a. "Animal agricultural machinery and equipment" means new or used automation
and robotic equipment used to upgrade or advance an animal agricultural
process. The term does not include replacement automation and robotic
equipment that does not upgrade or advance an animal agricultural process.
b. "Animal agricultural process" means the breeding, raising, harvesting, or
processing of animals for producing meat, dairy, or eggs, or meat, dairy, or egg
products. For purposes of this subdivision, "animal" means beef or dairy cattle,
swine, sheep, goats, bison, farmed elk, or poultry.
c. "First-time claimant" means a taxpayer that has not previously claimed a credit
against the tax imposed under section 57-38-30 or 57-38-30.3 for purchases of
animal agricultural machinery and equipment or manufacturing machinery and
equipment for the purpose of automating manufacturing or animal agricultural
processes.
d. "Improved job quality" means a five percent increase in average wages or a five
percent improvement in workplace safety as documented through participation in
workforce safety and insurance safety incentive programs.
e. "Increased productivity" means no less than a five percent increase in output or a
five percent increase in the number of units produced per automated line per time
period.
f. "Manufacturing machinery and equipment" means new or used automation and
robotic equipment used to upgrade or advance a manufacturing process. The
term does not include replacement automation and robotic equipment that does
not upgrade or advance a manufacturing process.
g. "Primary sector business" has the meaning provided in section 1-01-49.
h. "Purchase" includes qualifying machinery and equipment acquired under a capital
lease only for the taxable year in which the lease is executed. A capital lease is a
lease which meets generally accepted accounting principles. The qualifying costs
of the equipment acquired under a capital lease is the fair market value of the
equipment at the inception of the lease.
i. "Qualifying machinery and equipment" means animal agricultural machinery and
equipment and manufacturing machinery and equipment for the purpose of
automating manufacturing or animal agricultural processes.
3. The taxpayer shall claim the total credit amount for the taxable year in which the
qualifying machinery and equipment are purchased. The credit under this section may
not exceed the taxpayer's liability as determined under this chapter for any taxable
year.

4. If the amount of the credit determined under this section exceeds the liability for tax
under this chapter, the excess may be carried forward to each of the next five
succeeding taxable years.
5. a. The aggregate amount of credits allowed each calendar year under this section
may not exceed three million dollars.
(1) From the aggregate credit limit in this subdivision, the tax commissioner
shall designate:
(a) Five hundred thousand dollars for credits claimed by first-time
claimants for animal agricultural machinery and equipment for the
purpose of automating animal agricultural processes; and
(b) Five hundred thousand dollars for credits claimed by first-time
claimants for manufacturing machinery and equipment for the purpose
of automating manufacturing processes.
(2) If the portion of the aggregate limit which is designated for first-time
claimants in paragraph 1 is greater than the amount of credits claimed by
the corresponding first-time claimants, the remaining portion of the
aggregate limit which is designated for the first-time claimants in
paragraph 1 must be included in the amount available to claimants that are
not first-time claimants.
(3) If the portion of the aggregate limit which is not designated for first-time
claimants in paragraph 1 is greater than the amount of credits claimed by
claimants that are not first-time claimants, the remaining portion of the
aggregate limit which is not designated for first-time claimants in
paragraph 1 must be included in the amount available to first-time claimants
to the extent necessary to satisfy all first-time claims.
(4) If the sum of the portion of the aggregate limit which is designated for the
corresponding first-time claimants in paragraph 1 and any amount available
to the first-time claimants under paragraph 3 is less than the amount of
credits claimed by the first-time claimants, the tax commissioner shall
prorate the credits among the first-time claimants.
b. If the maximum amount of allowed credits are not claimed in any calendar year,
any remaining unclaimed credits may be carried forward and made available in
the next succeeding calendar year.
c. After determining the credits claimed by the first-time claimants as provided in
subdivision a, if the aggregate amount of credits claimed under this section by
claimants that are not first-time claimants exceeds the amount available to
claimants that are not first-time claimants in a calendar year, the tax
commissioner shall prorate the credits among the claimants that are not first-time
claimants.
6. If a taxpayer entitled to the credit provided by this section is a member of a group of
corporations filing a North Dakota consolidated tax return using the combined
reporting method, the credit may be claimed against the aggregate North Dakota tax
liability of all the corporations included in the North Dakota consolidated return.
7. A passthrough entity entitled to the credit under this section must be considered to be
the taxpayer for purposes of calculating the credit. The amount of the allowable credit
must be determined at the passthrough entity level. The total credit determined at the
entity level must be passed through to the partners, shareholders, or members in
proportion to their respective interests in the passthrough entity. An individual taxpayer
may take the credit passed through under this subsection against the individual's state
income tax liability under section 57-38-30.3.
8. The department of commerce shall provide the tax commissioner the name, address,
and federal identification number or social security number of the taxpayer approved
as qualifying for the credit under this section, and a list of those items approved as a
qualified expenditure by the department. The taxpayer claiming the credit shall file with
the taxpayer's return, on forms prescribed by the tax commissioner, the following
information:

a. The name, address, and federal identification number or social security number
of the taxpayer that made the purchase; and
b. An itemization of:
(1) Each item of machinery or equipment purchased for automation, including a
description of the equipment or system being upgraded or advanced, and an
explanation of how the upgrade or advancement will improve job quality or
increase productivity;
(2) The amount paid for each item of machinery or equipment if the amount
paid for the machinery or equipment is being used as a basis for calculating
the credit; and
(3) The date on which payment for the purchase was made.
9. Within one year after claiming a tax credit under this section, a taxpayer shall file with
the tax commissioner a report that documents the improved job quality or increased
productivity required under this section and any other information the tax
commissioner determines is necessary for administration of this section. Failure to
document the improved job quality or increased productivity requirements is cause to
disallow the credit attributable to the noncompliance. The tax commissioner shall
provide notice of the disallowed credit to the taxpayer. Within ninety days after the date
of the notice, the taxpayer shall file an amended return for each taxable year in which
the disallowed credit reduced the taxpayer's tax liability and pay the amount due. If an
amended return is not filed timely, the tax commissioner shall disallow the credit and
assess any tax due. An assessment of tax made under this subsection is final and
irrevocably fixed.
10. Notwithstanding the time limitations contained in section 57-38-38, this section does
not prohibit the tax commissioner from conducting an examination of the credit claimed
and assessing additional tax due under section 57-38-38.
### § 57-38-01.42. Child care contribution credit.

1. A taxpayer that is a qualified employer is entitled to a credit against the income tax
liability under section 57-38-30 or 57-38-30.3 as provided in this section. The total
credit available with respect to each qualified employer is equal to fifty percent of the
taxpayer's aggregate child care contributions paid during the taxable year. The credit
must be claimed for the taxable year in which the child care contributions are made.
2. The credit allowed under this section may not exceed the liability for tax under this
chapter. Any credit amount exceeding a taxpayer's liability for the taxable year may not
be claimed as a carryback or carryforward.
3. A passthrough entity entitled to the credit under this section must be considered to be
the taxpayer for purposes of this section and the amount of the credit allowed must be
determined at the passthrough entity level. The amount of the total credit determined
at the passthrough entity level must be allowed to the partners, shareholders, or
members in proportion to their respective interests in the passthrough entity.
4. To receive the tax credit provided under this section, a taxpayer shall claim the credit
in the form and manner prescribed by the tax commissioner. The tax commissioner
shall prescribe, design, and make available all forms necessary to effectuate this
section.
5. For purposes of this section:
a. "Aggregate child care contributions" means the total amount of child care
contributions made by a qualified employer to all qualified employees during the
taxable year, limited to the first one thousand dollars in child care contributions
per qualified employee.
b. "Child care contribution" means a payment made to a child care provider by a
qualified employer to subsidize a qualified employee's child care costs and a
payment made to a qualified employee's child care costs.
c. "Child care costs" means costs incurred by an employee for early childhood
services rendered by a child care provider, which are incurred to enable the
employee to be gainfully employed by an employer.

d. "Child care provider" means an early childhood services provider licensed under
chapter 50-11.1 or a substantially similar provider that is licensed by another state
and provides early childhood services within ten miles of this state.
e. "Early childhood services" has the same meaning as in section 50-11.1-02.
f. "Qualified employee" means an individual employed by the qualified employer
claiming the credit under this section.
g. "Qualified employer" means an employer that, in the taxable year:
(1) Made a child care contribution; and
(2) Provided an equal opportunity to all employees that have child care costs to
receive an equal child care contribution from the employer during the
taxable year.
### § 57-38-02. Annual tax on individuals.

Repealed by S.L. 2009, ch. 545, § 32.
### § 57-38-03. Imposition of tax against nonresidents.

The tax imposed by this chapter must be levied, collected, and paid annually upon and with
respect to income derived from all property owned, from all gaming activity carried on in this
state, and from every business, trade, profession, or occupation carried on in this state by
natural persons not residents of the state at the rates specified with respect to net income of a
resident of North Dakota.
### § 57-38-04. Allocation and apportionment of gross income of individuals.

The gross income of individuals must be allocated and apportioned as follows:
1. a. Income from personal or professional services performed in this state by
individuals must be assigned to this state regardless of the residence of the
recipients of such income, except that income from such services performed
within this state by an individual who resides and has the individual's place of
abode in another state to which place of abode the individual customarily returns
at least once a month must be excluded from the individual's income for the
purposes of this chapter if such income is subject to an income tax imposed by
the state in which the individual resides, provided that the state in which the
individual resides allows a similar exclusion for income received from similar
services performed in that state by residents of North Dakota.
b. Notwithstanding any other provision of this chapter, the compensation received
from services performed within this state by an individual, who performs services
for a common carrier engaged in interstate transportation and who resides and
has the individual's place of abode to which the individual customarily returns at
least once a month in another state, must be excluded from income to the extent
that the income is subject to an income tax imposed by the state of the
individual's residence; provided, that the state allows a similar exclusion of the
compensation received by residents of North Dakota for similar services
performed therein, or a credit against the tax imposed on the income of residents
of this state that is substantially similar in effect. For purposes of this subdivision,
the term an individual who performs services for a common carrier engaged in
interstate transportation is limited to an individual who performs the services for a
common carrier only during the course of making regular runs into North Dakota
or from within North Dakota to outside North Dakota, or both, on the
transportation system of the common carrier.
2. Income received from personal or professional services performed by residents of this
state, regardless of where such services are performed, and income received by
residents of this state from intangible personal property must be assigned to this state.
3. Income and gains received from tangible property not employed in the business and
from tangible property employed in the business of the taxpayer, if such business
consists principally of the holding of such property and collection of income and gains

therefrom, must be assigned to this state without regard to the residence of the
recipient if such property has a situs within this state.
4. Income derived from business activity carried on by an individual as a sole
proprietorship, or through a partnership, subchapter S corporation, or other
passthrough entity, must be assigned to this state without regard to the residence of
the individual if the business activity is conducted wholly within this state. Income
derived from gaming activity carried on in this state by an individual must be assigned
to this state without regard to the residence of the individual.
5. Whenever business activity is carried on partly within and partly without this state by a
nonresident of this state as a sole proprietorship, or through a partnership,
subchapter S corporation, or other passthrough entity, the entire income therefrom
must be allocated to this state and to other states, according to the provisions of
chapter 57-38.1 but only according to the apportionment method provided under
subsection 1 of section 57-38.1-09, providing for allocation and apportionment of
income of corporations doing business within and without this state.
6. a. Income and gains received by a resident of this state from tangible property not
employed in the business and from tangible property employed in the business of
the taxpayer, if the business consists principally of the holding of the property and
the collection of income and gains from the business, must be assigned to this
state without regard to the situs of the property.
b. Income derived from business activity carried on by residents of this state,
whether the business activity is conducted as a sole proprietorship, or through a
partnership, subchapter S corporation, or other passthrough entity, must be
assigned to this state without regard to where the business activity is conducted,
and the provisions of chapter 57-38.1 do not apply. If the taxpayer believes the
operation of this subdivision with respect to the taxpayer's income is unjust, the
taxpayer may petition the tax commissioner who may allow use of another
method of reporting income, including separate accounting.
7. All other items of gross income must be assigned to the taxpayer's domicile.
8. The privileges granted nonresidents apply only when other states grant to the
residents of North Dakota the same privilege.
### § 57-38-05. Certain income of nonresidents not taxed.

Unless the income, gains, or both, arise from transactions in the regular course of the
taxpayer's trade or business carried on in this state, or unless the acquisition, management, and
disposition of intangible personal property constitutes a trade or business carried on in this
state, or unless the income, gains, or both, arise from gaming activity carried on in this state,
income of nonresidents derived from land contracts, mortgages, stocks, bonds, or other
intangible personal property, or from the sale of intangible personal property, may not be taxed.
### § 57-38-06. General provisions applicable to nonresidents.

The provisions of law applicable to the assessment, levy, and collection of income taxes
from resident individuals, as to income, taxable income, adjustments to taxable income, and the
allocation or proration of any such items, and all other provisions not inconsistent with the
provisions of this chapter especially made applicable to nonresidents, govern the levy and
collection of income taxes from nonresident individuals.
### § 57-38-06.1. Exemptions for nonresident individual.

Repealed by S.L. 2009, ch. 545, § 32.
### § 57-38-07. Tax imposed on fiduciaries - Charge against estate or trust.

The tax imposed by this chapter applies to and becomes a charge against estates and
trusts with respect to their taxable income as defined in this chapter and the rates must be the
same as those applicable to individuals. The fiduciary is responsible for making the return of
income for the estate or trust for which the fiduciary acts, whether such income is taxable to the

estate or trust or to the beneficiaries thereof. Fiduciaries required to make returns are subject to
all of the provisions of this chapter which apply to individuals.
### § 57-38-07.1. Taxation of two or more member limited liability companies.

For purposes of this chapter, a limited liability company having two or more members that is
formed under either the laws of this state or under similar laws of another state, and that is
considered to be a partnership for federal income tax purposes, is considered to be a
partnership and the members must be considered to be partners. A limited liability company
having two or more members that is not treated as a partnership for federal income tax
purposes must be treated as a corporation for state tax purposes.
### § 57-38-07.2. Taxation of single-member limited liability companies.

For purposes of this chapter, a limited liability company having a single member which is
formed under either the laws of this state or under similar laws of another state and that is
considered to be a corporation for federal income tax purposes is considered to be a
corporation for state tax purposes. A limited liability company having a single member which is
not treated as a corporation for federal income tax purposes is disregarded as an entity
separate from its owner for state tax purposes.
### § 57-38-08. Partnerships not subject to tax.

Partnerships are not subject to tax under this chapter. Persons carrying on a business as
partners are taxable on their respective shares of the partnership's income, gain, loss, and
deduction included in the partner's federal taxable income, as provided under
section 57-38-08.1.
### § 57-38-08.1. Allocation and apportionment of partnership income - Taxation of

partners.
1. A partnership that carries on its business activity entirely within this state shall report
all of its income or loss to this state. A partnership that carries on its business activity
within and without this state shall allocate and apportion its income or loss to this state
in the same manner as the income or loss of a corporation is allocated and
apportioned to the state under chapter 57-38.1.
2. Resident partners, limited to individuals, estates, and trusts, must report their entire
distributive share to this state as provided in subdivision b of subsection 6 of
section 57-38-04, and may claim a credit for taxes paid to another state on that portion
of their distributive share attributable to and taxed by another state.
3. a. In determining the gross income of a nonresident partner, limited to individuals,
estates, and trusts, there must be included only that part derived from or
connected with sources in this state of the partner's distributive share of items of
partnership income, gain, loss and deduction, or item thereof, entering into the
federal taxable income of the partner, as determined under section 57-38-04.
Except as otherwise provided in this subdivision, guaranteed payments paid to
nonresident partners of a partnership that has business activity in this state are
treated as a distributive share of partnership income for state tax purposes. In the
case of a professional service partnership, the portion of a guaranteed payment
paid to a nonresident partner attributable to a reasonable salary may not be
treated as a distributive share. The portion of the guaranteed payment not treated
as a distributive share that is for services performed in this state must be
assigned as provided under subsection 1 of section 57-38-04. For purposes of
this subdivision, "professional service partnership" means a partnership that
engages in the practice of law, accounting, medicine, and any other profession in
which neither capital nor the services of employees are a material
income-producing factor.
b. In determining the sources of a nonresident partner's income, no effect shall be
given to a provision in the partnership agreement which:

(1) Characterizes payments to the partners as being for services or for the use
of capital or allocates to the partner, as income or gain from sources outside
this state, a greater proportion of the partner's distributive share of
partnership income or gain than the ratio of partnership income or gain from
sources outside this state to partnership income or gain from all sources,
except as authorized in subdivision d; or
(2) Allocates to the partner a greater proportion of a partnership item of loss or
deduction connected with sources in this state than the proportionate share
of the partner, for federal income tax purposes, of partnership loss or
deduction generally, except as authorized in subdivision d.
c. Any modification to federal taxable income described in this chapter that relates
to an item of partnership income, gain, loss, or deduction, or item thereof, must
be made in accordance with the partner's distributive share, for federal income
tax purposes, of the item to which the modification relates, but limited to the
partner's portion of the item derived from or connected with sources in this state.
d. On application, the commissioner may authorize the use of other methods of
determining a nonresident partner's portion of partnership items derived from or
connected with sources in this state, and the related modifications, as may be
appropriate and equitable, on the terms and conditions as it may require.
### § 57-38-09. Exempt organizations.

