At a glance
- Corporate tax
- 1.41% – 4.31%
- Tax on wages
- 0% – 2.5%
- Sales tax
- 5% + local
- Economic nexus
- $100,000 in taxable sales
- Minimum wage
- $7.25/hr
- UI wage base
- $46,600
- New-employer UI rate
- 1.00% (non-construction)
- Paid leave program
- None
- Annual report
- May 15 (foreign) — $25
2026 figures, each explained with its source on the area’s page. On top of the federal baseline.
Setup, in order
Register the corporation
Before doing business in North Dakota — usually the first hireApply to the Secretary of State for a certificate of authority ($145) and appoint a North Dakota registered agent.
Register for withholding
Before the first North Dakota payrollRegister for income tax withholding with the Office of State Tax Commissioner through ND TAP.
Register for unemployment insurance
When you first pay wages in North DakotaOpen an unemployment insurance account with Job Service North Dakota.
Open a WSI account
Before the first employee startsOpen a policy with Workforce Safety & Insurance; private carriers can’t cover North Dakota employees.
Report new hires
Within 20 days of each hireReport each new or rehired employee to North Dakota New Hire Reporting.
Get a sales tax permit
On physical presence, or at $100,000 of taxable salesApply for a sales and use tax permit with the Tax Commissioner if you sell taxable products.
The six areas
- AccountingAccounting and state tax in North DakotaNorth Dakota taxes corporate income at 1.41% to 4.31% on three brackets, with no minimum tax. The default is worldwide combined reporting; water’s edge costs a 3.5% surtax.First $25,0001.41%
- ReceivablesReceivables and sales tax in North DakotaA 5% state sales tax plus local, with $100,000 of taxable sales as the nexus line. Prewritten software is taxable however delivered; hosted access generally isn’t.State sales tax5%
- PayablesPayables and contractors in North DakotaNo contractor withholding and 1099s only where North Dakota tax was withheld. Use tax applies to prewritten software and equipment bought untaxed.State 1099 filingWith withholding only
- PayrollPayroll taxes and employer rules in North DakotaLow graduated withholding, UI on a $46,600 wage base at 1.00% for most new employers, the federal minimum wage, and workers’ compensation only through the state fund, WSI.State income tax0%, 1.95%, 2.5%
- ComplianceCompliance and filings in North DakotaRegister for $145, file a $25 annual report by May 15 (foreign corporations), and file Form 40 with the federal return. No franchise tax.Foreign registration$145
- AdvisoryAdvisory: credits and decisions in North DakotaNorth Dakota’s research credit is 25% on the first $100,000 of excess expenses and can be sold by certified primary sector startups. WSI is the only workers’ comp carrier.Research credit25%
Who you register with
- North Dakota Office of State Tax CommissionerCorporate income tax, withholding, sales and use tax permits
- Job Service North DakotaUnemployment insurance account and quarterly reports
- North Dakota Secretary of StateCertificate of authority and annual report
- Workforce Safety & Insurance (WSI)The state’s workers’ compensation fund — the only source of coverage
- North Dakota Department of Labor and Human RightsMinimum wage, wage payment and final pay
- Department of Trust Lands — Unclaimed Property DivisionAnnual unclaimed property report
Hiring across the border
An employee who lives in one state and works in another is the most common way a startup ends up registered in two. These are North Dakota’s neighbors.
Common questions
Should we elect water’s edge?
It costs more. North Dakota’s default is a worldwide unitary combined return; a corporation can elect water’s edge to leave out most foreign-source income, but then pays a 3.5% surtax on its North Dakota taxable income, and the election binds for five years. A US-only startup gains nothing from it.
Is SaaS taxable in North Dakota?
Usually not, but read the guideline. The Tax Commissioner taxes off-the-shelf software however it is delivered, and treats web hosting and separately billed computer time as nontaxable services. A subscription where the customer never receives a copy of the program generally falls on the service side; a download or a “load and leave” install falls on the taxable side.
Do we owe use tax on software we buy?
On prewritten software, yes, if the vendor didn’t charge North Dakota tax: the Tax Commissioner treats off-the-shelf software as tangible personal property even when it is delivered electronically. Web hosting and separately billed computer time are not taxable.
Can we cover North Dakota employees on our existing workers’ comp policy?
No. North Dakota is one of a handful of monopolistic states: workers’ compensation is written only by Workforce Safety & Insurance, the state fund. A private policy, or a multistate policy’s coverage, doesn’t satisfy the requirement for North Dakota employees.
When is our North Dakota annual report due?
May 15. North Dakota sets a different deadline for foreign corporations than for its own: domestic corporations file by August 1, foreign corporations by May 15. The fee is $25 either way.
Can a startup get cash for the North Dakota research credit?
Not refundable, but for some startups it is sellable. A primary sector business with annual gross revenue under $750,000, certified by the Department of Commerce as a qualified research and development company, can sell, transfer or assign unused credit — up to $100,000 of credit in total, across all years. The buyer and seller file the purchase agreement with the Tax Commissioner within 30 days, and the sale proceeds are North Dakota income to the seller. For a pre-revenue company it is the only way to turn the credit into cash before it has income.
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
- North Dakota Office of State Tax Commissioner — Corporate Income Tax
- North Dakota Office of State Tax Commissioner — Sales and Use Tax
- North Dakota Office of State Tax Commissioner — Computers Guideline
- North Dakota Office of State Tax Commissioner — 2026 Income Tax Withholding Rates and Instructions
- North Dakota Office of State Tax Commissioner — Income Tax Withholding
- Job Service North Dakota — 2026 Unemployment Insurance Tax Rate Schedules
- North Dakota Century Code § 57-38-30.5 — Research and experimental expenditures credit
- North Dakota Secretary of State — Corporations
- North Dakota Department of Labor and Human Rights — Wage and hour
- North Dakota Workforce Safety & Insurance (WSI)
- North Dakota Health and Human Services — New Hire Reporting
- North Dakota Department of Trust Lands — Unclaimed Property
- North Dakota Century Code ch. 47-30.2 — Revised Uniform Unclaimed Property Act
- North Dakota Century Code ch. 57-38.1 — Uniform Division of Income for Tax Purposes Act
- North Dakota Century Code ch. 57-38.4 — Water’s edge election
- North Dakota Office of State Tax Commissioner — Income tax withholding deadlines
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.