Key figures
North Dakota payables
2026, with sources
1099s
North Dakota taxes individual income, but at low rates and with no general withholding on payments to contractors; the withholding regimes outside payroll cover passthrough entities’ nonresident owners and oil and gas royalties. 1099s that show North Dakota withholding are filed electronically with the Tax Commissioner by January 31, with Form 307.
Use tax on software and equipment
The Tax Commissioner’s Computers Guideline treats commercial off-the-shelf software as tangible personal property, taxable whether it ships on media, downloads or loads remotely. A North Dakota company buying prewritten software or equipment from a vendor that doesn’t collect owes use tax at 5% plus the local rate. Custom software, web hosting and separately billed computer time are not taxable.
Contractors and WSI
Because WSI is the only workers’ compensation insurer, misclassification shows up as a WSI premium audit rather than a private carrier’s. WSI applies its own test of control and independence; Job Service applies its own for unemployment insurance.
The federal baseline
This page covers what North Dakota adds. The federal rules underneath it apply here too.
Common questions
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.
Who decides contractor status in North Dakota?
WSI makes its own determination of whether a worker is an employee for workers’ compensation, and Job Service does the same for unemployment insurance. A contractor misclassified by either brings back premiums.
Payables next door
- MTMontana payablesMontana wants Forms 1099 on federal due dates, has no sales or use tax on purchases, and expects contractors to hold an Independent Contractor Exemption Certificate.
- SDSouth Dakota payablesNo state 1099s and no contractor withholding. Use tax reaches SaaS and services bought without South Dakota tax, because almost all of them are taxable.
- MNMinnesota payablesMinnesota wants 1099s that show Minnesota withholding filed directly by January 31, and it taxes prewritten software however delivered, so untaxed software purchases carry use tax.
Founder guides on this
- PeopleContractor or employee? Classification for startupsContractor or employee depends on control, not the contract. The IRS test, state rules, 1099s, payroll registration and the cost of getting it wrong.
- Sales taxSales tax nexus for startups: when you owe tax in a stateSince Wayfair, selling into a state can create a sales tax obligation. How economic nexus works, why SaaS is taxable in some states and when to register.
More of the North Dakota guide
- AccountingAccounting and state tax in North DakotaCorporate tax, conformity to federal rules, apportionment and what it does to your books
- ReceivablesReceivables and sales tax in North DakotaSales tax registration, economic nexus, whether SaaS is taxable, and collecting from customers
- PayrollPayroll taxes and employer rules in North DakotaWithholding, unemployment insurance, paid leave, minimum wage and the rules on paydays
- ComplianceCompliance and filings in North DakotaRegistering to do business, annual reports, franchise tax and the filing calendar
- AdvisoryAdvisory: credits and decisions in North DakotaCredits, incentives and the decisions that are cheaper to get right the first time
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
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.