Sales and Use Tax Exemptions

Agricultural Processing Plant Construction Material
A sales and use tax exemption is allowed on the purchases of construction materials used to construct an agricultural processing facility. The processor must apply to the State Tax Commissioner for a refund of the tax paid by the contractor. 

N.D.C.C. § 57-39.2-04.4

Computer and Telecommunications Equipment
A sales and use tax exemption is allowed on the purchases of computer and telecommunications equipment that are an integral part of a qualifying business or a physical or economic expansion of a primary sector business, provided the primary sector business has been certified by the Department of Commerce. The exemption does not extend to the purchase of replacement equipment.

N.D.C.C. § 57-39.2-04.3

Electrical Generating Facilities -- Coal-Powered
A sales and use tax exemption may be granted for purchasing building materials, production equipment and other tangible personal property used in the construction of coal-powered electrical generating facilities. To qualify, the facility must convert 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.

N.D.C.C. §§ 57-39.2-04.2 and 57-40.2-04.2

Electrical Generating Facilities -- Wind-Powered
A sales and use tax exemption is allowed for purchasing building materials, production equipment, and other tangible personal property used in the construction of wind-powered electrical generating facilities between July 2001 and January 2011. To be eligible, a facility must have at least one single electrical energy generation unit with a nameplate capacity of 100 kilowatts or more.

N.D.C.C. §§ 57-39.2-04.2 and 57-40.2-04.2

Electrical Generating Facilities -- Other
A sales and use tax exemption may be granted for purchasing building materials, production equipment and other tangible personal property used in the construction of an electrical generating facility other than a coal- or wind-powered facility. To qualify, the 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.

N.D.C.C. §§ 57-39.2-04.2 and 57-40.2-04.2

Gas Processing Facilities
A sales and use tax exemption may be granted for purchasing building materials, equipment, and other tangible personal property used in the expansion or construction of a gas processing facility. Also, tangible personal property used in compressing, processing, or gathering of gas recovered from a gas well may qualify for an exemption. In addition, 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.

N.D.C.C. §§ 57-39.2-04.2 and 57-39.2-04.5

Manufacturing Equipment
A sales and use tax exemption is allowed on the purchases of machinery or equipment that 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.

N.D.C.C. § 57-39.2-04.3

Hydrogen Generation Facility
Sales of hydrogen used to power an internal combustion engine or fuel cell are exempt from sales tax. Equipment used directly and exclusively in the production and storage of this hydrogen by a hydrogen generation facility is also exempt from sales tax.

N.D.C.C. § 57-39.2-04(50)

Application for any of the above exemptions requires direct contact be made with North Dakota Tax Department staff to coordinate the exemption process.

Phone. 701-328-2770
Toll Free. 800-638-2901
Email. taxinfo@state.nd.us