North Dakota Sales Tax Exemptions

Manufacturing, Agricultural, or Recycling Equipment
A new or expanding plant may exempt machinery or equipment from sales and use taxes if it is:
• Used primarily for manufacturing or agricultural processing
• Or used solely for recycling
The expansion must increase production volume, employment, or the types of products that can be manufactured or processed.
[Reference: N.D.C.C. § 57-39.2-04.3]


Agricultural Commodity Processing Plant Construction Materials
Construction materials used to construct an agricultural commodity processing facility are exempt from sales and use taxes.
[Reference: N.D.C.C. § 57-39.2-04.4]


Computer and Telecommunications Equipment
For primary sector businesses other than manufacturers and recyclers, a sales and use tax exemption is allowed for purchases of computer and telecommunications equipment.
[Reference: N.D.C.C. § 57-39.2-04.3]


Gas Processing Facilities
A sales and use tax exemption may be granted for purchasing building materials, equipment, and other tangible personal property used in the expansion or construction of a gas processing facility.
[Reference: N.D.C.C. §§ 57-39.2-04.2 and 57-39.2-04.5]


Carbon Dioxide for Enhanced Oil and Gas Recovery
The sale of carbon dioxide to be used for enhanced recovery of oil or natural gas is exempt from sales and use tax.
[Reference: N.D.C.C. §§ 57-39.2-04(49), and 57-40.2-04(24)]


Oil Refineries
A sales and use tax exemption may be granted for building materials, equipment, and other tangible personal property used to expand or construct an oil refinery in North Dakota.
[Reference: N.D.C.C. §§ 57-39.2-04.2 and 57-39.2-04.6]


Biodiesel Equipment
The sale of equipment not installed by the seller to a facility licensed under N.D.C.C. § 57-43.2-05 to enable the facility to sell diesel fuel containing at least 2% biodiesel fuel or green diesel fuel by volume is exempt from sales tax.
[Reference: N.D.C.C. § 57-39.2-04(51)]


Electrical Generating Facilities, Coal-Powered
A sales and use tax exemption may be granted for purchasing building materials, production equipment and other tangible personal property used in the construction or expansion of coal-powered electrical generating facilities.
[Reference: N.D.C.C. §§ 57-39.2-04.2 and 57-40.2-04.2]


Electrical Generating Facilities, Wind-Powered
A sales and use tax exemption is allowed for purchasing building materials, production equipment, and other tangible personal property used in the construction or expansion of wind-powered electrical generating facilities between July 2001 and January 2015.
[Reference: N.D.C.C. §§ 57-39.2-04.2 and 57-40.2-04.2]


Electrical Generating Facilities, Other
A sales and use tax exemption may be granted for purchasing building materials, production equipment and other tangible personal property used in the construction or expansion of an electrical generating facility other than a coal- or wind-powered facility.
[Reference: N.D.C.C. §§ 57-39.2-04.2 and 57-40.2-04.2]


Hydrogen Generation Facility
Sales of hydrogen used to power an internal combustion engine or fuel cell are exempt from sales tax.
[Reference: N.D.C.C. § 57-39.2-04(50)]


Coal Mine Machinery or Equipment
A sales and use tax exemption may be granted for machinery or equipment used to produce coal from a new mine in North Dakota.
[Reference: N.D.C.C. § 57-39.2-04.8]


Sales Tax Exemption Approval Process
For coal mine machinery and equipment, the mine operator is required to apply for a refund of the qualifying tax paid.
[Reference: N.D.C.C. §§ 57-39.2-04.2, 57-39.2-04.3, and 57-40.2-04.2]


Income Tax Exemption New or Expanding Business
A primary sector or tourism business may qualify for an income tax exemption for up to five years. "Primary sector" refers to a business that adds value to a product, process, or service that produces new wealth in North Dakota. "Tourism" refers to a tourism-related business that is a destination attraction.
[Reference: N.D.C.C. ch. 40-57.1]