Contractors need to complete several forms and applications to become a licensed contractor in North Dakota. More information about how to become a licensed contractor is available on the North Dakota Secretary of State’s website. A check list of state agencies a contractor may need to contact is also available.
Contractors must not have any outstanding tax due and must be able to show a Contractor’s Clearance letter when bidding on state or local government contracts. Contractor’s Clearance letters automatically renew in November, unless the contractor has tax debt. Contractors receive the renewal letter from the Office of State Tax Commissioner in the mail.
To apply for a Contractor's Clearance letter, submit the Application to Obtain Contractor’s Request for Clearance to the Office of State Tax Commissioner.
Tax responsibilities for contractors can vary depending on who owns the items, where the items were purchased, and other variables.
More information is available in the tax responsibilities for contractors section of our website.
Contractors who purchase and use tangible personal property must pay sales and use tax on the tangible personal property, unless the customer provides an exemption letter issued by the Office of State Tax Commissioner.
More information about sales tax exemptions is available in the tax exemptions and credits section of our website.
Repair service labor is not taxable in North Dakota. However, tangible personal property sold or used for a repair is subject to sales or use tax.
If tangible personal property is purchased to make a repair to real property, the contractor must pay sales or use tax on the tangible personal property.
- For example, if a contractor replaces a motor in a furnace (real property), the contractor’s service labor is not taxable, and the contractor must pay sales or use tax on the motor.
If a part is purchased to repair a tangible item, the contractor should purchase the item for resale and collect tax on the itemized invoice amount.
- For example, if a contractor replaced the motor in your lawn mower, the contractor’s service labor is not taxable, but sales tax is collected on the itemized amount for the motor.
More information about repair services is available in the Guideline - Repair Services.