North Dakota sales tax for online sellers: nexus, permit and filing

What is the North Dakota sales tax rate?

The state rate is 5%. Cities and some counties add their own taxes, so combined rates are commonly between 7% and 8%. Tax is charged at the rate for the delivery address, and the state collects the local taxes. Groceries are exempt, and software accessed online is generally not taxed.

When does an online seller have to collect in North Dakota?

You must collect if you have a physical presence in North Dakota, such as staff, an office or inventory, or if your taxable sales into North Dakota are more than $100,000 in the previous or current calendar year. There is no transaction-count test. Sales made through a marketplace that collects the tax are generally left out of your own figure. A seller who passes the threshold must have a permit and start collecting within 60 days, or from the start of the next calendar year, whichever comes first.

How nexus works in general is covered in physical vs economic nexus and economic nexus explained.

What if you sell on Amazon, eBay or Etsy?

North Dakota requires marketplace facilitators to collect and remit sales tax on the sales they facilitate, so you do not collect on those orders. Your own website and other direct channels remain your responsibility. See marketplace facilitator laws.

How do you register?

Register online through the North Dakota Taxpayer Access Point for a sales and use tax permit. North Dakota is a member of the Streamlined Sales Tax agreement, so you can also register through the Streamlined system. See Streamlined Sales Tax registration.

What are the steps once you have nexus?

1. Confirm nexus

   Check your presence and your sales into North Dakota against its threshold.

2. Register before collecting

   With the North Dakota tax agency, as set out above.

3. Set up your store

   Charge the correct combined rate for each delivery address and product.

4. File and pay

   On the schedule North Dakota assigns, including zero returns where required.

How are returns filed?

Returns are filed through the Taxpayer Access Point, due in the month after the period on the date shown for your account. The Tax Commissioner assigns monthly, quarterly or annual filing based on the tax you collect. One return covers state and local taxes.

See how to file a sales tax return.

When do you start collecting?

A seller that passes $100,000 on September 10 must be collecting by early November, 60 days later. A seller that passes it on December 5 must start on January 1, because the new calendar year comes first. Register as soon as you see the threshold approaching, so the permit is in place.

What does an example look like?

A tools seller has $125,000 of taxable North Dakota sales in a year through its own website. It registers through the Taxpayer Access Point and charges 7.5% on an order delivered to Fargo, where local taxes add 2.5% to the state rate, and the state rate plus any local tax elsewhere. Both are reported on one return.

What else should sellers know?

• Sellers outside the US: the same rules apply wherever the business is based. See selling on Amazon US as a non-resident.
• Late registration: tax you should have collected becomes your own debt. See voluntary disclosure agreements and collected but not remitted.
• Records: keep sales by delivery address, tax collected and any certificates. See exemption certificates and sales tax audits.
• Stopping: returns stay due until the account is closed. See filing frequency and cancelling a sales tax permit.
• Store settings: switch on collection only once you are registered. See Shopify sales tax setup.

This guide is general information. It is not tax or legal advice for your situation.