Sales Tax Exemptions

Construction materials used to construct an agricultural commodity processing facility are exempt from sales and use taxes.

Application Process: Include items listed in the Sales Tax Exemption Application & Approval Requirements.

Century Code Reference: N.D.C.C. § 57-39.2-04.4

This is a sales tax exemption for purchasing tangible personal property incorporated into a system to compress, gather, collect, store, transport or inject carbon dioxide for use in enhanced recovery of oil or natural gas or in secure geological storage in North Dakota.

Eligibility: It must be a new project or an expansion of an existing project.

Application Process: Include items listed in the Sales Tax Exemption Application & Approval Requirements, and include the Property Tax Clearance Record form with the application letter.

Century Code Reference: N.D.C.C. § 57-39.2-04.14

This is a sales and use tax exemption for purchasing tangible personal property used to construct or expand a facility in North Dakota to extract or process byproducts associated with coal gasification.

Application Process: Include items listed in the Sales Tax Exemption Application & Approval Requirements.

Century Code Reference: N.D.C.C. § 57-39.2-04.11

This is a sales and use tax exemption and refund for machinery or equipment used to produce coal from a new mine in North Dakota.

Eligibility: The exemption for each new mine is limited to the first $5 million of sales and use tax paid. The exemption extends to replacement machinery or equipment if the capitalized investment in the new mine exceeds $20 million.

Application Process: Include items listed in the Sales Tax Exemption Application & Approval Requirements, and include State and Local Clearance Record Form with the application letter.

Century Code Reference: N.D.C.C. § 57-39.2-04.8

For primary sector businesses other than manufacturers and recyclers, a sales and use tax exemption is allowed for purchases of computer and telecommunications equipment.

Eligibility: Equipment must be an integral part of a new primary sector business or create an economic expansion of an existing business, and the primary sector business must be certified by the North Dakota Department of Commerce Division of Economic Development and Finance. The exemption does not extend to the purchase of replacement equipment.

Application Process: Must receive a Primary Sector Certification and include items listed in the Sales Tax Exemption Application & Approval Requirements.

Century Code Reference: N.D.C.C. § 57-39.2-04.3

This is a sales tax exemption for enterprise information technology equipment and computer software purchased for use in a newly constructed or substantially refurbished qualified data center.

Eligibility: A data center in North Dakota must:

• Be completed or substantially refurbished after December 31, 2020,
• Consist of 15,000 sq. ft. or more with 50% or more, of area being used for data processing,
• Be located on a single or contiguous parcel of land, and
• Have sophisticated fire suppression and prevention systems and enhanced security features.

Application Process: Include items listed in the Sales Tax Exemption Application & Approval Requirements, and must include with the application letter:

• Property Tax Clearance Record Form
• Diagram of building(s) position on the land parcel.
• Detailed diagram of building square footage and use of building space.
• Date of data center completion.

Century Code Reference: N.D.C.C. § 57-39.2-04.17

Coal Powered Electrical Generating

This is a sales and use tax exemption for purchasing building materials, qualified production equipment, environmental upgrade equipment, and other tangible personal property used in the construction or expansion of coal-powered electrical generating facilities.

Eligibility: Facility must convert beneficiated coal or coal from its natural form into electrical power and have at least one single electrical generation unit with a capacity of 50,000 kilowatts or more.

Application Process: Include items listed in the Sales Tax Exemption Application & Approval Requirements.

Other Electrical Generating

This is a sales and use tax exemption for purchasing building materials, qualified production equipment, environmental upgrade 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.

Eligibility: Facility must produce electricity for resale or for consumption in a business activity and have at least one single electrical generation unit with a capacity of 100 kilowatts or more.

Application Process: Include items listed in the Sales Tax Exemption Application & Approval Requirements.

Century Code Reference: N.D.C.C. §§ 57-39.2-04.2 and 57-40.2-04.2

This is a sales tax exemption for purchasing tangible personal property used to construct a chemical or fertilizer processing facility and any integral component located at the facility site and necessary for the plant’s operation.

Eligibility: The plant must produce fertilizer, chemicals, or chemical derivatives from natural gas, natural gas liquids, or crude oil components for wholesale or retail sale. The taxpayer must receive an air quality permit or a notice that the air quality permit application is complete from the North Dakota Department of Environmental Quality by June 30, 2023.

Application Process: Include items listed in the Sales Tax Exemption Application & Approval Requirements, and include the Property Tax Clearance Record form with the application letter.

Century Code Reference: N.D.C.C. § 57-39.2-04.15

A sales and use tax exemption may be available for the following:

• Purchasing building materials, equipment, and other tangible personal property used in the expansion or construction of a gas processing facility.
• Tangible personal property used to construct or expand a system to compress, process, collect, or gather gas recovered from an oil or gas well in North Dakota may qualify for an exemption.
• Purchases of machinery, equipment, and related facilities for environmental upgrades that exceed $100,000 and that reduce emissions, increase efficiency, or enhance reliability of equipment may also qualify for an exemption.

Application Process: Include items listed in the Sales Tax Exemption Application & Approval Requirements.

Century Code Reference: N.D.C.C. §§ 57-39.2-04.2 and 57-39.2-04.5

This is a sales and use tax exemption for purchasing tangible personal property used to construct or expand a processing facility in North Dakota that produces liquefied natural gas.

Application Process: Include items listed in the Sales Tax Exemption Application & Approval Requirements.

Century Code Reference: N.D.C.C. § 57-39.2-04.10

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.

Application Process: Include items listed in the Sales Tax Exemption Application & Approval Requirements, and include the Property Tax Clearance Record form with the application letter.

Century Code Reference: N.D.C.C. § 57-39.2-04.3

This is a sales and use tax exemption for building materials, equipment, and other tangible personal property used to expand or construct an oil refinery in North Dakota.

Eligibility: The facility must have a nameplate capacity of processing at least 5,000 barrels of oil per day. In addition, purchases for environmental upgrades that exceed $100,000 and that reduce emissions, increase efficiency, or enhance reliability of equipment may also qualify for an exemption.

Application Process: Include items listed in the Sales Tax Exemption Application & Approval Requirements.

Century Code Reference: N.D.C.C. §§ 57-39.2-04.2 and 57-39.2-04.6

This is sales and use tax exemption for purchasing building materials, equipment, and other tangible personal property used to construct or expand a qualified straddle plant, a qualified fractionator plant, or qualified associated infrastructure in North Dakota.

Application Process: Include items listed in the Sales Tax Exemption Application & Approval Requirements.

Century Code Reference: N.D.C.C. § 57-39.2-04.16