North Dakota sits in the northern United States on the Canadian border. Besides Canada to the north, it borders Montana to the west, South Dakota to the south and Minnesota to the east. The Peace Garden State's 750,000 residents live on a little over 180,000 km². The capital is Bismarck.
The state offers real business incentives: generous tax breaks, easy access to government and a productive workforce. That combination, plus North Dakota's standing as one of the states with the lowest operating costs, draws leading companies to the Peace Garden State.
Together with private companies, the state has already invested millions of dollars in cutting-edge research facilities. Life sciences and the biomedical industry in particular have benefited strongly.
Energy, however, remains the state's largest industry and still offers major growth opportunities. North Dakota is also a recognized aviation hub and a leader in unmanned aircraft systems (UAS). The state has the experience, resources and leadership to drive the industry's growth.
The state investment program Invest in North Dakota
The "Invest in North Dakota" program launched on August 1, 2021. It invests part of the earnings of the Legacy Fund in local businesses. At the start, $100 million is available for private equity investments, with another $250 million to be added over the next five years. The total volume of the project, however, is $800 million to be invested in North Dakota businesses, so "Invest in North Dakota" is built for the long term. The goal is for more businesses and people to benefit from the state's oil wealth and for new economic opportunities to open up across the state.
A website will provide information on the North Dakota Growth Fund and let companies submit investment proposals. Guidelines will govern how the money is distributed, including diversification requirements: investments must be spread across several venture capital firms and direct investments based in North Dakota. A firm from outside the Peace Garden State has been chosen to review the proposals.
Once the program is running, the State Investment Board and 50 South Capital will review the fund's performance twice a year and publish annual reports detailing its investment performance and its impact on North Dakota businesses and the state's economy.
International investment
226 international companies have operations in North Dakota and contribute to growth in the Peace Garden State. Companies from Canada, Japan and South Korea are especially active. Their expansions have already created jobs for more than 14,000 people in North Dakota, a good 40 percent of them in manufacturing. Among international employers, Canada, the UK and Japan account for the most jobs. Despite the strong manufacturing share, the investment is not limited to individual industries but spread widely.
Here you can find out which states are most popular with foreign investors, and why.
Income tax in North Dakota
North Dakota levies an income tax of 0 to 2.5%, depending on income (rates of 0%, 1.95% and 2.5%). On top of that, federal income tax applies.
Corporate tax in North Dakota
North Dakota levies a corporate income tax of 1.41 to 4.31%, depending on income. On top of that, federal corporate tax applies.
Sales tax in North Dakota
The US has no European-style VAT. Instead, states, counties and municipalities levy a local sales tax on sales of goods (but not services).
Sales tax rate in North Dakota
North Dakota's state sales tax is 5%. Cities and counties add an average of 1.94%, for a combined average of 6.94%.
North Dakota nexus laws & sales tax
Learn more about economic nexus laws and sales tax.
Effective date
October 01, 2018
Included transactions:
Gross taxable sales of tangible personal property and other items into the state, including taxable services; sales made through a marketplace are not included in the threshold
Treatment of exempt sales:
Exempt sales and exempt services are not included in the threshold
Trigger:
Before January 1, 2019: sales or transactions
As of January 1, 2019: Sales only
Sales/transaction threshold:
Before January 1, 2019: $100,000 or 200 transactions
From January 1, 2019: only $100,000
Evaluation period:
The threshold applies to the previous or current calendar year
Additional information:
- Registration requirements: North Dakota requires remote sellers to register to collect and remit North Dakota sales tax by early the following calendar year or 60 days after crossing the economic nexus threshold.
- Remote seller FAQs
- SB 2191
- SB 2298
North Dakota marketplace sellers & sales tax
Learn more about registration requirements for marketplace sellers
Effective date for marketplace facilitators:
October 1, 2019
Economic nexus threshold:
More than $100,000 in taxable sales in North Dakota in the current or previous calendar year. Remote sellers should exclude sales made through a marketplace when calculating the threshold, unless the marketplace collects on their behalf. Marketplace facilitators include all taxable sales made through the marketplace when calculating the threshold.
Registration requirements:
- Remote multichannel sellers: Once you cross the economic nexus threshold, you must register with the North Dakota Office of State Tax Commissioner and collect North Dakota sales tax on sales not taxed by a marketplace facilitator.
- Remote marketplace sellers: If you sell only through one or more marketplace facilitators, you do not need to register, even if you cross the economic nexus threshold. Contact the North Dakota Office of State Tax Commissioner for more information.
- In-state multichannel sellers: You must register with the Office of State Tax Commissioner and collect tax on sales not taxed by a marketplace facilitator.
- In-state marketplace sellers: You must register. Contact the North Dakota Office of State Tax Commissioner for more information.
- Learn more here.
For an overview of every state, see our directory US states at a glance. Our guide Which US state is best for your company? helps you pick the right state, and the guide to forming a US company walks you through the process. And if you want to run your US LLC tax-free without a US permanent establishment, our sister site zerotax.llc is the place to go.
How we help with North Dakota:
Planning a business with ties to North Dakota? We will work out which entity type and which state suit you in a consultation. For a first overview, see our page on US company formation.