1. A person or organization exempt from federal income taxation under the provisions of
the Internal Revenue Code of 1954, as amended, is also exempt from the tax imposed
by this chapter in each year such person or organization satisfies the requirements of
the Internal Revenue Code of 1954, as amended, for exemption from federal income
taxation. If the exemption applicable to any person or organization under the
provisions of the Internal Revenue Code of 1954, as amended, is limited or qualified in
any manner, the exemption from taxes imposed by this section must be limited or
qualified in a similar manner.
2. Notwithstanding the provisions of subsection 1, the unrelated business taxable
income, as computed under the provisions of the Internal Revenue Code of 1954, as
amended, of any person or organization otherwise exempt from the tax imposed by
this chapter and subject to the tax imposed on unrelated business income by the
Internal Revenue Code of 1954, as amended, is subject to the tax which would have
been imposed by this chapter but for the provisions of subsection 1.
3. In addition to the persons or organizations exempt from federal income taxation under
the provisions of the Internal Revenue Code of 1954, as amended, there shall also be
exempt from the tax imposed by this chapter insurance companies doing business in
the state and paying a tax upon the gross amount of premiums received in the state.
### § 57-38-09.1. Organizations exempt from income tax - File return.

Any organization exempt from taxation pursuant to section 57-38-09 must provide the tax
commissioner, in such form and manner as may be prescribed by the tax commissioner,
information as is necessary to enable the tax commissioner to determine the exempt status of
the organization.
### § 57-38-10. Allocation and apportionment of partnership income.

Repealed by S.L. 2001, ch. 525, § 4.
### § 57-38-11. Annual tax on corporations.

The tax imposed by this chapter must be levied, collected, and paid annually with respect to
its North Dakota income, as hereinafter defined, received by every corporation doing business
in this state.

### § 57-38-12. Allocation of corporation income.

Repealed by S.L. 2003, ch. 528, § 4.
### § 57-38-13. General provisions related to allocation of corporation income.

Repealed by S.L. 2003, ch. 528, § 4.
### § 57-38-14. General provisions relating to corporate income.

The following principles may be applied in determining North Dakota income:
1. Any corporation organized under the laws of North Dakota and subject to a tax under
the provisions of this chapter, which maintains no regular place of business outside
this state, except a statutory office, must be taxed upon its entire income.
2. Corporations engaged in business within and without this state may be taxed only on
such income as is derived from business transacted and property located within this
state. The amount of such income apportionable to North Dakota must be determined
as provided in chapter 57-38.1.
3. Any corporation liable to report under this chapter and owning or controlling, either
directly or indirectly, substantially all of the voting capital stock of another corporation,
or of other corporations, may be required to make a consolidated report showing the
combined income, such assets of the corporation as are required for the purposes of
this chapter, and such other information as the tax commissioner may require, but
excluding intercorporate stock holdings and intercorporate accounts.
4. Any corporation liable to report under this chapter and owned or controlled either
directly or indirectly by another corporation may be required to make a report
consolidated with the owning company, showing the combined income, such assets of
the corporation as are required for the purposes of this chapter, and such other
information as the tax commissioner may require, but excluding intercorporate stock
holdings and intercorporate accounts.
5. In case it appears to the tax commissioner that any arrangement exists in such a
manner as to reflect improperly the business done, the segregable assets, or the
entire income earned from business done in this state, the tax commissioner is
authorized and empowered, in such manner as the tax commissioner may determine,
to adjust the tax equitably.
6. The tax commissioner may permit or require the filing of a combined report if
substantially all the voting capital stock of two or more corporations liable to report
under this chapter is owned or controlled by the same interests. The tax commissioner
may impose the tax provided by this chapter as though the combined entire income
and segregated assets were those of one corporation, but in the computation,
dividends received from any corporation whose assets, as distinguished from shares
of stock, are included in the segregations may not be included in the income.
7. When any corporation required to make a return under this chapter conducts the
business, whether under agreement or otherwise, in such manner as directly or
indirectly to benefit the members or stockholders of the corporation, or any of them, or
any person or persons, directly or indirectly interested in such business, by selling its
products, or the goods or commodities in which it deals, at less than a fair price which
might be obtained therefor, or if such a corporation, a substantial portion of whose
capital stock is owned either directly or indirectly by another corporation, acquires and
disposes of the products of the corporation owning the substantial portion of its capital
stock, in such manner as to create a loss or improper income, the tax commissioner
may require such facts as the tax commissioner deems necessary for the proper
computation provided by this chapter, and for the purposes of this chapter may
determine the amount which must be deemed to be the entire income, of the business
of such corporation for the calendar or fiscal year. In determining such entire income,
the tax commissioner shall have regard to the fair profits which, but for any agreement,
arrangement, or understanding, might be or could have been obtained from dealing in
such products, goods, or commodities.

8. If it appears to the tax commissioner that the segregation of assets shown by any
report made under this chapter does not reflect properly the corporate activity or
business done, or the income earned from corporate activity, or from business done in
this state because of the character of the corporation's business and the character and
location of its assets, the tax commissioner is authorized and empowered to adjust the
tax equitably.
9. Notwithstanding any other provision of law, two or more North Dakota domestic
corporations, affiliated as parent and subsidiary, and filing a federal consolidated tax
return, shall file a combined report and consolidated return for income tax under this
chapter.
### § 57-38-15. Basis for determining gain or loss.

Repealed by S.L. 1967, ch. 446, § 8.
### § 57-38-15.1. Capital gains and losses.

Repealed by S.L. 1967, ch. 446, § 8.
### § 57-38-15.2. No capital gain recognized on property involuntarily converted.

Repealed by S.L. 1967, ch. 446, § 8.
### § 57-38-15.3. Gain or loss not recognized on certain exchanges.

Repealed by S.L. 1967, ch. 446, § 8.
### § 57-38-16. Inventory - Use under direction of tax commissioner.

Repealed by S.L. 1967, ch. 446, § 8.
### § 57-38-17. Gross income defined.

Repealed by S.L. 1967, ch. 446, § 8.
### § 57-38-17.1. Income from back pay - Limitation of tax - Definition.

Repealed by S.L. 1967, ch. 446, § 8.
### § 57-38-18. Items not included in gross income.

Repealed by S.L. 1967, ch. 446, § 8.
### § 57-38-19. Gross income of life insurance companies.

Repealed by S.L. 1967, ch. 446, § 8.
### § 57-38-20. Basis of return of net income.

Repealed by S.L. 1967, ch. 446, § 8.
### § 57-38-21. Net income defined - Computation.

Repealed by S.L. 1967, ch. 446, § 8.
### § 57-38-22. Deductions allowed.

Repealed by S.L. 1967, ch. 446, § 8.
### § 57-38-22.1. Deductions - Individuals.

Repealed by S.L. 1967, ch. 446, § 8.
### § 57-38-23. Items not deductible.

Repealed by S.L. 1961, ch. 359, § 8.

### § 57-38-24. Net losses - Meaning - Exceptions.

Repealed by S.L. 1967, ch. 446, § 8.
### § 57-38-25. Net loss as a deduction.

Repealed by S.L. 1945, ch. 300, § 1.
### § 57-38-26. Exemption for individuals.

Repealed by S.L. 1967, ch. 446, § 8.
### § 57-38-27. Exemption for fiduciaries.

Repealed by S.L. 1967, ch. 446, § 8.
### § 57-38-28. Time for fixing exemption status.

Repealed by S.L. 1967, ch. 446, § 8.
### § 57-38-29. Optional method of computing tax.

Repealed by S.L. 2009, ch. 545, § 32.
### § 57-38-29.1. Energy cost relief credit.

Repealed by S.L. 1983, ch. 632, § 5; S.L. 1985, ch. 634, § 1.
### § 57-38-29.2. Credit for premiums for long-term care insurance coverage.

Repealed by S.L. 2009, ch. 545, § 32.
### § 57-38-29.3. Credit for premiums for long-term care partnership plan insurance

coverage.
A credit against an individual's tax liability under this chapter is provided to each taxpayer in
the amount of the premiums paid during the taxable year by the taxpayer for qualified long-term
care partnership plan insurance coverage for the taxpayer or the taxpayer's spouse, or both.
The credit under this section for each insured individual may not exceed two hundred fifty
dollars in any taxable year. For purposes of this section, "qualified long-term care partnership
plan" is one that:
1. Is a qualified long-term care insurance policy, as defined in section 7702B(b) of the
Internal Revenue Code of 1986, with an issue date on or after the date specified in an
approved Medicaid state plan amendment that provides for the disregard of assets;
2. Meets the requirements of the long-term care insurance model regulations and the
long-term care insurance model act promulgated by the national association of
insurance commissioners as adopted as of October 2000, or the insurance
commissioner certifies that the policy meets those requirements; and
3. Is purchased by an individual who:
a. Has not attained age sixty-one as of the date of purchase, if the policy provides
compound annual inflation protection;
b. Has attained age sixty-one but has not attained age seventy-six as of the date of
purchase, if the policy provides some level of inflation protection; or
c. Has attained age seventy-six as of the date of purchase.
### § 57-38-30. Imposition and rate of tax on corporations.

A tax is hereby imposed upon the taxable income of every domestic and foreign corporation
which must be levied, collected, and paid annually as in this chapter provided:
1. For the first twenty-five thousand dollars of taxable income, at the rate of one and
forty-one hundredths percent.
2. On all taxable income exceeding twenty-five thousand dollars and not exceeding fifty
thousand dollars, at the rate of three and fifty-five hundredths percent.
3. On all taxable income exceeding fifty thousand dollars, at the rate of four and
thirty-one hundredths percent.

### § 57-38-30.1. Corporate tax credit for new industry.

Repealed by S.L. 2017, ch. 390, § 2.
### § 57-38-30.2. Surtax on income.

Repealed by S.L. 1975, ch. 476, § 2.
### § 57-38-30.3. Individual, estate, and trust income tax.

1. A tax is hereby imposed for each taxable year upon income earned or received in that
taxable year by every resident and nonresident individual, estate, and trust. A taxpayer
computing the tax under this section is only eligible for those adjustments or credits
that are specifically provided for in this section. Provided, that for purposes of this
section, any person required to file a state income tax return under this chapter, but
who has not computed a federal taxable income figure, shall compute a federal
taxable income figure using a pro forma return in order to determine a federal taxable
income figure to be used as a starting point in computing state income tax under this
section. The tax for individuals is equal to North Dakota taxable income multiplied by
the rates in the applicable rate schedule in subdivisions a through d corresponding to
an individual's filing status used for federal income tax purposes. For an estate or trust,
the schedule in subdivision e must be used for purposes of this subsection.
a. Single, other than head of household or surviving spouse.
If North Dakota taxable income is:
Over Not over The tax is equal to Of amount over
$0 $44,725 $0.00 + 0.00% $0
$44,725 $225,975 $0.00 + 1.95% $44,725
$225,975 $3,534.38 + 2.50% $225,975
b. Married filing jointly and surviving spouse.
If North Dakota taxable income is:
Over Not over The tax is equal to Of amount over
$0 $74,750 $0.00 + 0.00% $0
$74,750 $275,100 $0.00 + 1.95% $74,750
$275,100 $3,906.83 + 2.50% $275,100
c. Married filing separately.
If North Dakota taxable income is:
Over Not over The tax is equal to Of amount over
$0 $37,375 $0.00 + 0.00% $0
$37,375 $137,550 $0.00 + 1.95% $37,375
$137,550 $1,953.41 + 2.50% $137,550
d. Head of household.
If North Dakota taxable income is:
Over Not over The tax is equal to Of amount over
$0 $59,950 $0.00 + 0.00% $0
$59,950 $250,550 $0.00 + 1.95% $59,950
$250,550 $3,716.70 + 2.50% $250,550
e. Estates and trusts.
If North Dakota taxable income is:
Over Not over The tax is equal to Of amount over
$0 $3,000 $0.00 + 0.00% $0
$3,000 $10,750 $0.00 + 1.95% $3,000
$10,750 $151.13 + 2.50% $10,750
f. For an individual who is not a resident of this state for the entire year, or for a
nonresident estate or trust, the tax is equal to the tax otherwise computed under
this subsection multiplied by a fraction in which:
(1) The numerator is the federal adjusted gross income allocable and
apportionable to this state; and

(2) The denominator is the federal adjusted gross income from all sources
reduced by the net income from the amounts specified in subdivisions a and
b of subsection 2.
In the case of married individuals filing a joint return, if one spouse is a resident of
this state for the entire year and the other spouse is a nonresident for part or all of
the tax year, the tax on the joint return must be computed under this subdivision.
g. The tax commissioner shall prescribe new rate schedules that apply in lieu of the
schedules set forth in subdivisions a through e. The new schedules must be
determined by increasing the minimum and maximum dollar amounts for each
income bracket for which a tax is imposed by the cost-of-living adjustment for the
taxable year as determined by the secretary of the United States treasury for
purposes of section 1(f) of the United States Internal Revenue Code of 1954, as
amended. For this purpose, the rate applicable to each income bracket may not
be changed, and the manner of applying the cost-of-living adjustment must be the
same as that used for adjusting the income brackets for federal income tax
purposes.
h. The tax commissioner shall prescribe an optional simplified method of computing
tax under this section that may be used by an individual taxpayer who is not
entitled to claim an adjustment under subsection 2 or credit against income tax
liability under subsection 7.
2. For purposes of this section, "North Dakota taxable income" means the federal taxable
income of an individual, estate, or trust as computed under the Internal Revenue Code
of 1986, as amended, adjusted as follows:
a. Reduced by interest income from obligations of the United States and income
exempt from state income tax under federal statute or United States or North
Dakota constitutional provisions.
b. Reduced by the portion of a distribution from a qualified investment fund
described in section 57-38-01 which is attributable to investments by the qualified
investment fund in obligations of the United States, obligations of North Dakota or
its political subdivisions, and any other obligation the interest from which is
exempt from state income tax under federal statute or United States or North
Dakota constitutional provisions.
c. Reduced by the amount equal to the earnings that are passed through to a
taxpayer in connection with an allocation and apportionment to North Dakota
under section 57-38-01.35.
d. Reduced by forty percent of:
(1) The excess of the taxpayer's net long-term capital gain for the taxable year
over the net short-term capital loss for that year, as computed for purposes
of the Internal Revenue Code of 1986, as amended. The adjustment
provided by this subdivision is allowed only to the extent the net long-term
capital gain is allocated to this state.
(2) Qualified dividends as defined under Internal Revenue Code section 1(h)
(11), added by section 302(a) of the Jobs and Growth Tax Relief
Reconciliation Act of 2003 [Pub. L. 108-27; 117 Stat. 752; 2 U.S.C. 963
et seq.], but only if taxed at a federal income tax rate that is lower than the
regular federal income tax rates applicable to ordinary income. If, for any
taxable year, qualified dividends are taxed at the regular federal income tax
rates applicable to ordinary income, the reduction allowed under this
subdivision is equal to thirty percent of all dividends included in federal
taxable income. The adjustment provided by this subdivision is allowed only
to the extent the qualified dividend income is allocated to this state.
e. Increased by the amount of a lump sum distribution for which income averaging
was elected under section 402 of the Internal Revenue Code of 1986 [26 U.S.C.
402], as amended. This adjustment does not apply if the taxpayer received the
lump sum distribution while a nonresident of this state and the distribution is
exempt from taxation by this state under federal law.

