Registering a business in North Dakota
You may be required to register your business with the North Dakota Secretary of State. Businesses may also be required to register with the North Dakota Office of State Tax Commissioner. North Dakota offers a business portal with more information regarding registration requirements found here.
S-Corporation Income Tax
North Dakota recognizes the federal S-election, and North Dakota S corporations are not required to pay corporate income tax to the state; however, an individual S corporation shareholder will owe tax on his or her share of the company’s income.
S corporations are required to file Form 60 - S corporation Income Tax.
LLC/Partnership Income Tax
Not required to pay income tax or corporation occupation tax to North Dakota. Business income is passed to partners who pay North Dakota income tax on their personal return.
Partnerships are required to file Form 58 - Partnership Income Tax.
Composite Filing is available to s corporations and partnerships with one or more eligible nonresident member. The tax is calculated on either Form 60 or Form 58 and is calculated at a rate of 5.54%.
Individual Income Tax
North Dakota generally conforms to the Internal Revenue Code on a rolling basis, and therefore adopts most federal provisions, unless otherwise modified.
The starting point for computing North Dakota's personal income tax liability is the federal taxable income.
Since North Dakota's computation starts with the federal taxable income, they do not offer a standard or itemized deduction.
North Dakota does conform to the Internal Revenue Code (IRC) section 199A, also known as the QBI deduction.
Shareholders and partners who have income assignable to North Dakota may need to file an individual income tax return. Tax rates vary by filing status and income and can be found in tax booklet at the link below.
CARES Act Guidance
Rolling conformity states generally automatically adopt changes to the IRC as they are enacted at the federal level, unless otherwise modified.
S corporation partnership and individual income tax returns are due on the 15th day of the fourth month following the end of the tax year. For most taxpayers, returns are due on April 15th. If the due date falls on a weekend or holiday, the return is due the following business day.
S corporations and partnerships are not required to make estimated payments in North Dakota. S corporations use Form 60-ES and partnerships use Form 58-ES.
Individuals who have a net tax liability of $1,000 or more in the previous tax year, or expect to owe more than $1,000 in the current tax year must make estimated tax payments. Additionally, if you are required to make federal estimated payments, you will need to make North Dakota estimated tax payments. Individuals use Form ND-1ES.
Filing an Extension
North Dakota recognizes the federal extension and if one is granted, North Dakota grant the same extension to file. If an extension to file federally is not requested, taxpayers will need to contact the North Dakota Office of State Tax Commissioner and request Form 101.
Returns not filed in a timely manner will be subject to a late filing penalty of 5% per month for each month the return is not filed past the deadline, up to a maximum of 25% or $25.
If your business was formed or is located in another state, but generates income in North Dakota, it may be subject to North Dakota taxes. The rules for taxation of multistate businesses, including what constitutes nexus with a state for the purpose of various taxes, are complicated. If you run such a business, you should consult with a tax professional.
North Dakota Secretary of State:
North Dakota Office of State Tax Commissioner: