North Dakota small business taxes

Pay Your North Dakota Small Business Taxes

Most small businesses are required to pay state taxes. Learn about your North Dakota business taxes and how we can help you stay compliant.

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Just about every North Dakota business needs to pay some sort of business taxes to stay legally compliant. If you’re feeling unsure about what your business needs to pay or how to file, we’re here to ease your mind. In this short guide, we’ll cover the types of state-level small business taxes that may apply to your business. We’ll also explain how to file small business taxes in North Dakota, when they are due, and point out some useful tools we have to help you prepare to file. 

With our Worry-Free Compliance Service, we organize and store your business documents on a personalized dashboard and help you keep up with required regular compliance filings like annual reports.

Step 1: Establish your North Dakota business’s corporate income tax obligations

Every corporation that engages in business or generates income in North Dakota must file a North Dakota corporation income tax return and pay the appropriate tax. The return is due on the 15th day of the fourth month following the end of the business’s tax year. For most businesses, this is April 15th. The current North Dakota business tax rate for corporations is 4.31%. 

Some corporations must make estimated corporate income tax payments. If you expect your corporation’s income tax liability to exceed $5,000 in the current year and last year’s state income tax liability did exceed $5,000, then you must file estimated tax payments. 

Pass-through entities like S corporations, partnerships, and limited liability companies (LLCs) are taxed differently than corporations. When these types of entities make income, it passes through to the owners. Therefore, the tax is calculated using the individual income tax rates. Keep in mind that pass-through entities still have their own tax returns to file.  

Step 2: Determine your North Dakota business’s employment taxes

Like many states, North Dakota requires employers to withhold income tax from wages paid to an employee if:

  • The employee works in North Dakota
  • The employee’s wages are already subject to federal withholding tax

Every employer who’s required to withhold North Dakota income tax needs to register with the Office of State Tax Commissioner. 

Employers must use the federal Form W-4 to calculate the amount to withhold. There are two different methods you can use to calculate withholding tax—the percentage method and the wage bracket method. Since this is a detailed process, we suggest looking through the Tax Commissioner’s instructions for income tax withholding, which can be found on the state’s official tax website.

The income tax withholding return is due the month after each calendar quarter: 

  • 1st quarter (January, February, March)—due April 30th
  • 2nd quarter (April, May, June)—due July 31st
  • 3rd quarter (July, August, September)—due October 31st
  • 4th quarter (October, November, December)—due January 31st

You can file either electronically or by mail. For more details and information on North Dakota’s withholding tax, check out North Dakota’s Income Tax Withholding Guide on its website.

Step 3: Establish your North Dakota business’s additional state tax obligations

There are several additional state and local taxes that you may owe depending on your business activities. 

Sales Taxes

North Dakota imposes a sales tax of 5% on a retailer’s income (more specifically gross receipts) from the sale of tangible personal property, among other things. The sales tax rate increases to 7% for the sale of alcoholic beverages and decreases to 3% for sale of farm and irrigation equipment and mobile homes. Cities and counties may also impose additional sales taxes, 

Your sales tax return and payment will be due on either a monthly, quarterly, semi-annual, or annual basis. Check the Tax Commissioner’s Sales & Use Tax Calendar for more information. 

Franchise/Privilege Tax

Some states have a franchise tax, which is a tax companies pay for the privilege of doing business in the state. North Dakota doesn’t have a franchise tax. 

Unemployment Taxes

Most North Dakota employers are liable to pay unemployment insurance taxes. This tax provides temporary income for those who lost their job through no fault of their own. For a detailed list of employer types who must pay the tax, check out the North Dakota state government’s Employer’s Guide. North Dakota employers must register for unemployment insurance within 20 days of employing a worker. 

The unemployment tax rate varies by year, and Job Service North Dakota, which implements the tax, publishes a new rate schedule each year. Employers must electronically file wage reports and pay the unemployment tax on a quarterly basis through the Employer Account System. 

Excise Taxes

An excise tax is a tax imposed on a specific good, service, or activity. For example, North Dakota has excise taxes on motor vehicles, aircrafts, and cigarette and tobacco products. 

Step 4: Prepare to file and pay your North Dakota business taxes

The North Dakota Office of State Tax Commissioner oversees and implements a majority of the North Dakota small business taxes. Taxpayers can electronically file their taxes through the Taxpayer Access Point (TAP), but keep in mind that you need a separate account for income tax withholding from the one you use to apply for a sales tax permit. To register for your TAP account, you need to have handy basic information about your business. 

When preparing to file taxes, you need to have your business documents in order. For example, you may need to gather receipts, accounting records, and some legal documents. We can help keep things organized easily through our ZenBusiness Money App, which manages your invoices, payments, and customers all in our easy to use dashboard. This gives you access to what you need when you need it to make things easier at tax time.

Do I need an accountant?

Most small business owners need professional accounting assistance when it comes to filing their business taxes. Accountants and other tax professionals can help you avoid serious consequences that may happen if you miss a filing deadline or complete your returns incorrectly. Do yourself a favor and hire a professional early on. 

Not sure how to stay compliant? Learn more about legal compliance for small business owners.

How We Can Help

Preparing and filing your own business taxes in North Dakota can be intimidating. Don’t hesitate to call in a professional for help and take advantage of the tools we offer. You can also stay on top of your payments and invoices with the ZenBusiness Money App. If you’re looking for information about federal taxes, head over to our page on federal taxes for small businesses to learn more.

Yes, you need to do your taxes, but they don’t have to be a time-consuming burden. We’re here to make the process as simple as possible, so you can get back to the fun parts of running a business. 

If your business is still in the formation phase, our North Dakota LLC Formation Services or Corporation Formation Services can help you get started.

Disclaimer: The content on this page is for information purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.

FAQs

  • How much can a North Dakota small business make before paying taxes?

    In North Dakota, there’s no minimum amount of income that requires you to pay taxes. Rather, the North Dakota Office of State Tax Commissioner requires business entities that engage in business to file income tax returns, whether that be a corporation or pass-through entity.

  • What percentage does a North Dakota small business pay in taxes?

    The percentage of small business taxes your company may owe depends on a variety of factors, such as the business structure, the type of business activities, and whether you have employees.

  • How does a North Dakota small business pay taxes?

    You can file most of your North Dakota small business taxes online via the Taxpayer Access Point or by mailing in a paper form.

  • Do I have to file taxes for my small business in North Dakota?

    Most small businesses in North Dakota must file taxes. Read through the guide above to learn more about what taxes may apply to your business.

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