f. Increased by an amount equal to the losses that are passed through to a
taxpayer in connection with an allocation and apportionment to North Dakota
under section 57-38-01.35.
g. Reduced by the amount of military pay received by a taxpayer as a member of
the armed forces of the United States on federal active duty, member of the
national guard or reserve member of the armed forces of the United States, to the
extent that military pay is included in North Dakota taxable income of the
taxpayer. For purposes of this subdivision, "military pay" includes all federal pay
for training, education, mobilization, and bonuses and state pay when called to
support an emergency on state active duty.
h. Reduced by income from a new and expanding business exempt from state
income tax under section 40-57.1-04.
i. Reduced by up to ten thousand dollars of qualified expenses that are related to a
donation by a taxpayer or a taxpayer's dependent, while living, of one or more
human organs to another human being for human organ transplantation. A
taxpayer may claim the reduction in this subdivision only once for each instance
of organ donation during the taxable year in which the human organ donation and
the human organ transplantation occurs but if qualified expenses are incurred in
more than one taxable year, the reduction for those expenses must be claimed in
the year in which the expenses are incurred. For purposes of this subdivision:
(1) "Human organ transplantation" means the medical procedure by which
transfer of a human organ is made from the body of one person to the body
of another person.
(2) "Organ" means all or part of an individual's liver, pancreas, kidney, intestine,
lung, or bone marrow.
(3) "Qualified expenses" means lost wages not compensated by sick pay and
unreimbursed medical expenses as defined for federal income tax
purposes, to the extent not deducted in computing federal taxable income,
whether or not the taxpayer itemizes federal income tax deductions.
j. Increased by the amount of the contribution upon which the credit under section
federal taxable income.
k. Reduced by the amount of any payment received by a veteran or beneficiary of a
veteran under section 37-28-03 or 37-28-04.
l. Reduced by the amount received by a taxpayer that was paid by an employer
under paragraph 4 of subdivision a of subsection 2 of section 57-38-01.25 to hire
the taxpayer for a hard-to-fill position under section 57-38-01.25, but only to the
extent the amount received by the taxpayer is included in federal taxable income.
The reduction applies only if the employer is entitled to the credit under section
### § 57-38-01.25. The taxpayer must attach a statement from the employer in which

the employer certifies that the employer is entitled to the credit under section
of the exemption under this section.
m. Reduced by the amount up to a maximum of five thousand dollars, or ten
thousand dollars if a joint return is filed, for contributions made under a higher
education savings plan administered by the Bank of North Dakota, pursuant to
section 6-09-38.
n. Reduced by the amount of income of a taxpayer, who resides anywhere within
the exterior boundaries of a reservation situated in this state or situated both in
this state and in an adjoining state and who is an enrolled member of a federally
recognized Indian tribe, from activities or sources anywhere within the exterior
boundaries of a reservation situated in this state or both situated in this state and
in an adjoining state.
o. For married individuals filing jointly, reduced by an amount equal to the excess of
the recomputed itemized deductions or standard deduction over the amount of
the itemized deductions or standard deduction deducted in computing federal

taxable income. For purposes of this subdivision, "itemized deductions or
standard deduction" means the amount under section 63 of the Internal Revenue
Code that the married individuals deducted in computing their federal taxable
income and "recomputed itemized deductions or standard deduction" means an
amount determined by computing the itemized deductions or standard deduction
in a manner that replaces the basic standard deduction under section 63(c)(2) of
the Internal Revenue Code for married individuals filing jointly with an amount
equal to double the amount of the basic standard deduction under section 63(c)
(2) of the Internal Revenue Code for a single individual other than a head of
household and surviving spouse. If the married individuals elected under
section 63(e) of the Internal Revenue Code to deduct itemized deductions in
computing their federal taxable income even though the amount of the allowable
standard deduction is greater, the reduction under this subdivision is not allowed.
Married individuals filing jointly shall compute the available reduction under this
subdivision in a manner prescribed by the tax commissioner.
p. Reduced by an amount equal to four thousand one hundred fifty dollars for
taxable year 2018, for each birth resulting in stillbirth, as defined in section
23-02.1-01, for which a fetal death certificate has been filed under section
### § 23-02.1-20. For taxable years beginning after December 31, 2018, the deduction

amount must be adjusted annually on January first of each year by the
cost-of-living adjustment. For purposes of this subdivision, "cost-of-living
adjustment" means the percentage increase in the consumer price index for all
urban consumers in the midwest region as determined by the United States
department of labor, bureau of labor statistics, for the most recent year ending
December thirty-first. The exemption may only be claimed in the taxable year in
which the stillbirth occurred.
q. Reduced by the amount of expenses incurred by an employee which are directly
related to the attainment of higher education or career and technical education
which are reimbursed by the employee's employer, but only to the extent the
amount of reimbursement is reported as federal taxable income.
r. Reduced by the amount received by a taxpayer as retired military personnel
benefits, including retired military personnel benefits paid to the surviving spouse
of a deceased retired member of the armed forces of the United States, a reserve
component of the armed forces of the United States, or the national guard, but
only to the extent the amount was included in federal taxable income.
s. Reduced by the amount of social security benefits included in a taxpayer's federal
adjusted gross income under section 86 of the Internal Revenue Code.
t. Reduced by the amount of retired law enforcement personnel benefits received
by a taxpayer who has served a combined total of at least twenty years as a
peace officer or has medically retired from the taxpayer's duties as a peace
officer with a medical certificate due to a permanent mental or physical disability
that rendered the taxpayer unable to discharge the taxpayer's duties as a peace
officer, but only to the extent the amount was included in federal taxable income.
For purposes of this subdivision:
(1) "Peace officer" means a public servant authorized by law or by a
government agency or branch of the United States, a state, or a political
subdivision of a state to enforce the law and to conduct or engage in
investigations of violations of the law.
(2) "Retired law enforcement personnel benefits" means retirement income
received by a taxpayer eligible to receive retirement income attributable to
the taxpayer's employment as a peace officer from a retirement plan
maintained by or through the employer from which the taxpayer retired as a
peace officer.
3. The same filing status used when filing federal income tax returns must be used when
filing state income tax returns.

4. a. A resident individual, estate, or trust is entitled to a credit against the tax imposed
under this section for the amount of income tax paid by the taxpayer for the
taxable year by another state or territory of the United States or the District of
Columbia on income derived from sources in those jurisdictions that is also
subject to tax under this section.
b. For an individual, estate, or trust that is a resident of this state for the entire
taxable year, the credit allowed under this subsection may not exceed an amount
equal to the tax imposed under this section multiplied by a ratio equal to federal
adjusted gross income derived from sources in the other jurisdiction divided by
federal adjusted gross income less the amounts under subdivisions a and b of
subsection 2.
c. For an individual, estate, or trust that is a resident of this state for only part of the
taxable year, the credit allowed under this subsection may not exceed the lesser
of the following:
(1) The tax imposed under this chapter multiplied by a ratio equal to federal
adjusted gross income derived from sources in the other jurisdiction
received while a resident of this state divided by federal adjusted gross
income derived from North Dakota sources less the amounts under
subdivisions a and b of subsection 2.
(2) The tax paid to the other jurisdiction multiplied by a ratio equal to federal
adjusted gross income derived from sources in the other jurisdiction
received while a resident of this state divided by federal adjusted gross
income derived from sources in the other states.
d. The tax commissioner may require written proof of the tax paid to another state.
The required proof must be provided in a form and manner as determined by the
tax commissioner.
5. Individuals, estates, or trusts that file an amended federal income tax return changing
their federal taxable income figure for a year for which an election to file state income
tax returns has been made under this section shall file an amended state income tax
return to reflect the changes on the federal income tax return.
6. The tax commissioner may prescribe procedures and guidelines to prevent requiring
income that had been previously taxed under this chapter from becoming taxed again
because of the provisions of this section and may prescribe procedures and guidelines
to prevent any income from becoming exempt from taxation because of the provisions
of this section if it would otherwise have been subject to taxation under the provisions
of this chapter.
7. A taxpayer filing a return under this section is entitled to the following tax credits:
a. Family care tax credit under section 57-38-01.20.
b. Renaissance zone tax credits under sections 40-63-04, 40-63-06, and 40-63-07.
c. Agricultural business investment tax credit under section 57-38.6-03.
d. Seed capital investment tax credit under section 57-38.5-03.
e. Planned gift tax credit under section 57-38-01.21.
f. Biodiesel fuel or green diesel fuel tax credits under sections 57-38-01.22 and
57-38-01.23.
g. Internship employment tax credit under section 57-38-01.24.
h. Workforce recruitment credit under section 57-38-01.25.
i. Marriage penalty credit under section 57-38-01.28.
j. Research and experimental expenditures under section 57-38-30.5.
k. Geothermal energy device installation credit under section 57-38-01.8.
l. Long-term care partnership plan premiums income tax credit under section
57-38-29.3.
m. Employer tax credit for salary and related retirement plan contributions of
mobilized employees under section 57-38-01.31.
n. Income tax credit for passthrough entity contributions to private education
institutions under section 57-38-01.7.
o. Angel investor tax credit under section 57-38-01.26.

p. Income tax credit for employment of individuals with developmental disabilities or
severe mental illness under section 57-38-01.16.
q. Adoption tax credit under section 57-38-01.38.
r. Tax credit for contributions to a maternity home, child-placing agency, or
pregnancy help center under section 57-38-01.39.
s. Apprenticeship tax credit under section 57-38-01.40.
t. Twenty-first century manufacturing and animal agricultural workforce incentive
under section 57-38-01.41.
u. Child care contribution credit under section 57-38-01.42.
8. A taxpayer filing a return under this section is entitled to the exemption provided under
section 40-63-04.
9. a. If an individual taxpayer engaged in a farming business elects to average farm
income under section 1301 of the Internal Revenue Code [26 U.S.C. 1301], the
taxpayer may elect to compute tax under this subsection. If an election to
compute tax under this subsection is made, the tax imposed by subsection 1 for
the taxable year must be equal to the sum of the following:
(1) The tax computed under subsection 1 on North Dakota taxable income
reduced by elected farm income.
(2) The increase in tax imposed by subsection 1 which would result if North
Dakota taxable income for each of the three prior taxable years were
increased by an amount equal to one-third of the elected farm income.
However, if other provisions of this chapter other than this section were used
to compute the tax for any of the three prior years, the same provisions in
effect for that prior tax year must be used to compute the increase in tax
under this paragraph. For purposes of applying this paragraph to taxable
years beginning before January 1, 2001, the increase in tax must be
determined by recomputing the tax in the manner prescribed by the tax
commissioner.
b. For purposes of this subsection, "elected farm income" means that portion of
North Dakota taxable income for the taxable year which is elected farm income
as defined in section 1301 of the Internal Revenue Code of 1986 [26 U.S.C.
1301], as amended, reduced by the portion of an exclusion claimed under
subdivision d of subsection 2 that is attributable to a net long-term capital gain
included in elected farm income.
c. The reduction in North Dakota taxable income under this subsection must be
taken into account for purposes of making an election under this subsection for
any subsequent taxable year.
d. The tax commissioner may prescribe rules, procedures, or guidelines necessary
to administer this subsection.
10. The tax commissioner may prescribe tax tables, to be used in computing the tax
according to subsection 1, if the amounts of the tax tables are based on the tax rates
set forth in subsection 1. If prescribed by the tax commissioner, the tables must be
followed by every individual, estate, or trust determining a tax under this section.
### § 57-38-30.4. Income tax credit for comprehensive health association assessments.

Repealed by S.L. 2009, ch. 545, § 32.
### § 57-38-30.5. Income tax credit for research and experimental expenditures.

A taxpayer is allowed a credit against the tax imposed under section 57-38-30 or 57-38-30.3
for conducting qualified research in this state.
1. The amount of the credit for taxpayers that earned or claimed a credit under this
section in taxable years beginning before January 1, 2007, is calculated as follows:
a. For the first taxable year beginning after December 31, 2006, the credit is equal
to twenty-five percent of the first one hundred thousand dollars of the qualified
research expenses for the taxable year in excess of the base amount and equal

to seven and one-half percent of all qualified research expenses for the taxable
year more than one hundred thousand dollars in excess of the base amount.
b. For the second taxable year beginning after December 31, 2006, the credit is
equal to twenty-five percent of the first one hundred thousand dollars of the
qualified research expenses for the taxable year in excess of the base amount
and equal to eleven percent of all qualified research expenses for the taxable
year more than one hundred thousand dollars in excess of the base amount.
c. For the third taxable year beginning after December 31, 2006, the credit is equal
to twenty-five percent of the first one hundred thousand dollars of the qualified
research expenses for the taxable year in excess of the base amount and equal
to fourteen and one-half percent of all qualified research expenses for the taxable
year more than one hundred thousand dollars in excess of the base amount.
d. For the fourth through the tenth taxable years beginning after December 31,
2006, the credit is equal to twenty-five percent of the first one hundred thousand
dollars of the qualified research expenses for the taxable year in excess of the
base amount and equal to eighteen percent of all qualified research expenses for
the taxable year more than one hundred thousand dollars in excess of the base
amount.
e. Except as provided in subsection 4, for the eleventh taxable year beginning after
December 31, 2006, and for each subsequent taxable year in which the taxpayer
conducts qualified research in this state, the credit is equal to twenty-five percent
of the first one hundred thousand dollars of the qualified research expenses for
the taxable year in excess of the base amount and equal to eight percent of all
qualified research expenses for the taxable year more than one hundred
thousand dollars in excess of the base amount.
f. The maximum annual credit a taxpayer may obtain under this subsection is two
million dollars. Any credit amount earned in the taxable year in excess of two
million dollars may not be carried back or forward as provided in subsection 8.
2. Except as provided in subsection 4, for taxpayers that have not earned or claimed a
credit under this section in taxable years beginning before January 1, 2007, and which
begin conducting qualified research in North Dakota in any of the first four taxable
years beginning after December 31, 2006, the amount of the credit is equal to
twenty-five percent of the first one hundred thousand dollars of the qualified research
expenses for the taxable year in excess of the base amount and equal to twenty
percent of all qualified research expenses for the taxable year more than one hundred
thousand dollars in excess of the base amount.
a. This rate applies through the tenth taxable year beginning after December 31,
2006.
b. For the eleventh taxable year beginning after December 31, 2006, and for each
subsequent taxable year in which the taxpayer conducts qualified research in this
state, the credit is equal to twenty-five percent of the first one hundred thousand
dollars of the qualified research expenses for the taxable year in excess of the
base amount and equal to eight percent of all qualified research expenses for the
taxable year more than one hundred thousand dollars in excess of the base
amount.
3. Except as provided in subsection 4, for taxpayers that have not earned or claimed a
credit under this section in taxable years beginning before January 1, 2007, and which
begin conducting qualified research in North Dakota in any taxable year following the
fourth taxable year beginning after December 31, 2006, the amount of the credit is
equal to twenty-five percent of the first one hundred thousand dollars of the qualified
research expenses for the taxable year in excess of the base amount and equal to
eight percent of all qualified research expenses for the taxable year more than one
hundred thousand dollars in excess of the base amount.
4. A taxpayer may elect to use the alternative simplified credit under section 41(c)(5) of
the Internal Revenue Code [26 U.S.C. 41(c)] the amount of the credit under this
subsection is:

a. Seventeen and one-half percent of the first one hundred thousand dollars of the
alternative excess research and development for the taxable year plus five and
six-tenths percent of the alternative excess research and development for the
taxable year in excess of one hundred thousand dollars.
b. If a taxpayer has zero qualified research expenses in any one of the three taxable
years preceding the taxable year for which the credit is determined, the amount of
qualified research expenses for the taxable year multiplied by seven and one-half
percent of the first one hundred thousand dollars plus two and four-tenths percent
of qualified research expenses for the taxable year more than one hundred
thousand dollars.
5. For purposes of this section:
a. "Alternative excess research and development" means the amount of qualified
research expenses which exceeds fifty percent of the average qualified research
expenses for the three taxable years preceding the taxable year for which the
credit is being determined.
b. "Alternative simplified credit" means the computation set forth in section 41(c)(5)
of the Internal Revenue Code [26 U.S.C. 41(c)(5)], except the term does not
include qualified research expenses incurred outside the state of North Dakota.
c. "Base amount" means base amount as defined in section 41(c) of the Internal
Revenue Code [26 U.S.C. 41(c)], except it does not include research conducted
outside the state of North Dakota.
d. "Director" means the director of the department of commerce division of
economic development and finance.
e. "Primary sector business" has the meaning provided in section 1-01-49.
f. "Qualified research" means qualified research as defined in section 41(d) of the
Internal Revenue Code [26 U.S.C. 41(d)], except it does not include research
conducted outside the state of North Dakota.
g. "Qualified research and development company" means a taxpayer that is a
primary sector business with annual gross revenues of less than seven hundred
fifty thousand dollars and which has not conducted new research and
development in North Dakota.
h. "Qualified research expenses" means qualified research expenses as defined in
section 41(b) of the Internal Revenue Code [26 U.S.C. 41(b)], except it does not
include expenses incurred for basic research conducted outside the state of
North Dakota.
6. The credit allowed under this section for the taxable year may not exceed the liability
for tax under this chapter.
7. In the case of a taxpayer that is a partner, shareholder, or a member in a passthrough
entity, the credit allowed for the taxable year may not exceed an amount separately
computed with respect to the taxpayer's interest in the trade, business, or entity equal
to the amount of tax attributable to that portion of the taxpayer's taxable income which
is allocable or apportionable to the taxpayer's interest in the trade, business, or entity.
8. Except as provided in subsection 1, if the amount of the credit determined under this
section for any taxable year exceeds the limitation under subsection 6, the excess may
be used as a research credit carryback to each of the three preceding taxable years
and a research credit carryover to each of the fifteen succeeding taxable years. The
entire amount of the excess unused credit for the taxable year must be carried first to
the earliest of the taxable years to which the credit may be carried and then to each
successive year to which the credit may be carried and the amount of the unused
credit which may be added under this subsection may not exceed the taxpayer's
liability for tax less the research credit for the taxable year. A claim to carry back the
credit under this section must be filed within three years of the due date or extended
due date of the return for the taxable year in which the credit was earned.
9. A taxpayer that is certified as a qualified research and development company by the
director may elect to sell, transfer, or assign all or part of the unused tax credit earned
under this section. The director shall certify whether a taxpayer that has requested to

