North Dakota Sales Tax and Invoicing Rules for 2026

TL;DR: North Dakota has a 5% state sales tax with local taxes adding up to 3.5% more, for combined rates up to 8.5%. Remote sellers exceeding $100,000 in sales must collect. Groceries are exempt, and North Dakota is a Streamlined Sales Tax member state.

North Dakota combines a moderate state rate with potentially significant local taxes that can push combined rates above 8% in some jurisdictions. As a Streamlined Sales Tax member, the state provides standardized tools for multi-state sellers. This guide covers North Dakota's rates, nexus rules, invoice requirements, exemptions, filing deadlines, and penalties for 2026.

State sales tax rate

North Dakota levies a 5% state sales and use tax on most tangible personal property and selected services. Cities can impose additional local taxes, typically ranging from 1% to 3.5%, bringing combined rates to between 6% and 8.5% in some jurisdictions. Fargo's combined rate is approximately 7.5%, and Bismarck is around 7.5% as well. Counties and special taxing districts may also levy taxes for specific purposes such as infrastructure and flood control.

The variation in local rates across North Dakota means sellers must verify the correct combined rate for each delivery destination. The Office of State Tax Commissioner provides rate lookup tools for this purpose.

Nexus rules

Physical nexus exists if you maintain a business location, employees, warehouse, inventory, or agents in North Dakota. Regular delivery into the state with your own vehicles can also establish nexus.

Economic nexus applies to remote sellers with $100,000 or more in gross sales into North Dakota during the previous or current calendar year. There is no separate transaction count threshold. North Dakota is a member of the Streamlined Sales and Use Tax Agreement (SSUTA), simplifying multi-state registration and compliance. Marketplace facilitators must collect and remit on behalf of their sellers once the facilitator meets the threshold.

What must appear on invoices

The North Dakota Office of State Tax Commissioner expects invoices to include:

• Seller's name, address, and North Dakota sales tax permit number
• Buyer's name and address
• Date of sale
• Description of goods or services sold
• Quantity and sale price of each item
• Sales tax shown as a separate line item
• State and local tax rates applied for the delivery location
• Total amount due including tax
• Exemption certificate number for exempt sales

Sellers must apply the correct local rate based on the point of delivery for shipped goods. Documentation of the delivery address supports the rate applied during audits.

Exemptions and special cases

North Dakota provides the following exemptions:

• Groceries (unprepared food for home consumption) are exempt
• Prescription drugs and medical devices
• Sales to federal, state, and local government entities
• Agricultural machinery and repair parts used in farming and ranching
• Manufacturing machinery and equipment used in processing
• Sales to qualifying nonprofit organizations with a valid certificate
• Mobile homes used as a primary residence (subject to separate tax provisions)
• New or expanding business equipment may qualify for exemption under economic development programs

Clothing is fully taxable in North Dakota with no exemption or reduced rate. Digital products including downloaded software are generally taxable. SaaS is taxable in North Dakota when the customer receives the benefit in the state. Most services are not taxable unless specifically enumerated, though repair, installation, and telecommunications services are taxable.

Filing frequency and deadlines

North Dakota requires electronic filing through the ND TAP (Taxpayer Access Point) system. There is no vendor discount for timely filing in North Dakota. Returns must be filed for every period even when no tax is collected. If a due date falls on a weekend or holiday, the deadline extends to the next business day. New businesses are typically assigned monthly filing for their first year of operation.

Penalties for non-compliance

A penalty of 5% of unpaid tax applies for the first month, increasing by 5% per month up to a maximum of 25%. A minimum penalty of $5 applies. Interest accrues at the rate of 1% per month on outstanding balances. Failure to register and collect when required can result in assessment of back taxes plus all penalties and interest. The Office of State Tax Commissioner may also revoke sales tax permits for persistent non-compliance.

Frequently asked questions

Are groceries exempt in North Dakota? Yes. Unprepared food for home consumption is exempt from North Dakota sales tax. However, prepared food (restaurant meals, deli items, catering), candy, and soft drinks are taxable at the full combined rate.

Does North Dakota tax SaaS? Yes. North Dakota treats SaaS as taxable when the customer accesses or benefits from the service within the state. Digital products including software downloads, streaming content, and e-books are also taxable.

Is North Dakota a Streamlined Sales Tax state? Yes. North Dakota is a full member of the SSUTA, providing access to centralized registration, standardized definitions, uniform sourcing rules, and simplified compliance tools for multi-state sellers. Registration through the SSUTA system is free and covers all member states simultaneously, simplifying the process for businesses selling into multiple states.

Are shipping charges taxable in North Dakota? Delivery charges in North Dakota are taxable when the goods being delivered are taxable. If you deliver only exempt items, the delivery charges are also exempt.