North Dakota Sales Tax Nexus 2026

There are two main types of nexus in North Dakota.

Physical Nexus

You have physical nexus in North Dakota if your business has:

• An office, warehouse, store, or any other business location in the state
• Employees working in North Dakota
• Inventory stored in the state (including items in Amazon FBA warehouses)
• Sales representatives or contractors working in North Dakota
• A presence at trade shows or conventions in the state

If you have any physical presence in North Dakota, you need to collect sales tax on all taxable sales to North Dakota customers.

Economic Nexus

Even if you have no physical presence in North Dakota, you still need to collect sales tax if you meet the economic nexus threshold.

The threshold is simple: $100,000 in gross sales into North Dakota in the current or previous calendar year.

Important things to know:

• There is no transaction count requirement. North Dakota removed that on January 1, 2019.
• The $100,000 includes all retail sales, not just taxable sales
• Once you hit the threshold, you have 60 days to register or must register by the next calendar year (whichever comes first)

Marketplace Facilitator Rules

If you sell through platforms like Amazon, Etsy, or eBay, the marketplace may collect sales tax for you.

North Dakota requires marketplace facilitators to collect and remit sales tax if they meet the $100,000 threshold. If the marketplace collects tax on your behalf, you should not report those sales on your own return.

However, if you also make sales outside of marketplaces, you still need to track your total sales to see if you meet the threshold for your direct sales.

What Gets Taxed?

North Dakota charges sales tax on most tangible personal property and many services.

Taxable items include:

• Most retail products
• Many services
• Shipping charges (if the item being shipped is taxable)

Tax-exempt items include:

• Most groceries
• Prescription medicines and medical devices
• Machinery and chemicals used in agriculture
• Items purchased for resale (with a valid resale certificate)

Digital products like software as a service (SaaS) are generally not taxable in North Dakota.

How to Calculate Sales Tax

North Dakota uses destination-based sourcing. This means you charge sales tax based on where your customer is located, not where you are.

The state rate is 5%. Local jurisdictions can add between 0% and 3.5% in additional taxes. The total rate can be anywhere from 5% to 8.5% depending on the buyer’s location.

You need to look up the specific rate for each buyer’s address to charge the correct amount.

Registration and Filing

To register:

• Go to the North Dakota Taxpayer Access Point (TAP) website
• Complete the online registration
• You’ll receive your sales tax permit

Filing frequency: The state will assign you a filing schedule based on how much tax you collect:

• High volume businesses: Monthly
• Medium volume businesses: Quarterly
• Low volume businesses: Annually

Even if you have zero sales in a reporting period, you must file a return.

Due dates: Returns are typically due on the last day of the month following the reporting period.

Income Tax Nexus

North Dakota uses a physical presence standard for income tax nexus. You only have income tax nexus if you have a physical presence in the state like an office, warehouse, or employees.

Economic activity alone (like reaching the $100,000 sales threshold) does not create income tax nexus.

Voluntary Disclosure Program

If you haven’t been collecting North Dakota sales tax but should have been, the state offers a Voluntary Disclosure Program. This program can help you come into compliance with reduced penalties.

Contact the North Dakota Office of State Tax Commissioner for more information about this program.

Penalties for Non-Compliance

If you don’t file or pay on time, North Dakota can charge:

• Late filing penalty: 5% of tax due or $5 (whichever is greater)
• Late payment penalty: 5% of unpaid tax or $5 (whichever is greater)
• Interest: 12% annually on unpaid tax

It’s illegal to collect sales tax without a permit, so make sure you register before you start collecting.

Frequently Asked Questions

Do I need to collect sales tax if I only sell occasionally to North Dakota customers?

If your total sales into North Dakota exceed $100,000 in the current or previous calendar year, yes. It doesn’t matter if the sales are frequent or occasional.

What if I sell on Amazon? Do I still need to register?

If Amazon collects and remits sales tax on your behalf (which they do for FBA sellers), you don’t need to report those sales. But if you have other sales channels that bring your total North Dakota sales over $100,000, you need to register for those sales.

Is shipping taxable in North Dakota?

Yes. If the item you’re shipping is taxable, then the shipping charges are also taxable. If you’re shipping both taxable and non-taxable items in the same order, the entire shipping charge is taxable.

How do I know what tax rate to charge?

North Dakota is destination-based, so you charge the tax rate for your customer’s location. You can use online tax rate lookup tools or sales tax software to find the correct rate for each address.

Do I need to charge tax on digital products?

Most digital products and SaaS are not taxable in North Dakota. However, specific services may be taxable, so check with the state if you’re unsure about your product.

What happens if I miss the registration deadline?

You could face penalties and interest on unpaid taxes. It’s best to register as soon as you know you have nexus. If you’re already late, consider using the Voluntary Disclosure Program.

Can I get a resale certificate from North Dakota?

Yes. If you’re buying items to resell, you can use a North Dakota resale certificate to avoid paying sales tax on those purchases. You’ll need a valid sales tax permit first.

How long do I need to keep sales tax records?

North Dakota can audit your records, so keep all sales tax documentation for at least three years. This includes sales records, exemption certificates, and filed returns.

What if I sell at a trade show in North Dakota?

Attending a trade show creates physical nexus. You may need to collect and remit use tax on any orders taken or sales made during the event.

Do I need separate registrations for income tax and sales tax?

These are separate obligations. Economic nexus for sales tax does not automatically create income tax nexus. You only have income tax nexus if you have a physical presence in the state.

Need Help?

Sales tax nexus rules can be complicated. If you’re not sure whether you have nexus in North Dakota or need help with registration and compliance, we can help.

Call us for a free consultation: 720.878.2280