become a qualified research and development company meets the requirements of
subsection 5. The director shall establish the necessary forms and procedures for
certifying qualifying research and development companies. The director shall issue a
certification letter to the taxpayer and the tax commissioner. A tax credit can be sold,
transferred, or assigned subject to the following:
a. A taxpayer's total credit assignment under this section may not exceed one
hundred thousand dollars over any combination of taxable years.
b. If the taxpayer elects to assign or transfer an excess credit under this subsection,
the tax credit transferor and the tax credit purchaser jointly shall file with the tax
commissioner a copy of the purchase agreement and a statement containing the
names, addresses, and taxpayer identification numbers of the parties to the
transfer, the amount of the credit being transferred, the gross proceeds received
by the transferor, and the taxable year or years for which the credit may be
claimed. The taxpayer and the purchaser also shall file a document allowing the
tax commissioner to disclose tax information to either party for the purpose of
verifying the correctness of the transferred tax credit. The purchase agreement,
supporting statement, and waiver must be filed within thirty days after the date
the purchase agreement is fully executed.
c. The purchaser of the tax credit shall claim the credit beginning with the taxable
year in which the credit purchase agreement was fully executed by the parties. A
purchaser of a tax credit under this section has only such rights to claim and use
the credit under the terms that would have applied to the tax credit transferor,
except the credit purchaser may not carry back the credit as otherwise provided
in this section. This subsection does not limit the ability of the tax credit purchaser
to reduce the tax liability of the purchaser, regardless of the actual tax liability of
the tax credit transferor.
d. The original purchaser of the tax credit may not sell, assign, or otherwise transfer
the credit purchased under this section.
e. If the amount of the credit available under this section is changed as a result of
an amended return filed by the transferor, or as the result of an audit conducted
by the internal revenue service or the tax commissioner, the transferor shall
report to the purchaser the adjusted credit amount within thirty days of the
amended return or within thirty days of the final determination made by the
internal revenue service or the tax commissioner. The tax credit purchaser shall
file amended returns reporting the additional tax due or claiming a refund as
provided in section 57-38-38 or 57-38-40, and the tax commissioner may audit
these returns and assess or issue refunds, even though other time periods
prescribed in these sections may have expired for the purchaser.
f. Gross proceeds received by the tax credit transferor must be assigned to North
Dakota. The amount assigned under this subsection cannot be reduced by the
taxpayer's income apportioned to North Dakota or any North Dakota net
operating loss of the taxpayer.
g. The tax commissioner has four years after the date of the credit assignment to
audit the returns of the credit transferor and the purchaser to verify the
correctness of the amount of the transferred credit and if necessary assess the
credit purchaser if additional tax is found due. This subdivision does not limit or
restrict any other time period prescribed in this chapter for the assessment of tax.
h. The tax commissioner may adopt rules to permit verification of the validity and
timeliness of the transferred tax credit.
10. If a taxpayer acquires or disposes of the major portion of a trade or business or the
major portion of a separate unit of a trade or business in a transaction with another
taxpayer, the taxpayer's qualified research expenses and base period must be
adjusted in the manner provided by section 41(f)(3) of the Internal Revenue Code
[26 U.S.C. 41(f)(3)].
11. If a taxpayer entitled to the credit provided by this section is a member of a group of
corporations filing a North Dakota consolidated tax return using the combined

reporting method, the credit may be claimed against the aggregate North Dakota tax
liability of all the corporations included in the North Dakota consolidated return. This
section does not apply to tax credits received or purchased under subsection 9.
12. An individual, estate, or trust that purchases a credit under this section is entitled to
claim the credit against state income tax liability under section 57-38-30.3.
13. A passthrough entity entitled to the credit under this section must be considered to be
the taxpayer for purposes of calculating the credit. The amount of the allowable credit
must be determined at the passthrough entity level. The total credit determined at the
entity level must be passed through to the partners, shareholders, or members in
proportion to their respective interests in the passthrough entity. An individual taxpayer
may take the credit passed through under this subsection against the individual's state
income tax liability under section 57-38-30.3.
14. For any taxable year in which the federal research tax credit provisions of section 41 of
the Internal Revenue Code are ineffective, the provisions of section 41 of the Internal
Revenue Code [26 U.S.C. 41] referenced in this section have the same meaning and
application as provided in section 41 of the Internal Revenue Code, as amended
through the most recent taxable year in which the provisions were in effect.
15. If a taxpayer claims a credit under this section on the taxpayer's original return, the
taxpayer's election to calculate the credit under subsection 1, 2, 3, or 4 is binding for
the taxable year in which the election is made. A taxpayer claiming a credit for tax
years beginning before January 1, 2019, may not file an amended return for the
purpose of calculating the credit under subsection 4.
### § 57-38-30.6. Corporate income tax credit for biodiesel or green diesel production or

soybean and canola crushing facility equipment costs.
A taxpayer is entitled to a credit against tax liability determined under section 57-38-30 in
the amount of ten percent per year for five years of the taxpayer's direct costs incurred after
December 31, 2002, to adapt or add equipment to retrofit an existing facility or construction of a
new facility in this state for the purpose of producing or blending diesel fuel containing at least
two percent biodiesel fuel or green diesel fuel by volume or of the taxpayer's direct costs
incurred after December 31, 2008, to adapt or add equipment to retrofit an existing facility or
construction of a new facility in this state for the purpose of producing crushed soybeans or
canola. For purposes of this section, "biodiesel" and "green diesel" mean fuel as defined in
section 57-43.2-01. The credit under this section may not exceed the taxpayer's liability as
determined under this chapter for the taxable year and each year's credit amount may be
carried forward for up to five taxable years. A taxpayer is limited to two hundred fifty thousand
dollars in the cumulative amount of credits under this section for all taxable years. A taxpayer
may not claim a credit under this section for any taxable year before the taxable year in which
the facility begins production or blending of diesel fuel containing at least two percent biodiesel
fuel or green diesel fuel by volume or begins crushing soybeans or canola, but eligible costs
incurred before the taxable year production, blending, or crushing begins may be claimed for
purposes of the credit under this section for taxable years on or after the taxable year
production, blending, or crushing begins.
### § 57-38-31. Duty of individuals and fiduciaries to make return.

1. Every resident individual, every fiduciary for a resident individual, estate, or trust, who
is required by the provisions of the United States Internal Revenue Code of 1954, as
amended, to file a federal income tax return, and every individual or fiduciary who
receives income derived from sources in this state, shall file an income tax return with
the state tax commissioner in such form as the commissioner may prescribe. Any
person who is required to file a state income tax return but not required to compute a
federal taxable income figure for federal income tax purposes is required to compute
such a federal taxable income figure using a pro forma return pursuant to the
provisions of the Internal Revenue Code of 1954, as amended, in order to determine a
starting point for the computation of state income tax. Any person required to file an
income tax return pursuant to the provisions of the United States Internal Revenue

Code of 1954, as amended, with respect to income that is exempt from taxation under
this chapter either because it cannot be constitutionally taxed or because it is exempt
by any provision of law shall file a return prescribed by the tax commissioner in such
form as will permit computation of the tax liability under this chapter on only that part of
the income which is subject to taxation pursuant to the provisions of this chapter;
provided, that such person elects to use that form of return rather than any other form
of return that may be prescribed. The return must be signed by the person required to
make it and must contain a written declaration that it is made and subscribed under
penalties of perjury.
2. The same filing status and deduction method used by a husband and wife when filing
federal income tax returns must be used when filing state income tax returns.
3. If the taxpayer is unable to make the taxpayer's own return, the return must be made
by a duly authorized agent or by a guardian or other person charged with the care of
the person or property of the taxpayer.
4. Every fiduciary subject to taxation under the provisions of this chapter shall make a
return for the individual, estate, or trust for which the fiduciary acts; the return must be
signed by the person required to make it and must contain a written declaration that it
is made and subscribed under penalties of perjury.
5. The return made by a fiduciary must state such facts as the tax commissioner may
prescribe.
6. A fiduciary required to make a return under this chapter is subject to all of the
provisions of the chapter which apply to an individual.
7. If required by the tax commissioner, the return must be accompanied by a true copy of
the federal income tax return of the taxpayer or by equivalent information in the form
and manner prescribed by the tax commissioner. A true copy of the federal income tax
return of the taxpayer or equivalent information must be furnished to the tax
commissioner by the taxpayer or fiduciary at any time after filing of the return required
by this chapter if so required by the tax commissioner.
8. 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.
### § 57-38-31.1. Composite returns.

1. For purposes of this section, unless the context otherwise requires:
a. "Member" means an individual or passthrough entity that is a shareholder of an
S corporation; a partner in a general partnership, a limited partnership, or a
limited liability partnership; or a member of a limited liability company, settlor of a
grantor trust, or a beneficiary of a trust.
b. "Nonresident" means an individual who is not a resident of or domiciled in the
state, a trust not organized in the state, or a passthrough entity that does not
have its commercial domicile in the state.
c. "Passthrough entity" means a corporation that for the applicable tax year is
treated as an S corporation under the Internal Revenue Code, a limited liability
company that for the applicable tax year is not taxed as a corporation for federal
income tax purposes, or a general partnership, limited partnership, limited liability
partnership, limited liability limited partnership, trust, grantor trust, or similar entity
recognized by the laws of this state that is not taxed for federal income tax
purposes at the entity level.
2. a. A passthrough entity may file a composite income tax return on behalf of electing
nonresident members reporting and paying income tax, at the highest marginal
rate provided in section 57-38-30.3, on the members' pro rata or distributive
shares of income of the passthrough entity from doing business in, or deriving
income from sources within, this state.

b. A nonresident member whose only source of income within the state is from one
or more passthrough entities may elect to be included in a composite return filed
under this section.
c. A nonresident member that has been included in a composite return may file an
individual income tax return and shall receive credit for tax paid on the member's
behalf by the passthrough entity.
3. a. A passthrough entity shall withhold income tax, at the highest tax rate provided in
section 57-38-30.3, on the share of income of the entity distributed to each
nonresident member and pay the withheld amount in the manner prescribed by
the tax commissioner. The passthrough entity is liable to the state for the
payment of the tax required to be withheld under this section and is not liable to
any member for the amount withheld and paid in compliance with this section. A
member of a passthrough entity that is itself a passthrough entity (a lower-tier
passthrough entity) is subject to this same requirement to withhold and pay
income tax on the share of income distributed by the lower-tier passthrough entity
to each of its nonresident members. The tax commissioner shall apply tax
withheld and paid by a passthrough entity on distributions to a lower-tier
passthrough entity to the withholding required of that lower-tier passthrough
entity.
b. At the time of a payment made under this section, a passthrough entity shall
deliver to the tax commissioner a return on a form prescribed by the tax
commissioner showing the total amounts paid or credited to its nonresident
members, the amount withheld in accordance with this section, and any other
information the tax commissioner may require. A passthrough entity shall furnish
to its nonresident member annually, but not later than the fifteenth day of the third
month after the end of its taxable year, a record of the amount of tax withheld on
behalf of the member on a form prescribed by the tax commissioner.
c. Notwithstanding subdivision a, a passthrough entity is not required to withhold tax
for a nonresident member if:
(1) The member has a pro rata or distributive share of income of the
passthrough entity from doing business in, or deriving income from sources
within, this state of less than one thousand dollars per annual accounting
period;
(2) The tax commissioner has determined by rule, ruling, or instruction that the
member's income is not subject to withholding;
(3) The member elects to have the tax due paid as part of a composite return
filed by the passthrough entity under subsection 2;
(4) The entity is a publicly traded partnership as defined by section 7704(b) of
the Internal Revenue Code which is treated as a partnership for the
purposes of the Internal Revenue Code and which has agreed to file an
annual information return reporting the name, address, taxpayer
identification number, and other information requested by the tax
commissioner of each unitholder with an income in the state in excess of
five hundred dollars; or
(5) The member is a lower-tier passthrough entity that elects to be exempted
from the withholding requirement under this subsection. The election must
be made on a form and in a manner prescribed by the tax commissioner.
The form must include a statement that the member certifies that the
member will file any return and pay any tax required by this chapter on its
distributive share of income from the source passthrough entity and that the
member is subject to this state's jurisdiction for the collection of that tax and
any applicable penalty and interest. The tax commissioner may revoke the
exemption under this paragraph if the source passthrough entity or member
fails to comply with the requirements of this paragraph. If the exemption is
revoked, the source passthrough entity shall begin withholding from the
member within sixty days of receiving notification of the revocation from the

tax commissioner. The tax commissioner may prescribe any procedures and
guidelines necessary to administer this paragraph.
d. A passthrough entity failing to file a return, or failing to withhold or remit the tax
withheld, as required by this section, is subject to the provisions of
section 57-38-45.
### § 57-38-32. Duty of corporations to make returns.

Each corporation that receives income from the sources designated in section 57-38-14,
whether or not required to file an income tax return pursuant to the provisions of the United
States Internal Revenue Code of 1954, as amended, shall, unless exempted by the provisions
of section 57-38-09, make a return in such form as the tax commissioner may prescribe, stating
specifically such facts as the tax commissioner may require for the purpose of making any
computation required by this chapter. Any corporation which is required to file a state income tax
return but not required to compute a federal taxable income figure for federal income tax
purposes is required to compute such a federal taxable income figure using a pro forma return
pursuant to the provisions of the Internal Revenue Code of 1954, as amended, in order to
determine a starting point for the computation of state income tax. Any foreign loan and
investment company engaged in business in this state, and whose income in this state consists
solely of income exempt from taxation under this chapter, need not file an annual report unless
specially requested to do so by the tax commissioner, but may file in lieu thereof an affidavit
claiming exemption under this chapter. The return must be signed by the president, vice
president, treasurer, assistant treasurer, chief accounting officer, or any other officer duly
authorized so to act and it and any other declaration, statement, or document required to be
made must contain or be verified by a written declaration that it is made under the penalties of
perjury. 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.
### § 57-38-33. Failure to complete return or supply information.

If the tax commissioner is of the opinion that any person has failed to include in a return as
filed, or to provide during the course of an audit, either intentionally or through error or for any
other reason, information necessary to properly determine North Dakota taxable income, the tax
commissioner may require from that person an amended return or any supplementary
information as is necessary to properly and accurately determine a person's North Dakota
taxable income, in the form as the tax commissioner shall prescribe. If the person fails or
refuses to file the amended return or to furnish the supplementary information requested, the tax
commissioner may, after thirty days' notice, determine the North Dakota taxable income of the
person from the best information available and assess any tax due, including interest and
penalty. If the tax commissioner finds that the taxpayer's failure to provide an amended return or
supplementary information was unreasonable and willful, the assessment of tax is final as to the
tax commissioner. A North Dakota district court may reverse the tax commissioner's assessment
only if it finds that the taxpayer's failure was not willful or that the tax commissioner's request
was unreasonable.
### § 57-38-34. Time and place of filing returns - Interest on tax when time for filing is

extended.
1. Returns must be in such form as the tax commissioner from time to time may
prescribe and may include the requirement that a copy of the taxpayer's federal
income tax return or a portion thereof or information reflected thereon be attached to,
furnished with, or included in the taxpayer's state income tax return. The taxpayer's
state income tax return must contain a method for the taxpayer to identify the school
district in which the taxpayer resides and must be filed with the tax commissioner's
office in Bismarck, North Dakota. The tax commissioner shall prepare blank forms for

use in making returns and shall cause them to be distributed throughout this state, but
failure to receive or secure a form does not relieve a taxpayer from making a return.
2. Returns made on the basis of the calendar year must be filed on or before the fifteenth
day of April following the close of the calendar year and returns made on the basis of a
fiscal year must be filed on or before the fifteenth day of the fourth month following the
close of the fiscal year. A return filed for a period of less than one year must be filed on
or before April fifteenth, or on or before the date prescribed by the United States
internal revenue service, whichever is later.
3. Returns for cooperatives, domestic international sales corporations, and foreign sales
corporations, however, made on the basis of the calendar year must be filed on or
before the fifteenth day of September following the close of the calendar year and
returns made on the basis of a fiscal year must be filed on or before the fifteenth day
of the ninth month following the close of the fiscal year.
4. Returns for exempt organizations required to report unrelated business taxable income
under subsection 2 of section 57-38-09 made on the basis of the calendar year must
be filed on or before the fifteenth day of May following the close of the calendar year
and returns made on the basis of a fiscal year must be filed on or before the fifteenth
day of the fifth month following the close of the fiscal year.
5. A taxpayer actively serving in the armed forces or merchant marine, outside the
boundaries of the United States, may defer the filing of an income tax return and the
payment of the income tax until such time as the federal income tax return is required
to be filed at which time the state income tax return, with payment of tax, will also be
due. No interest or penalty accrues to the date of such filing.
6. The tax commissioner may grant a reasonable extension of time for filing a return
when, in the judgment of the tax commissioner, good cause exists.
7. For a person that was subject to the tax under chapter 57-35.3 for the calendar year
ending December 31, 2012, payment of the tax under this chapter is due six months
after the due date of the return as required under this section. The provisions of
subdivision a of subsection 1 of section 57-38-45 do not apply to the tax due under this
subsection. This subsection applies to the first tax year beginning after December 31,
2012.
8. A person that previously reported under chapter 57-35.3 on a calendar year basis and
files its federal income tax return on a fiscal year basis must file a short period return
for the period beginning January 1, 2013, and ending on the last day of the tax year in
calendar year 2013.
### § 57-38-34.1. Optional card income tax return.

