North Dakota Income Tax Incentives

Agricultural Commodity Processing Facility Investment Credit
An individual, estate, trust, partnership, corporation, or limited liability company is allowed an income tax credit for investing in an agricultural commodity processing facility in North Dakota certified by the Department of Commerce Division of Economic Development and Finance.
[Reference: N.D.C.C. ch. 57-38.6]


Tax Credits for Producing or Blending
Biodiesel or Green Diesel and for Crushing Soybeans or Canola
A corporation is allowed an income tax credit for adapting or adding equipment to retrofit a facility or to construct a new facility in North Dakota that either (1) produces or blends biodiesel fuel or green diesel fuel or (2) crushes soybeans or canola.
[Reference: N.D.C.C. § 57-38-30.6]


For the biodiesel and green diesel supplier and seller credits only: If the supplier or seller is a pass through entity, such as a partnership or S corporation, the credit is passed through to the entity's owners in proportion to their respective interests in the entity.
[Reference: N.D.C.C. §§ 57-38-01.22 and 57-38-01.23]


Biomass, Geothermal, Solar, or Wind Energy Credit
A corporation is allowed an income tax credit for installing a biomass, geothermal, solar, or wind energy device in a building or on property owned or leased in North Dakota.
[Reference: N.D.C.C. § 57-38-01.8]


Automation Credit
Note: This credit is allowed only for the 2013, 2014, and 2015 tax years.
An individual, estate, trust, partnership, corporation, or limited liability company is allowed an income tax credit for purchasing machinery and equipment for the purposes of automating a manufacturing process in North Dakota.
[Reference: N.D.C.C. § 57-38-01.33]


Oil Tax Incentives
North Dakota offers oil tax incentives, many of which are currently unavailable because oil prices exceed the statutory level at which the incentives apply. For details about these, contact the Office of State Tax Commissioner at 701-328-7088.

Research Expense Credit
An individual, estate, trust, partnership, corporation, or limited liability company is allowed an income tax credit for conducting research in North Dakota.
[Reference: N.D.C.C. § 57-38-30.5]


Wage and Salary Credit
A corporation doing business in North Dakota for the first time is allowed an income tax credit equal to:
• 1% of wages and salaries paid during the tax year for each of the first three tax years of operation, and
• 0.5% of wages and salaries paid during the tax year for the fourth and fifth tax years.
A corporation qualifies for the credit if it:
• did not receive a property or income tax exemption under N.D.C.C. ch. 40-57.1,
• was not created from a reorganization or acquisition of an existing North Dakota business, and
• is engaged in assembling, fabricating, manufacturing, mixing or processing of an agricultural, mineral or manufactured product.
[Reference: N.D.C.C. § 57-38-30.1]


Workforce Recruitment Credit
An individual, estate, trust, partnership, corporation, or limited liability company is allowed an income tax credit for employing extraordinary recruitment methods to recruit and hire employees for hard-to-fill positions in North Dakota.
[Reference: N.D.C.C. §§ 57-38-01.25 and 57-38-30.3(2)]


Internship Employment Credit
An individual, estate, trust, partnership, corporation, or limited liability company is allowed an income tax credit for employing an individual under an internship program located in North Dakota.
[Reference: N.D.C.C. § 57-38-01.24]


Angel Fund Investment Credit
An individual, estate, trust, partnership, corporation, or limited liability company is allowed an income tax credit for investing in an angel fund in North Dakota certified by the Department of Commerce Division of Economic Development and Finance.
[Reference: N.D.C.C. § 57-38-01.26]


Certified Nonprofit Development Corporation Investment Credit
A corporation is allowed an income tax credit for buying membership in, paying dues to, or contributing to a certified nonprofit development corporation.
[Reference: N.D.C.C. §§ 10-33-124 and 57-38-01.17]


Seed Capital Investment Credit
An individual, estate, trust, partnership, corporation, or limited liability company is allowed an income tax credit for investing in a business certified by the Department of Commerce Division of Economic
[Reference: N.D.C.C. ch. 57-38.5]


Microbusiness Investment and Employment Credit
An income tax credit is allowed to an individual, estate, trust, partnership, corporation, or limited liability company certified as a microbusiness by the Department of Commerce Division of Economic Development and Finance.
[Reference: N.D.C.C. § 57-38-01.27]


Tax Credit for Charitable Giving
Signed in April of 2011, this law allows for tax credits for individuals and businesses who give to qualified North Dakota charities or 501(c)(3) non-profit organizations . This credit can carry forward for three additional tax years if it is all used in one year.

Qualified Planned or Deferred Gifts
• For individuals the tax credit is 40% of the charitable deduction allowed by the IRS, maximum of $10,000.
• For couples filing jointly the tax credit is 40% of the charitable deduction allowed by the IRS, maximum of $20,000.


Qualified Endowment Fund Gifts
• For businesses the tax credit is 40% of the charitable deduction allowed by the IRS, maximum of $10,000
• For individuals the tax credit is 40% of the charitable deduction allowed by the IRS, maximum of $10,000
• For couples filing jointly the tax credit is 40% of the charitable deduction allowed by the IRS, maximum of $20,000
[Reference: N.D.C.C. § 57-35.3-05.4]