Repealed by S.L. 2001, ch. 526, § 3.
### § 57-38-34.2. Filing of separate income tax returns by a husband and wife after joint

income tax returns have been filed.
Repealed by S.L. 1989, ch. 710, § 4.
### § 57-38-34.3. Optional contributions to nongame wildlife fund.

An individual taxpayer may designate on the tax return of that individual a contribution to the
nongame wildlife fund of any amount of one dollar or more to be added to tax liability or
deducted from any refund that would otherwise be payable by or to the individual. On the
individual state income tax return the tax commissioner shall notify the individual of this optional
contribution. The amount of these optional contributions must be transferred by the tax
commissioner to the state treasurer for deposit in the nongame wildlife fund for use as provided
in section 20.1-02-16.2.
### § 57-38-34.4. Requirement to report federal changes.

1. If a person's federal taxable income or federal income tax liability for any taxable year
is changed or corrected by the United States internal revenue service, or other

competent authority, the person shall report the changes or corrections within ninety
days after the date of the final determination of them by filing an amended state
income tax return or other information as required by the tax commissioner.
2. Notwithstanding the provisions of subsection 1, if a person files an amended federal
income tax return for any taxable year, the person shall file an amended state income
tax return and a copy of the amended federal income tax return within ninety days
after the amended federal income tax return is filed.
### § 57-38-34.5. Optional contributions to centennial tree program trust fund.

Expired under S.L. 1991, ch. 573, § 2.
### § 57-38-34.6. Optional contributions to trees for North Dakota program trust fund.

An individual may designate on the tax return of that individual a contribution to the trees for
North Dakota program trust fund of any amount of one dollar or more to be added to tax liability
or deducted from any refund that would otherwise be payable by or to the individual. The tax
commissioner shall notify taxpayers of this optional contribution on the individual state income
tax returns. The tax commissioner shall transfer the amount of optional contributions under this
section to the state treasurer for deposit in the trees for North Dakota program trust fund for use
as provided in chapter 4.1-21.
### § 57-38-34.7. Optional contributions to veterans' postwar trust fund.

An individual may designate on the tax return of that individual a contribution to the
veterans' postwar trust fund of any amount of one dollar or more to be added to tax liability or
deducted from any refund that otherwise would be payable by or to the individual. The tax
commissioner shall notify taxpayers of this optional contribution on the individual state income
tax returns. The tax commissioner shall transfer the amount of optional contributions under this
section to the state treasurer for deposit in the veterans' postwar trust fund.
### § 57-38-35. Payment of tax.

Every taxpayer shall compute the amount of tax due under the return and shall attach
thereto a check, draft, or money order, payable to the state tax commissioner, Bismarck, North
Dakota, for the amount of the tax computed.
### § 57-38-35.1. Minimum refunds and collections - Application of refunds.

1. No refunds may be made by the tax commissioner to any taxpayer unless the amount
to be refunded, including interest, is at least five dollars. Notwithstanding the
provisions of section 57-38-55, the tax commissioner shall transfer any amount that is
not refunded to a taxpayer under this subsection to the state treasurer for deposit in
the organ transplant support fund.
2. No remittance of tax need be made nor any assessment or collection of tax should be
made unless the amount is at least five dollars, including penalties and interest.
3. All refunds and credits for overpayment to any taxpayer, including excess income tax
withheld or overpayment of estimated tax, may be applied to payment of taxpayer's
unpaid tax, interest, or penalty or delayed until taxpayer's delinquent returns have
been filed.
### § 57-38-35.2. Interest payments.

1. Interest at the rate of one percent per month or fraction of a month must be allowed
and paid upon overpayments of tax as follows:
a. Interest on refunds arising from excess income tax withholding or overpayment of
estimated tax accrues for payment forty-five days after the due date of the return
or after the date the return was filed, whichever comes later.
b. Interest on refunds arising from amended returns or claims made for credit or
refund accrues for payment from the due date of the return to the date of

payment of the refund excepting the month in which the return was required to be
filed.
c. Interest on refunds arising from net operating loss carrybacks, capital loss
carrybacks, or tax credit carrybacks accrues for payment from the due date of the
return for the year, determined without regard to extensions of the time for filing,
giving rise to the loss carryback, to the date of payment of the refund, except that
no interest accrues if the refund payment is made within forty-five days of the
date the amended return or claim is filed to claim the refund attributable to the
carryback.
2. No interest may be paid on refunds arising from amended returns or other claims filed
for taxable years beginning before January 1, 1979.
### § 57-38-36. When payment of tax may be made in quarterly installments.

Repealed by S.L. 1983, ch. 637, § 1.
### § 57-38-37. Receipt.

The tax commissioner, as soon as possible after the receipt of the return and remittance, if
paid by cash or currency, shall issue a receipt to the taxpayer for the amount of the taxpayer's
remittance. Such receipt is not a receipt in full for the amount of the tax due, but only for the
remittance made by the taxpayer.
### § 57-38-38. Tax commissioner to audit returns and assess tax.

1. Except as otherwise provided in this section, the tax commissioner shall proceed to
audit the returns of taxpayers and, not later than three years after the due date of the
return, or three years after the return was filed, whichever period expires later, assess
the tax and, if any additional tax is found due, shall notify the taxpayer in detail as to
the reason for the increase.
2. For taxable years beginning before January 1, 1991, as to any corporation or other
person whose principal place for managing or directing a business is outside North
Dakota, the tax commissioner has six years after the due date of the return or six
years after the return was filed, whichever period expires later, to audit the return of
the corporation or other person and assess any additional tax found due. Effective for
the taxable years beginning after December 31, 1990, and before January 1, 1993, the
tax commissioner has five years to audit the return of the corporation or other person
and assess any additional tax found due. Effective for taxable years beginning after
December 31, 1992, and before January 1, 1995, the time period for assessment
under this subsection is four years. Effective for taxable years beginning after
December 31, 1994, the time period for assessment under this subsection is three
years.
3. If there is a change in taxable income or income tax liability by an amount which is in
excess of twenty-five percent of the amount of taxable income or income tax liability
stated in the return as filed, any additional tax determined to be due may be assessed
at any time within six years after the due date of the return, or six years after the return
was filed, whichever period expires later.
4. If a person has failed to file a return of income as required by this chapter, the tax may
be assessed under section 57-38-33 or subsection 6 of section 57-38-45, or an action
brought under section 57-38-47, at any time within ten years after the due date of the
return.
5. If false or fraudulent information is given in the return, or if the failure to file a return is
due to the fraudulent intent or the willful attempt of the taxpayer in any manner to
evade the tax, the time limitations in this section do not apply, and the tax may be
assessed at any time.
6. a. If a person files an amended state income tax return, or other information as
required by the tax commissioner, pursuant to section 57-38-34.4, the tax
commissioner has two years after the amended state income tax return, or other

information as required by the tax commissioner, is filed to audit the state income
tax return and assess any additional state income tax attributable to the changes
or corrections made by the United States internal revenue service, or other
competent authority, or that is attributable to the amended federal income tax
return, even though other time periods prescribed in this section for the
assessment of tax may have expired. The provisions of this subsection do not
limit or restrict any other time period prescribed in this section for the assessment
of tax that has not expired as of the end of the two-year period prescribed in this
subsection.
b. For taxable years beginning before January 1, 1991, any person who consents to
an extension of time for the assessment of taxes with the internal revenue service
shall be presumed to have consented to a similar extension of time for the
assessment or refund of state income tax with the state tax commissioner.
Refunds under this subdivision are limited to tax years beginning after July 1,
1983.
c. If a determination is made under subdivision a that additional tax is due and the
tax commissioner has previously refunded income taxes related to the amended
return or claim, subsection 2 of section 57-38-45 does not apply to the refunded
amount.
7. If a person fails to file an amended state income tax return, or other information as
required by the tax commissioner, under section 57-38-34.4, the tax commissioner
may assess any additional tax found due which is attributable to the changes or
corrections made by the United States internal revenue service, or other competent
authority, or which is attributable to the amended federal income tax return, at any
time, even though other time periods prescribed in this section may have expired.
8. If before the expiration of the time periods prescribed in subsections 1, 2, and 3 the tax
commissioner and a person consent in writing to an extension of time for the
assessment of the tax, an assessment of additional state income tax may be made at
any time prior to the expiration of the period agreed upon. The period so agreed upon
may be extended by subsequent agreements in writing made before the expiration of
the period previously agreed upon. If a person refuses to consent to an extension of
time or a renewal thereof, the tax commissioner may make an assessment based on
the best information available. The period agreed upon in this subsection, including
extensions, expires upon issuance of an assessment by the tax commissioner.
9. Except for an amended return required to be filed under section 57-38-34.4, if a
person files an amended state income tax return within the time periods prescribed in
subsections 1, 2, and 3 of this section or subsections 1 and 2 of section 57-38-40, the
tax commissioner has two years after the amended state income tax return is filed to
audit the state income tax return and assess any additional state income tax
attributable to the changes or corrections on the amended return, even though other
time periods prescribed in this section for the assessment of tax may have expired.
The provisions of this subsection do not limit or restrict any other time period
prescribed in this section for the assessment of tax that has not expired at the end of
the two-year period prescribed in this subsection.
10. For investments made under chapters 57-38.5 and 57-38.6 after December 31, 2002,
the tax commissioner has four years after the due date of the return, or four years after
the return was filed, whichever period expires later, to audit any seed capital
investment tax credit or agricultural business investment tax credit claimed by a
taxpayer and assess the tax if additional tax is found due. The provisions of this
subsection do not limit or restrict any other time period prescribed in this section for
the assessment of tax.
11. This section applies if additional tax would be due under the provisions of chapter
57-35.3 in effect for taxable years beginning before January 1, 2013.

### § 57-38-39. Deficiency, protest, and appeal.

1. When tax is understated on a return because of a mathematical or clerical error, the
tax commissioner shall notify the person of the nature of the error and the amount of
additional tax due. This notice is not a notice of deficiency and the person has no right
to protest.
2. If upon audit the tax commissioner finds additional tax due, the tax commissioner shall
notify the person of the deficiency in the tax payment. Such notice of deficiency must
be sent first-class mail and must assess the amount of additional tax due and set forth
the reasons for the increase.
3. A person has thirty days, ninety days if the person is outside the United States, to file a
written protest objecting to the tax commissioner's assessment of additional tax due.
The protest must set forth the basis for the protest and any other information which
may be required by the tax commissioner. If a person fails to file a written protest
within the time provided, the amount of additional tax assessed in the notice of
deficiency becomes finally and irrevocably fixed. If a person protests only a portion of
the tax commissioner's finding, the portion which is not protested becomes finally and
irrevocably fixed.
4. If a protest is filed, the tax commissioner shall reconsider the assessment of additional
tax due. The reconsideration may include further examination by the tax commissioner
or the tax commissioner's representative of a person's books, papers, records, or
memoranda. The tax commissioner, upon request, may grant the person an informal
conference.
5. Within a reasonable time after the protest, the tax commissioner shall mail to the
taxpayer a notice of reconsideration and assessment which must respond to the
person's protest and assess the amount of additional tax due. The amount set forth in
that notice becomes finally and irrevocably fixed unless the person within thirty days
commences formal administrative review as provided for in chapter 28-32 by the filing
of a complaint.
6. Upon written request, the tax commissioner may grant an extension of time to file a
protest as provided for in subsection 3 or an extension of time to commence formal
review as provided in subsection 5.
7. In all cases in which the tax commissioner finds that a person has an obligation to file
an income tax return in North Dakota and has failed to do so, the tax commissioner
shall notify the person by first-class mail of the tax commissioner's finding and of the
remedies provided for in sections 57-38-33, 57-38-45, and 57-38-47. The remedies
provided for in the above-listed sections are mutually exclusive and if a person fails to
file an income tax return after being notified, the tax commissioner may elect a remedy
under which to proceed. If the tax commissioner elects to take the action provided for
in section 57-38-33 or subsection 6 of section 57-38-45, the amount so assessed is
not reviewable.
### § 57-38-40. Claim for credit or refund.

1. Except as otherwise provided in this section, a person may file a claim for credit or
refund of an overpayment of any tax imposed by this chapter within three years after
the due date of the return or within three years after the return was filed, whichever
period expires last.
a. As to any corporation or other person whose principal place for managing or
directing a business is outside North Dakota, if the period for assessment
remains open under subsection 2 of section 57-38-38, the period of time for filing
of a claim for credit or refund will remain open for the same period prescribed in
subsection 2 of section 57-38-38.
b. An individual who filed a return of income as a resident of this state and is
assessed tax by another state or territory of the United States or the District of
Columbia on that income after the time for filing a claim has expired under this
section is entitled to a credit or refund for the amount of tax paid to the other
jurisdiction, not including penalty or interest, as provided under subsection 1 or 4

of section 57-38-30.3, notwithstanding the time limitations of this section. The
claim for the credit or refund under this subdivision must be submitted to the
commissioner within one year from the date the taxes were paid to the other
jurisdiction. The taxpayer must submit sufficient proof to show entitlement to a
credit or refund under this subdivision.
2. If there is a change in taxable income or income tax liability by an amount which is in
excess of twenty-five percent of the amount of taxable income or income tax liability
stated in the return as filed, a person may file a claim for credit or refund of any tax
imposed by this chapter within six years after the due date of the return or within six
years after the return was filed, whichever period expires last. The provisions of this
subsection do not create or increase any net operating loss otherwise recognized
under this chapter for purposes of carryover to any subsequent taxable period or
carryback to any prior taxable period.
3. A corporation may file a claim for credit or refund of an overpayment of tax resulting
from the carryback of a net operating loss under subsection 3 of section 57-38-01.3, or
resulting from a federal capital loss carryback, within three years after the prescribed
due date for filing the return, including extensions, for the tax year in which the loss
was incurred. The provisions of this subsection applicable to net operating losses are
ineffective for loss years beginning after December 31, 2002.
4. A person other than a corporation may file a claim for credit or refund of an
overpayment of tax resulting from the carryback of a net operating loss within three
years after the prescribed due date for filing the return, including extensions, for the
tax year in which the loss was incurred. The provisions of this subsection are effective
for loss years beginning after December 31, 1986.
5. Notwithstanding any other provision in this section, if any taxpayer, with or without
intent to evade any tax imposed by this chapter, fails to file a state income tax return
within three years after the due date of the return prescribed in this chapter, no credit
or refund of overwithheld income tax or overpaid estimated income tax may be made.
6. If any person consents to an extension of time for the assessment of state income tax,
under subsection 8 of section 57-38-38, the period of time for filing a claim for credit or
refund will be similarly extended. Provided, however, if an assessment is issued, the
taxpayer has sixty days from the assessment to file a claim for refund. If a claim for
refund is filed in any year extended by an agreement under subsection 8 of section
57-38-38, the tax commissioner may assess additional tax for any year extended by
the same agreement which has otherwise expired. The additional assessment is
limited to issues raised in the claim for refund.
7. a. If a person required to file an amended state income tax return, or other
information as required by the tax commissioner, under section 57-38-34.4, does
so within the ninety-day period prescribed therein, an overpayment of state
income tax attributable to the changes or corrections made by the United States
internal revenue service, or other competent authority, must be credited or
refunded to the person by the tax commissioner, even though other time periods
prescribed in this section may have expired; provided the person submits a notice
or other pertinent documentation as proof of the final determination of the
changes or corrections by the United States internal revenue service, or other
competent authority.
b. If a person required to file an amended state income tax return, or other
information as required by the tax commissioner, under section 57-38-34.4, does
not do so within the ninety-day period prescribed therein, an overpayment of state
income tax attributable to the changes or corrections made by the United States
internal revenue service, or other competent authority, must be credited or
refunded to the person by the tax commissioner if the person files the amended
state income tax return, or other information as required by the tax commissioner,
within two years after the final determination of the changes or corrections made
by the United States internal revenue service, or other competent authority, even
though other time periods prescribed in this section may have expired. This

provision does not limit or restrict any other time period prescribed in this section
that has not expired as of the end of the two-year period prescribed in this
subsection. Any interest otherwise allowed by section 57-38-35.2 does not accrue
after the ninety-day period prescribed in section 57-38-34.4, if this subdivision
applies.
c. This subsection applies to any taxable year of an individual, estate, or trust for
which changes or corrections have been made by the United States internal
revenue service or other competent authority.
8. a. If a return is filed by an individual or an individual and spouse and, after the death
of the individual, a refund claim is filed or becomes payable, the tax
commissioner shall approve the refund for payment to the legal representative of
the decedent upon application and presentation of certified copies of letters
testamentary or letters of administration establishing the fiduciary relationship of
the legal representative.
b. If the legal representative of the taxpayer has not made application for the refund
of the deceased taxpayer within one year from the date of the taxpayer's death,
the tax commissioner may approve the refund to any person within the
classifications set out herein and with the following priority: surviving spouse,
children, grandchildren, parents, grandparents, and other relatives, upon proper
application establishing the relationship of the claimant. Should an application be
received from more than one individual in any of the classifications set out herein,
the tax commissioner shall honor the earliest postmarked application which is
properly filed pursuant to rules adopted by the tax commissioner.
c. When the tax commissioner acting in good faith has approved a refund payment
pursuant to the provisions of this subsection, the tax commissioner shall not be
held responsible to any person or legal representative of the decedent who may
have qualified to make a proper application but has failed to do so within one year
from the date of death of the deceased taxpayer.
9. Every claim for credit or refund shall be made by filing with the tax commissioner an
amended return, or other report as prescribed by the tax commissioner, accompanied
by a statement outlining the specific grounds upon which the claim for credit or refund
is based.
10. If the tax commissioner disallows a claim for credit or refund, in part or in full, the tax
commissioner shall notify the taxpayer accordingly. The decision of the tax
commissioner denying a claim for credit or refund is final and irrevocable thirty days
after the date the notice is mailed to the taxpayer unless, within this thirty-day period,
the taxpayer has filed a protest with the tax commissioner.
11. The protest shall set forth the grounds on which the protest is based, along with any
other information as may be required by the tax commissioner. If the taxpayer has so
requested, the tax commissioner may grant the taxpayer or the authorized
representative of the taxpayer an informal conference.
12. The tax commissioner shall reconsider the denial of the claim for credit or refund after
the filing of a protest. The reconsideration may include the further examination by the
tax commissioner or the authorized representative of the tax commissioner of a
taxpayer's books, papers, records, or memoranda, including corporate minutes and
committee notes.
13. Within a reasonable period of time after protest, the tax commissioner shall notify the
taxpayer of the tax commissioner's reconsideration of claim for credit or refund. If the
decision of the tax commissioner is a denial, the decision is final and irrevocable
unless the taxpayer within thirty days following the date of the tax commissioner's
decision seeks formal administrative review of the tax commissioner's reconsideration
of claim for credit or refund by filing a complaint and requesting an administrative
hearing. The complaint must be personally served on the tax commissioner or sent by
certified mail. The provisions of chapter 28-32 shall apply to and govern the
administrative hearing procedure, including appeals from any decision rendered by the

tax commissioner. Upon written request of a taxpayer, the tax commissioner may grant
a reasonable extension of time for the filing of a complaint.
14. If the tax commissioner determines that an amount in excess of the correct amount of
tax, interest, or penalty due from any person has been paid by or on behalf of that
person because of income tax withheld or estimated tax paid, the tax commissioner
may approve a refund of the excess amount which shall be paid to that person in the
manner provided for payment of other claims against the state, except that it shall not
be necessary to first file a claim for refund if the amount to be refunded was paid with
respect to a return or report filed by that person with the tax commissioner in the form
prescribed therefor.
15. If the tax commissioner determines there has been an overpayment of tax, any
overpaid penalty and interest on that tax must be refunded or credited by the tax
commissioner. If interest is paid under section 57-38-35.2, no interest will be paid
under this subsection.
16. A person that would have been entitled to a credit or refund under chapter 57-35.3 for
a taxable year beginning before January 1, 2013, may file a claim for refund or credit
of an overpayment of tax.
### § 57-38-40.1. Income tax refund reserve.

A reserve for income tax refunds is hereby created as a special fund in the state treasury.
The state tax commissioner shall deposit in such fund such amounts from income tax
collections as the commissioner deems necessary to pay refunds to which taxpayers may be
entitled under the provisions of this chapter and appropriated pursuant to section 12 of article X
of the Constitution of North Dakota.
### § 57-38-41. Appeal.

Repealed by S.L. 1945, ch. 293, § 1.
### § 57-38-42. Information at the source.

(Effective for taxable years beginning before
January 1, 2022)
Information as to income must be furnished at the source in the manner following:
1. Except for employers subject to sections 57-38-59 through 57-38-61, every person, a
resident of, or having ownership of property with a situs in, or carrying on a trade or
business in, this state, including officers and employees of this state or of any political
subdivision within this state, making payment of rents, compensation for personal or
professional services performed in this state, or other fixed or determinable annual or
periodical gains, profits, and income during the calendar year to any taxpayer shall
make a complete return thereof to the tax commissioner, in the form and manner
prescribed by the tax commissioner. This subsection applies only if an information
return for the same item is also required to be filed for federal income tax purposes.
Except for those payments from which state income tax was withheld, interest,
dividend, pension, and annuity payments are excluded from the reporting
requirements of this subsection; provided, if any person has withheld state income tax
from an interest, dividend, pension, or annuity payment, that person must be deemed
to be an employer for purposes of sections 57-38-59 through 57-38-61 and shall
comply with the requirements of those sections. For purposes of this subsection, the
tax commissioner is authorized to prescribe rules to specifically exclude items that are
otherwise required to be reported under this subsection from the reporting
requirements of this subsection if, in the tax commissioner's judgment, the reporting of
the items does not contribute to the effective administration of the state's income tax
laws.
2. Every partnership carrying on a trade or business in this state shall make a return,
stating specifically the items of its gross income and the deductions allowed by this
chapter, and shall include in the return the name, address, social security number or

federal identification number, whichever applies, and the amount of the distributive
share of each partner.
3. All information returns required under subsection 1 must be made on the basis of a
calendar year for payments made during the calendar year and must be filed with the
tax commissioner on or before the due date for filing similar returns with the internal
revenue service. All partnership returns required under subsection 2 must be made on
or before the fifteenth day of the fourth month following the close of the fiscal year of
the partnership required to make the return, or if the return is made on the basis of a
calendar year, then the return must be made on or before the fifteenth day of April in
the year following the calendar year for which such return is made.
4. Each information return required under subsection 1 must be deemed to be filed with
the tax commissioner if the person required to make the return files with the tax
commissioner a copy of the information return along with a copy of the transmittal form
required to be filed with the internal revenue service. Each partnership return required
under subsection 2 must be signed and must contain or be verified by a written
declaration that it is made under the penalties of perjury.
5. Each information return required under subsection 1 must be deemed to be filed with
the tax commissioner if the person required to make the return has filed an information
report on magnetic tape with the United States internal revenue service. All such
persons who have received permission from the United States internal revenue
service to file on magnetic tape must notify the tax commissioner, by letter, within thirty
days of obtaining such permission. This subsection is conditioned on the existence of
an agreement between the state of North Dakota and the United States internal
revenue service to participate in combined federal-state information reporting.
6. In case of failure to file an information at the source return as required by subsection 1
by the date prescribed in subsection 3, and after thirty days' notice to file is given by
the tax commissioner, the tax commissioner may assess a penalty of ten dollars for
each failure to file, not to exceed two thousand dollars. In case of failure to file a
partnership return as required by subsection 2 on the date prescribed in subsection 3,
and after thirty days' notice to file is given by the tax commissioner, the tax
commissioner may assess a penalty of five hundred dollars for each failure to file.
Information at the source. (Effective for taxable years beginning after December 31,
2021) Information as to income must be furnished at the source in the manner following:
1. Except for employers subject to sections 57-38-59 through 57-38-61, every person, a
resident of, or having ownership of property with a situs in, or carrying on a trade or
business in, this state, including officers and employees of this state or of any political
subdivision within this state, making payment of rents, compensation for personal or
professional services performed in this state, or other fixed or determinable annual or
periodical gains, profits, and income during the calendar year to any taxpayer shall
make a complete return thereof to the tax commissioner, in the form and manner
prescribed by the tax commissioner. This subsection applies only if an information
return for the same item is also required to be filed for federal income tax purposes.
Except for those payments from which state income tax was withheld, interest,
dividend, pension, and annuity payments are excluded from the reporting
requirements of this subsection; provided, if any person has withheld state income tax
from an interest, dividend, pension, or annuity payment, that person must be deemed
to be an employer for purposes of sections 57-38-59 through 57-38-61 and shall
comply with the requirements of those sections. For purposes of this subsection, the
tax commissioner is authorized to prescribe rules to specifically exclude items that are
otherwise required to be reported under this subsection from the reporting
requirements of this subsection if, in the tax commissioner's judgment, the reporting of
the items does not contribute to the effective administration of the state's income tax
laws.
2. Every partnership carrying on a trade or business in this state shall make a return,
stating specifically the items of its gross income and the deductions allowed by this
chapter, and shall include in the return the name, address, social security number or

federal identification number, whichever applies, and the amount of the distributive
share of each partner.
3. All information returns required under subsection 1 must be made on the basis of a
calendar year for payments made during the calendar year and must be filed with the
tax commissioner on or before the due date for filing similar returns with the internal
revenue service. All partnership returns required under subsection 2 must be made on
or before the fifteenth day of the fourth month following the close of the fiscal year of
the partnership required to make the return, or if the return is made on the basis of a
calendar year, then the return must be made on or before the fifteenth day of April in
the year following the calendar year for which such return is made.
4. Each information return required under subsection 1 must be deemed to be filed with
the tax commissioner if the person required to make the return files with the tax
commissioner a copy of the information return along with a copy of the transmittal form
required to be filed with the internal revenue service. Each partnership return required
under subsection 2 must be signed and must contain or be verified by a written
declaration that it is made under the penalties of perjury.
5. Each information return required under subsection 1 must be deemed to be filed with
the tax commissioner if the person required to make the return has filed an information
report on magnetic tape with the United States internal revenue service. All such
persons who have received permission from the United States internal revenue
service to file on magnetic tape must notify the tax commissioner, by letter, within thirty
days of obtaining such permission. This subsection is conditioned on the existence of
an agreement between the state of North Dakota and the United States internal
revenue service to participate in combined federal-state information reporting.
6. In case of failure to file an information at the source return as required by subsection 1
by the date prescribed in subsection 3, and after thirty days' notice to file is given by
the tax commissioner, the tax commissioner may assess a penalty of ten dollars for
each failure to file, not to exceed two thousand dollars. In case of failure to file a
partnership return as required by subsection 2 on the date prescribed in subsection 3,
and after thirty days' notice to file is given by the tax commissioner, the tax
commissioner may assess a penalty of five hundred dollars for each failure to file.
7. Any person required to file an information return under subsection 1, and any
passthrough entity with ten or more partners, shareholders, members, or owners shall
file the return by electronic data interchange or other electronic media as determined
by the tax commissioner. The tax commissioner may waive, upon a showing of good
cause, the requirement to file the return or pay the tax due electronically.
### § 57-38-43. Interest on delinquent tax.

Repealed by S.L. 1969, ch. 514, § 4.
### § 57-38-44. Tax a personal debt.

Every tax imposed by this chapter, and all increases, interest, and penalties thereon,
becomes, from the time it is due and payable, a personal debt from the person or corporation
liable to pay the same to this state.
### § 57-38-45. Interest and penalties.

1. In addition to other increases to tax and penalty prescribed in this chapter, a taxpayer
is subject to interest as follows:
a. Any taxpayer who requests and is granted an extension of time for filing a return
shall pay, with the tax, interest on the tax 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.
b. If any amount of tax imposed by this chapter, including tax withheld by an
employer, is not paid on or before the due date or extended due date for the
payment, there must be added to the tax interest at the rate of one percent per

month or fraction of a month during which the tax remains unpaid, computed from
the due date of the return to the date paid excepting the month in which the return
was required to be filed or the tax became due.
c. If upon audit an additional tax is found to be due, there must be added to the
additional tax due interest at the rate of one percent of the additional tax for each
month or fraction of a month during which the tax remains unpaid, computed from
the due date of the return to the date paid, excepting the month in which the
return was required to be filed or the tax became due.
d. If the mathematical verification of a taxpayer's return results in additional tax due,
there must be added to the additional tax interest at the rate of one percent of the
additional tax due for each month or fraction of a month during which the tax
remains unpaid, computed from the due date of the return to the date paid,
excepting the month in which the return was required to be filed or the tax
became due.
e. If a deficiency is determined for a tax period for which there was an overpayment
that was applied to the following tax period's estimated tax under subsection 6 of
section 57-38-62, interest accrues with respect to the amount of the deficiency
that is equal to or less than the amount of the overpayment applied from the
estimated tax payment date to which the overpayment was applied.
f. If a deficiency is determined for a tax period for which there was an overpayment
of estimated tax that was refunded, interest accrues, with respect to the amount
of the deficiency which is equal to or less than the amount of the overpayment of
estimated tax refunded, from the date of payment of the refund.
2. In addition to the tax and interest prescribed in this chapter, a taxpayer is subject to
penalties as follows:
a. If any taxpayer, without intent to evade any tax imposed by this chapter, shall fail
to pay the amount shown as tax due on any return, including tax withheld by an
employer, filed on or before the due date or extended due date prescribed
therefor, there shall be added to the tax a penalty of five percent thereof, or five
dollars, whichever is greater.
b. If any taxpayer, without intent to evade any tax imposed by this chapter, shall fail
to file a return, including the employer's withheld tax return, on or before the due
date or extended due date prescribed therefor, there shall be added a penalty
equal to five percent of the tax required to be reported, or five dollars, whichever
is greater, 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 thereof during which the failure continues, not exceeding
twenty-five percent in the aggregate.
c. If upon audit of a taxpayer's return, including tax withheld by an employer, an
additional tax is found to be due, there shall be added to the tax the penalty as
prescribed in subdivision a or b.
d. If the mathematical verification of a taxpayer's return, including tax withheld by an
employer, results in additional tax due, there shall be added to the tax the penalty
as prescribed in subdivision a or b.
e. The provisions of subdivision a, b, c, or d do not apply to the extent it has been
determined that the taxpayer has offsetting overpayments of income taxes which
have not been refunded.
3. Any person including any officer or employee of any corporation or any member or
employee of any partnership or any member, employee, governor, or manager of a
limited liability company who, with intent to evade any requirement of this chapter,
shall fail to pay any tax, or to make, sign, or verify any return, or to supply any
information required by law, or under the provisions of this chapter, or who with like
intent shall make, render, sign, or verify any false or fraudulent information, shall be
subject to a penalty of not more than one thousand dollars to be recovered by the
attorney general, in the name of the state, by action in any court of competent
jurisdiction. Such person shall also be guilty of a class A misdemeanor.

4. In case any person or any corporation fails to pay any tax, addition to tax, interest, or
penalty imposed by this chapter, the attorney general shall bring action for the
recovery of the amount of the tax, addition to tax, interest, or penalty which may be
due, in the name of the state, in any court of competent jurisdiction.
5. The tax commissioner may for good cause shown waive all or any part of any civil
penalty or interest that attached pursuant to the provisions of this chapter.
6. If any taxpayer who has failed to file a return and has been notified by the tax
commissioner of the delinquency, refuses or neglects within thirty days after such
notice to file a proper return, the tax commissioner shall determine the income of such
taxpayer according to the best information available, and shall assess the tax at not
more than double the amount so determined. The appropriate interest and penalty
prescribed in subsections 1 and 2 shall also be added.
7. If any corporation fails to file an income tax return as required by section 57-38-32 on
the date prescribed in section 57-38-34, and after thirty days' notice to file is given by
the tax commissioner, the tax commissioner may assess a penalty of up to five
hundred dollars for each failure to file.
### § 57-38-46. Certificate of tax commissioner prima facie evidence.

The certificate of the tax commissioner to the effect that a tax has not been paid, or that a
return has not been filed, or that information has not been supplied, as required by or under the
provisions of this chapter, is prima facie evidence that such tax has not been paid, that such
return has not been filed, or that such information has not been supplied.
### § 57-38-47. Mandamus to compel filing return.

If any taxpayer fails to file a return within sixty days after the time prescribed in this chapter
and refuses to file such return within thirty days after having been notified by the tax
commissioner to do so, any judge of the district court, upon petition of the tax commissioner,
shall issue a writ of mandamus requiring such person to file a return. The order or notice upon
the petition shall be returnable not more than ten days after the filing of the petition. The petition
must be heard and determined on the return day, or on such day thereafter as the court shall fix,
having regard to the speediest possible determination of the case consistent with the rights of
the parties. The judgment must include costs in favor of the prevailing party. All writs and
process may be issued from the clerk's office in any county and, except as aforesaid, must be
returnable as the court shall order.
### § 57-38-48. Lien of tax.

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. Such lien
attaches at the time the tax becomes due and payable and continues until the liability for such
amount is satisfied.
### § 57-38-49. Preservation of lien.

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 57-38-48,
takes free of, or has priority over, the lien. The commissioner shall index in the central indexing
system the following data:
1. The name of the taxpayer.
2. The name "State of North Dakota" as claimant.
3. The date and time the notice of lien was indexed.
4. The amount of the lien.
5. 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. The
commissioner shall index any notice of lien with no payment of fees or costs to the secretary of
state.
### § 57-38-50. Satisfaction of lien.

Upon payment of the tax, together with any accrued penalties and interest, as to which the
commissioner has filed a notice of lien, the commissioner shall index a satisfaction of the lien in
the central indexing system without fees or costs.
### § 57-38-51. Enforcement of lien.

The attorney general, upon the request of the tax commissioner, shall bring suit without
bond, to enforce payment of any taxes and penalties, and to foreclose any lien provided for in
this chapter, and, in such action, the attorney general shall have the assistance of the state's
attorney of the county in which the action is brought. The foregoing remedy of the state is
cumulative and no action taken by the tax 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 to the
exclusion of any other remedy provided by law for the enforcement or collection of an income
tax or penalty or interest.
### § 57-38-52. Field auditors.

Repealed by S.L. 1983, ch. 630, § 2.
### § 57-38-53. Oath and acknowledgment.

The tax commissioner, and such other officers as the tax commissioner may designate, has
the power to administer an oath to any person, or to take the acknowledgment of any person, in
respect to any return or report required by this chapter, or by the rules and regulations of the tax
commissioner.
### § 57-38-54. Publication of statistics.

The tax commissioner shall prepare and publish biennially statistics reasonably available
with respect to the operation of this chapter, including amounts collected, classification of
taxpayers, and such other facts as are deemed pertinent and valuable. The commissioner shall
publish the tax rate imposed under section 57-38-30.3 as a percentage of adjusted federal tax
liability and as the corresponding range of marginal tax rates as if the tax were imposed on
taxable income.
### § 57-38-55. Disposition of revenues.

As soon as practicable, after receipt thereof, the tax commissioner shall turn over to the
state treasurer all income taxes collected by the tax commissioner. The state treasurer shall
issue a receipt for such collections, which must be made a permanent record in the office of the
tax commissioner. Such moneys must be deposited by the state treasurer to the credit of the
general fund for the purpose of defraying the general expenses of the state government.
### § 57-38-56. Powers of tax commissioner.

The tax commissioner is charged with the administration of this chapter and shall enforce
the assessment, levy, and collection of taxes imposed under this chapter. The tax commissioner
has power to examine, or cause to be examined by any agent or representative designated by
the tax commissioner for that purpose, any books, papers, records, or memoranda bearing upon
the matters required to be included in any return or report under this chapter, and may require
the attendance of the taxpayer or of any other person having knowledge in the premises, and
may take testimony and require proof material for the tax commissioner's information. The tax
commissioner may prescribe all rules, not inconsistent with the provisions of this chapter,
necessary and advisable for its detailed and efficient administration, and may enter into

reciprocal agreements with the authorized tax officials of other states to assist in the
enforcement of this chapter and to avoid injustice to taxpayers from double taxation.
### § 57-38-57. Secrecy as to returns - Penalty.

The secrecy of returns must be guarded except as follows:
1. a. Except as is otherwise specifically provided by law, the tax commissioner, the tax
commissioner's deputies, agents, clerks, and other officers and employees, may
not divulge nor make known, in any manner, whether or not any report or return
required under this chapter has been filed, the amount of income, or any
particulars set forth or disclosed in any report or return required under this
chapter, including the copy or any portion thereof or information reflected in the
taxpayer's federal income tax return that the tax commissioner may require to be
attached to, furnished with, or included in the taxpayer's state income tax return.
This provision may not be construed to prohibit the publication of statistics, so
classified as to prevent the identification of particular reports or returns, and the
items thereof, or the inspection by the attorney general or other legal
representatives of the state of the report or return of any taxpayer who shall bring
action to set aside or review the tax based thereon, or against whom an action or
proceeding has been instituted to recover any tax or any penalty imposed by this
chapter. This section does not prohibit disclosure of the fact that a report or return
required under this chapter has not been filed if the disclosure is made to further
a tax investigation being conducted by the tax commissioner. Reports and returns
must be preserved for three years and thereafter until the tax commissioner
orders them to be destroyed.
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. Repealed by S.L. 1975, ch. 106, § 673.
3. The tax commissioner, however, may permit the commissioner of internal revenue of
the United States or the proper officer of any state or of the District of Columbia or of
any territory of the United States, imposing an income tax similar to that imposed by
this chapter, or the authorized representative of any such officer or the authorized
agent of the multistate tax commission, to inspect the income tax returns of any
taxpayer, or may furnish to such officer or the officer's authorized representative an
abstract or copy of the return of income of any taxpayer, or supply the officer or
representative with information concerning any item contained in any return, or

disclosed by the report of any investigation of the income, or return of income, of any
taxpayer, but such permission may be granted, or such information furnished, to such
officers or representatives only if the statutes of the United States or of such other
state or of the District of Columbia or of a territory of the United States, as the case
may be, grant substantially similar privileges to the proper officer of this state charged
with the administration of this chapter; provided, that any information furnished or
made available by the tax commissioner to any other person pursuant to this
subsection may be used by such person only for tax administration purposes; and
provided, further, that similar information furnished or made available to the tax
commissioner by a representative or officer of the United States or of any other state
or of the District of Columbia or a territory of the United States may be used by the tax
commissioner only for tax administration purposes.
4. The tax commissioner is hereby authorized to furnish to workforce safety and
insurance, to job service North Dakota, or to the secretary of state, upon their request
a list or lists of employers showing only the names, addresses, and the tax department
file identification numbers of such employers; provided, that any such list may be used
only for the purpose of administering the duties of the requesting governmental unit.
5. Notwithstanding any other provision of law relating to confidentiality of information
contained on returns, the tax commissioner may use information for income and
withholding tax compliance purposes contained on any federal form W-2 or federal
form 1099 filed under subsection 3 or 4 of section 57-38-60, a fiduciary return filed
under section 57-38-07, a return filed by a subchapter S corporation under section
57-38-32, or an information at the source return filed under section 57-38-42.
6. Upon request, the tax 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 taxpayer as the owner of an unclaimed
voucher authorized by the tax commissioner or to locate the apparent owner of
unclaimed property as provided under chapter 47-30.2.
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. The tax commissioner, upon written request from the secretary of commerce of the
United States, may furnish officers and employees of the bureau of census an
individual taxpayer's identification number and county of residence as reported on the
individual's return. However, any information obtained may be used only for the
purpose of establishing migration methodologies in estimating the annual shifts in the
state's population. A person who receives return information under this subsection may
not disclose the return information to any person other than the taxpayer to whom it
relates except in a form that cannot be associated with, or otherwise identify, directly or
indirectly, a particular taxpayer.
9. The tax commissioner may disclose a taxpayer's name, address, and identification
number to the Bank of North Dakota for the sole purpose of administering the tax
deduction for contributions to the North Dakota higher education savings plan.
10. The tax commissioner may disclose confidential tax information to the insurance
commissioner to be used for the sole purpose of suspending, revoking, placing on
probation, refusing to continue or refusing to issue an insurance producer license,
assessing a civil penalty, or investigating fraudulent insurance acts under the
insurance laws of this state. The tax information may be disclosed only upon written
request that provides the taxpayer's name, federal identification number, and address.
The insurance commissioner may make a written request only if the insurance
commissioner has started an investigation of an applicant or licensee on grounds other
than failure to comply with chapter 57-38 or has started an investigation of a

suspected or actual fraudulent insurance act. Upon receipt of the request, the tax
commissioner may disclose whether the taxpayer has complied with the requirements
of this chapter. If the taxpayer has not complied with these requirements, the tax
commissioner may provide the tax type, the tax period for which a return has not been
filed, and if the taxpayer has failed to pay any tax, the amount of tax, penalty, and
interest owed. The information obtained under this subsection is confidential and may
be used only for the purposes identified in this subsection. For the purposes of this
subsection, a taxpayer is deemed in compliance with this chapter if the taxpayer has
entered an agreement with the tax commissioner to cure the taxpayer's
noncompliance and the taxpayer is current with those obligations under the
agreement.
11. The tax commissioner may provide the department of commerce information obtained
in the administration of the income tax under this chapter. 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 North
Dakota state economic development assistance. A request under this subsection does
not require the tax commissioner to compile or create a record, including compiling or
creating a record from electronically stored information, which does not exist.
Information received by the department of commerce under this subsection may not
be divulged by the department of commerce except in an aggregate format that does
not permit taxpayer identification and any information contained in the returns or
reports filed by a taxpayer.
### § 57-38-58. Definitions.

Repealed by S.L. 1987, ch. 695, § 8.
### § 57-38-59. Withholding from wages of employees - Penalty.

1. Except as provided in section 57-38-59.3, every employer making payment of wages
to employees shall deduct and withhold from their wages such percentage or
percentages, as determined by the tax commissioner, multiplied times the total amount
required to be deducted by an employer from wages of an employee under the
provisions of the Internal Revenue Code of 1986, as amended, as will approximate the
income taxes due the state. The amount of tax withheld must be computed without
regard to any other amount required to be withheld, but the tax withheld must as
closely as possible pay any tax liability imposed by this chapter.
2. In the event that the tax deducted and withheld under subsection 1 should prove to be
disproportionate to the tax liability, the tax commissioner may adjust the percentage
that, when withheld, will, as closely as may be possible, pay the income tax liability
imposed by this chapter.
3. The tax commissioner may, in lieu of the requirement above for deducting and
withholding tax based upon a percentage of federal income tax withheld, adopt by rule
tax tables that, when the tax provided for in the tables is withheld, will, as closely as
possible, pay the income tax liability imposed by this chapter. When adopted by the tax
commissioner, said tables must be followed by every employer required to deduct and
withhold any tax imposed by this chapter.
4. Notwithstanding other provisions in this section, unless otherwise instructed by a
taxpayer, an employer may not, for income tax purposes, withhold or deduct tax from
wages described under subdivision g of subsection 2 of section 57-38-30.3.
### § 57-38-59.1. Reciprocal arrangement with other states for withholding income taxes.

The tax commissioner may enter into an agreement with the tax commissioner or other
taxing officials of another state for the interpretation and administration of the acts of their
several states providing for the collection of income tax at source on wages for the purpose of
promoting fair and equitable administration of such acts and to eliminate duplicate withholding.

The tax commissioner may furnish information on a reciprocal basis to the taxing officials of
another state in order to implement the purposes set forth above.
### § 57-38-59.2. Withholding of lottery winnings.

The North Dakota lottery shall deduct and withhold at the highest marginal rate provided in
section 57-38-30.3 of the total proceeds of state lottery winnings as North Dakota withholding
tax if the winnings are subject to withholding. For purposes of this section, "winnings subject to
withholding" means the proceeds in excess of five thousand dollars won from a lottery game
operated pursuant to chapter 53-12. Every person who receives a payment from the winnings
that are subject to withholding shall furnish the lottery director with a statement, made under the
penalties of perjury, containing the name, address, and taxpayer identification number of the
recipient. The North Dakota lottery shall file returns as provided in section 57-38-60 and is liable
for the payment of the tax required to be withheld but is not liable to any person for the amount
of the payment.
### § 57-38-59.3. Nonresident mobile workforce - Computation of taxable income -

Exclusion - Exception for employer withholding - Returns required.
1. a. Compensation subject to withholding under section 57-38-59, without regard to
subsection 3, that is received by a nonresident for employment duties performed
in this state, shall be excluded from state source income if:
(1) The nonresident has no other income from sources in this state for the tax
year in which the compensation was received;
(2) The nonresident is present in this state to perform employment duties for not
more than twenty days during the tax year in which the compensation is
received. Presence in this state by the nonresident for any part of a day
constitutes presence for that day unless the presence is purely for purposes
of transit through the state; and
(3) The nonresident's state of residence provides a substantially similar
exclusion or does not impose an individual income tax or the nonresident's
income is exempt from taxation by this state under the United States
Constitution or federal statute.
b. This subsection does not apply to compensation received in this state by:
(1) A professional athlete or member of a professional athletic team;
(2) A professional entertainer performing services in the professional performing
arts;
(3) A person of prominence performing services for compensation on a per
event basis;
(4) A person performing construction services to improve real property;
(5) A key employee under section 416(i) of the Internal Revenue Code, as
amended [26 U.S.C. 416(i)], for the year immediately preceding the current
tax year. A determination under this paragraph must be made without regard
to ownership or the existence of a benefit plan; or
(6) An employee of a noncorporate employer, who would be a key employee
without regard to ownership or the existence of a benefit plan, for the year
immediately preceding the current tax year under section 416(i) of the
Internal Revenue Code [26 U.S.C. 416(i)], if the term "employee" were
substituted for the term "officer" in section 416(i)(1)(A)(i) of the Internal
Revenue Code and if such person is one of the noncorporate employer's
fifty highest paid employees without regard to whether such person is an
officer.
c. This subsection shall not prevent the operation, renewal, or initiation of any
agreement with another state authorized under section 57-38-59.1.
d. This subsection creates an exclusion from nonresident compensation under
certain de minimus circumstances and has no application to this state's
jurisdiction to impose this or any other tax on any taxpayer.

2. a. A nonresident whose only state source income is compensation excluded under
subsection 1 does not have an income tax liability and is not required to file a
return as prescribed in section 57-38-31, except nothing in this subsection
prohibits the tax commissioner from exercising the commissioner's discretion to
require the filing of an informational return by a nonresident employee described
in subdivision a of subsection 1.
b. This subsection is applicable to the determination of an individual income
taxpayer's filing requirement and has no application to the imposition of, or this
state's jurisdiction to impose, this or any other tax on any taxpayer.
3. a. No amount is required to be deducted or retained from compensation paid to a
nonresident for employment duties performed in this state if the compensation is
excluded from state source income under subsection 1, without regard to
paragraph 1 of subdivision a of subsection 1. The number of days a nonresident
employee is present in this state for purposes of paragraph 2 of subdivision a of
subsection 1 must include all days the nonresident employee is present and
performing employment duties on behalf of the employer and any other related
person.
(1) For purposes of this subsection, "related person" means a person that, with
respect to the employer during all or any portion of the taxable year, is:
(a) A related entity;
(b) A component member as defined in section 1563(b) of the Internal
Revenue Code [26 U.S.C. 1563(b)];
(c) A person to or from whom there is attribution to stock ownership as
provided in section 1563(e) of the Internal Revenue Code; or
(d) A person that, notwithstanding its form of organization, bears the
same relationship to the employer as a person described in
subparagraphs a through c.
(2) For purposes of this subsection, "related entity" means:
(a) A stockholder who is an individual, or a member of the stockholder's
family as provided in section 318 of the Internal Revenue Code
[26 U.S.C. 318] if the stockholder and the members of the
stockholder's family own, directly, indirectly, beneficially, or
constructively, in the aggregate, at least fifty percent of the value of
the employer's outstanding stock;
(b) A stockholder, or a stockholder's partnership, limited liability company,
estate, trust, or corporation, if the stockholder and the stockholder's
partnerships, limited liability companies, estates, trusts, and
corporations own, directly, indirectly, beneficially, or constructively, in
the aggregate, at least fifty percent of the value of the employer's
outstanding stock; or
(c) A corporation, or a party related to the corporation in a manner that
would require an attribution of stock from the corporation to the party
or from the party to the corporation under the attribution rules of the
federal Internal Revenue Code if the employer owns, directly,
indirectly, beneficially, or constructively, at least fifty percent of the
value of the corporation's outstanding stock. The attribution rules of
the federal Internal Revenue Code shall apply for purposes of
determining whether the ownership requirements of this definition
have been met.
b. An employer that erroneously applies the income tax withholding exception solely
as a result of miscalculating the number of days a nonresident employee is
present in this state to perform employment duties shall not be subject to the
penalty imposed in section 57-38-45 if:
(1) The employer relied on the employer's regularly maintained time and
attendance system that:

(a) Requires the employee to contemporaneously record the employee's
daily work location each day the employee is present in a state other
than the employee's state of residence; and
(b) Is used by the employer to allocate the employee's wages between all
taxing jurisdictions in which the employee performs duties;
(2) The employer relied on the employee's travel records that the employer
requires the employee to regularly maintain and contemporaneously record
the employee's travel and daily work location; or
(3) The employer does not require the records described in paragraph 1 or 2,
and relied on travel expense reimbursement records that the employer
requires the employee to submit on a regular and contemporaneous basis.
c. This subsection establishes an exception to income tax withholding and
deduction requirements and does not apply to the imposition of, or the state's
jurisdiction to impose this, or any other tax on the employer.
### § 57-38-59.4. Withholding requirement for oil and gas royalty payments to

nonresidents.
1. For purposes of this section:
a. "Publicly traded partnership" means a publicly traded partnership as defined in
section 7704 of the Internal Revenue Code [26 U.S.C. 7704] which is not treated
as a corporation.
b. "Remitter" means any person who distributes royalty payments to royalty owners.
c. "Royalty owner" means a person or entity entitled to receive periodic royalty
payments for a nonworking interest in the production of oil or gas.
2. Except as provided in subsection 3, each remitter shall deduct and withhold from the
gross amount of the royalty payment made to each nonresident individual or business
entity that does not have its commercial domicile in this state at the highest marginal
rate in section 57-38-30.3 minus three-fourths of one percent. Sections 57-38-59 and
subsection.
3. This section does not apply to royalty payments made to a royalty owner if the royalty
owner is:
a. The United States or an agency of the federal government, this state or a political
subdivision of this state, or another state or a political subdivision of another
state;
b. A federally recognized Indian tribe with respect to on-reservation oil and gas
production pursuant to a lease entered under the Indian Mineral Leasing Act of
1938 [25 U.S.C. 396a through 396g];
c. The United States as trustee for individual Indians;
d. A publicly traded partnership;
e. An organization that is exempt from the tax under this chapter; or
f. The same person or entity as the remitter.
4. a. This section does not apply to a remitter that produced less than three hundred
fifty thousand barrels of oil or less than five hundred million cubic feet of gas in
the preceding calendar year as certified to the tax commissioner in the manner
and on forms prescribed by the tax commissioner.
b. Each remitter that is exempt from withholding under this subsection shall make
an annual return to report royalty payments that exceed the dollar amounts in
subsection 6 and must be reported in the same manner as provided in section
57-38-60.
5. a. Each year, a publicly traded partnership that is exempt from withholding under
subsection 3 shall transmit to the tax commissioner, in an electronic format
approved by the tax commissioner, each partner's United States department of
the treasury schedule K-1, form 1065, or form 1065-B, as applicable, filed
electronically for the year with the United States internal revenue service.

b. A royalty owner that is a publicly traded partnership, or an organization exempt
from taxation under section 57-38-09, shall report to the remitter and tax
commissioner under oath, on a form prescribed by the tax commissioner, all
information necessary to establish that the remitter is not required under
subsection 2 to withhold royalty payments made to the partnership or
organization.
6. If the royalty payment made to a royalty owner under this section is less than six
hundred dollars for the current withholding period, or is less than one thousand dollars
if the payment is annualized, the tax commissioner may grant a remitter's request to
forego withholding the tax from the royalty payment made to that royalty owner for the
current withholding period or, if applicable, the royalty payments for the annual period.
### § 57-38-60. Employer's returns and remittances.

1. Every employer shall, on or before the last day of April, July, October, and January,
pay over to the tax commissioner the amount required to be deducted and withheld
from wages paid to all employees during the preceding calendar quarter under section
### § 57-38-59. If the amount required to be deducted and withheld from wages paid to all of

an employer's employees during the previous calendar year was less than one
thousand dollars, the employer may file an annual return. The tax commissioner may
alter the time or period for making reports and payment when in the tax
commissioner's opinion, the tax is in jeopardy, or may prescribe the use of any other
time or period as will facilitate the collection and payment of the tax by the employer.
2. Every employer shall file a return on forms prescribed by the tax commissioner with
each payment made to the tax commissioner under this section which shows the
amount of tax imposed under this chapter which was deducted and withheld during the
period covered by the return, and such other information as the tax commissioner may
require. If the amount required to be deducted and withheld from wages paid to all an
employer's employees during the previous calendar year is one thousand dollars or
more, the employer shall file the return and pay any tax due by electronic data
interchange or other electronic media as determined by the tax commissioner. The tax
commissioner may waive, upon a showing of good cause, the requirement to pay the
tax due electronically.
3. Every employer required to withhold state income tax shall make an annual return to
the tax commissioner on forms provided and approved by the tax commissioner,
summarizing the total compensation paid, the federal income tax deducted and
withheld, and the state income tax deducted and withheld during the calendar year.
The annual return must be accompanied by a statement of the compensation paid, the
federal income tax deducted and withheld, and the state income tax deducted and
withheld for each employee. The annual return and accompanying statements must be
filed with the tax commissioner on or before the due date for filing similar returns with
the internal revenue service.
4. Every employer not required to withhold state income tax shall provide to the tax
commissioner a statement of the compensation paid and the federal income tax
deducted and withheld for each employee. The statement must be filed on or before
the due date for filing similar returns with the internal revenue service.
5. In case of failure to timely file an information statement as required by subsections 3
and 4, and after thirty days' notice to file is given by the tax commissioner, the tax
commissioner may assess a penalty of fifteen dollars for each failure to file.
6. Every employer shall also, in accordance with rules adopted by the tax commissioner,
provide each employee from whom state income tax has been withheld, with a
statement of the amounts of total compensation paid and the amounts deducted and
withheld for the employee during the preceding calendar year in accordance with
section 57-38-59. The statement must be made available to the employee on or before
January thirty-first of the year following that for which the report is made.
7. The employer shall be liable to the tax commissioner for the payment of the tax
required to be deducted and withheld under section 57-38-59, and the employee shall

not thereafter be liable for the amount of any such payment, nor shall the employer be
liable to any person or to any employee for the amount of any such payment. For the
purpose of making penalty provisions of this chapter applicable, any amount deducted
or required to be deducted and remitted to the tax commissioner under this section
shall be considered to be the tax of the employer and with respect to such amounts
the employer is considered the taxpayer.
8. Every employer who deducts and withholds any amounts under section 57-38-59 shall
hold the same in trust for the state of North Dakota for payment thereof to the tax
commissioner in the manner and at the time provided for in this section, and the state
of North Dakota shall have a lien on the property of the employer to secure the
payment of any amounts withheld and not remitted as provided herein, which lien shall
attach at the time prescribed and to the property described in section 57-38-48 and
shall be subject to the provisions of sections 57-38-49, 57-38-50, and 57-38-51.
9. An employer, at the discretion of the tax commissioner, may be required to either make
a cash deposit or post with the tax commissioner a bond or undertaking executed by a
surety company authorized to do business in this state in an amount reasonably
calculated to ensure the payment to the state of taxes deducted and withheld from
wages.
10. An employer is not subject to this section or section 57-38-59 for wages paid to any
employee solely for agricultural labor, as defined in section 3121(g) of the Internal
Revenue Code [26 U.S.C. 3121(g)].
11. A payroll service provider authorized under the provisions of this chapter to file and
remit withholding taxes on behalf of an employer shall file the return required by
subsection 2 and pay any tax due, by electronic data interchange or other electronic
media as determined by the tax commissioner. As used in this subsection, a "payroll
service provider" means a person that, for federal tax purposes, electronically
processes and transmits an employer's withholding returns and taxes, including wage
information returns. The tax commissioner may waive, upon a showing of good cause,
the requirement to file a return or pay the tax electronically.
12. Any person required to file an information return under subsection 3 or 4 of this section
shall file the return by electronic data interchange or other electronic media as
determined by the tax commissioner. The tax commissioner may waive, upon a
showing of good cause, the requirement to file the return electronically.
### § 57-38-60.1. Corporate officer liability.

1. If a corporation is an employer and fails for any reason to file the required returns or to
pay the tax due, the president, vice president, secretary, or treasurer, jointly or
severally, charged with the responsibility of supervising the preparation of such returns
and payments is personally liable for such failure. The dissolution of a corporation
does not discharge an officer's liability for a prior failure of the corporation 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 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 income tax withholding liability of the corporation.
### § 57-38-60.2. Governor and manager liability.

1. If a limited liability company is an employer and fails for any reason to file the required
returns or to pay the tax due, the governors, managers, or members of a
member-controlled limited liability company, jointly or severally, charged with the
responsibility of the preparation of the returns and payments are personally liable for
such 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 pursuant to 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 income tax withholding liability of the limited
liability company.
### § 57-38-60.3. Liability of a general partner in a limited liability limited partnership.

1. If a limited liability limited partnership is an employer and fails for any reason to file the
required returns or to pay the tax due, the general partners, jointly or severally,
charged with the responsibility for 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 income tax
withholding liability of the limited liability limited partnership.
### § 57-38-61. Provisions of chapter applicable.

The provisions of sections 57-38-33, 57-38-34, 57-38-38, 57-38-39, 57-38-40, 57-38-44,
57-38-45, 57-38-46, 57-38-47, 57-38-53, 57-38-54, 57-38-55, 57-38-56, and 57-38-57 shall,
insofar as consistent therewith, govern the administration of sections 57-38-59, 57-38-60, and
### § 57-38-60.1. The term "employer" as used in sections 57-38-59, 57-38-60, and 57-38-60.

1 also
means "taxpayer" as used in this chapter. In addition, the authority of the tax commissioner to
adopt rules includes the authority to make such agreements with the United States government
or any of its agencies as are necessary to provide for the deducting and withholding of tax from
the wages of federal employees in this state.
### § 57-38-62. Payment of estimated income tax.

1. An individual, estate, or trust that is subject to section 6654 of the Internal Revenue
Code relating to a failure to pay federal estimated income tax shall, at the time
prescribed in this chapter, pay estimated tax for the current taxable year.
Notwithstanding any other provision of this section, an individual, estate, or trust
whose net tax liability for the preceding taxable year was less than one thousand
dollars is not required to pay estimated tax for the current taxable year. Married
individuals who file a joint federal income tax return and are subject to section 6654 of
the Internal Revenue Code must each be deemed to be subject to the federal
provision. If payment of estimated tax is required, the individual, estate, or trust shall,
at the time prescribed in this chapter, pay the lesser of the following:
a. An amount which, when added to the taxpayer's withholding, equals ninety
percent of the taxpayer's current taxable year's net tax liability.
b. An amount which, when added to the taxpayer's withholding, equals one hundred
percent of the taxpayer's net tax liability for the immediately preceding taxable
year.
(1) This subdivision does not apply to any taxpayer who was not required by
this chapter to file a return for the immediately preceding taxable year, to an
individual who moved into this state during the immediately preceding
taxable year, or to an estate or trust that was not in existence for the entire

immediately preceding taxable year. The amount under this subdivision
must be deemed to be equal to the amount in subdivision a if this part
applies.
(2) In order to satisfy the requirements of this subdivision, married individuals
who are required to file separate state returns for the current taxable year
but who were required to file a joint state return for the immediately
preceding taxable year must each be required to pay estimated tax in an
amount which, when added to the individual's withholding, equals the net tax
liability which would have been computed for the immediately preceding
taxable year if separate state returns had been required to be filed.
(3) In order to satisfy the requirements of this subdivision, married individuals
who are required to file a joint state return for the current taxable year but
were required to file separate state returns for the immediately preceding
taxable year must be required to pay estimated tax in an amount which,
when added to their withholding, equals the sum of their separate net tax
liabilities for the immediately preceding taxable year.
2. A corporation shall, at the time prescribed in this chapter, pay estimated tax for the
current taxable year if the corporation's estimated tax can reasonably be expected to
exceed five thousand dollars and if the corporation's net tax liability for the immediately
preceding taxable year exceeded five thousand dollars. If payment of estimated tax is
required, the corporation shall, at the time prescribed in this chapter, pay the lesser of
the following:
a. An amount which, when added to the corporation's withholding, equals ninety
percent of the corporation's current taxable year's net tax liability.
b. An amount which, when added to the corporation's withholding, equals one
hundred percent of the corporation's net tax liability for the immediately preceding
taxable year.
3. The provisions of section 57-38-45, except those provisions relating to the imposition
of a penalty, apply in case of nonpayment, late payment, or underpayment of
estimated tax. For purposes of applying the interest provisions of section 57-38-45,
interest accrues on a per annum basis from the due date of an installment to the
fifteenth day of the fourth month following the end of the current taxable year or, with
respect to any portion of the estimated tax required to be paid, the date on which the
portion thereof is paid, whichever date is earlier. Notwithstanding the other provisions
of this section, no interest is due if the estimated tax paid on or before each due date
under section 57-38-63 by a corporation is based on the annualized or adjusted
seasonal method under section 6655 of the Internal Revenue Code. Notwithstanding
the other provisions of this section, no interest is due if the estimated tax of an
individual, estate, or trust is less than one thousand dollars per income tax return filed.
4. For purposes of this section, "estimated tax" means the amount that a taxpayer
estimates to be income tax under this chapter for the current taxable year less the
amount of any credits allowable, including tax withheld.
5. For purposes of this section, "net tax liability" means the amount of income tax
computed for the taxable year as shown on the return less the amount of any credits
allowable except tax withheld and estimated tax paid.
6. An individual or corporation may apply a tax overpayment from a preceding taxable
year as an estimated tax payment on the individual's or corporation's behalf for the
taxable year succeeding the overpayment. The individual or corporation may elect to
apply the overpayment to specific estimated tax installments. If the individual or
corporation does not specify the installment period toward which the overpayment is to
be applied, the individual or corporation must be considered to have elected to apply
the overpayment toward the first required estimated tax installment for the succeeding
taxable year.

### § 57-38-63. Due date for payment of estimated income tax.

A taxpayer shall pay no less than one-quarter of the estimated tax to the tax commissioner
on April fifteenth, June fifteenth, and September fifteenth of the taxable year, and January
fifteenth of the following taxable year; provided, that a taxpayer having a taxable year other than
a calendar year shall pay the estimated tax on the fifteenth day of the fourth, sixth, and ninth
months of the taxable year, and the fifteenth day of the first month of the following taxable year.
In the case of a tax year that is for a period of less than one year, and the short tax year ends
prior to any remaining due dates under this section, the final estimated tax payment is due on
the fifteenth day of the last month of the short tax year. In the case of a tax year that is for a
period of less than one hundred twenty days, no estimated tax payment is due.
### § 57-38-64. Application for quick refund of overpaid estimated tax by a corporation.

A corporation may, after the close of the taxable year and before the fifteenth day of the
fourth month thereafter, file an application for an adjustment of an overpayment by it of
estimated tax for the taxable year. A claim for credit or refund must be verified and paid as are
other claims against the state. No application under this section may be allowed unless the
amount of the adjustment exceeds five hundred dollars. No interest may accrue or be paid on
any credit or refund allowed under this section as otherwise provided for under section
57-38-35.2.
### § 57-38-65. Exemption.

No transportation company is required to deduct and withhold with respect to wages paid to
nonresident employees for work performed within North Dakota but whose total work during any
one payroll period is performed within more than one state; provided, however, that any such
employee furnish a certificate to the state tax commissioner that the employee will be taxable
with respect to all such wages earned in North Dakota pursuant to this chapter.
### § 57-38-66. Business and corporation privilege tax.

Repealed by S.L. 1979, ch. 612, § 3.
### § 57-38-67. Definitions applicable to sections 57-38-67 through 57-38-70.

Repealed by S.L. 2009, ch. 545, § 32.
### § 57-38-68. Income tax deduction for land sale to beginning farmers.

Repealed by S.L. 2009, ch. 545, § 32.
### § 57-38-69. Rent from beginning farmers exempt from income tax.

Repealed by S.L. 2009, ch. 545, § 32.
### § 57-38-70. Claim for income tax deduction for land sale or rental to a beginning farmer.

Repealed by S.L. 2009, ch. 545, § 32.
### § 57-38-71. Definitions applicable to sections 57-38-71 through 57-38-74.

Repealed by S.L. 2007, ch. 18, § 51.
### § 57-38-72. Income tax deduction for revenue-producing enterprise sale to beginning

entrepreneur.
Repealed by S.L. 2007, ch. 18, § 51.
### § 57-38-73. Rent from beginning entrepreneur exempt from income tax.

Repealed by S.L. 2007, ch. 18, § 51.
### § 57-38-74. Claim for income tax deduction for revenue-producing enterprise sale or

rental to a beginning entrepreneur.
Repealed by S.L. 2007, ch. 18, § 51.

### § 57-38-75. Rounding.

With respect to any amount required to be shown on any return, form, statement, or other
document required to be filed with the tax commissioner and for purposes of amounts in tax
tables prescribed under subsection 12 of section 57-38-30.3 and subsection 3 of section
57-38-59, the amount may be rounded to the nearest dollar. The cents must be disregarded if
the cents amount to less than one-half dollar. If the cents amount to one-half dollar or more, the
amount must be increased to the next whole dollar.
